A suburban city in BC’s capital region with 36,000 residents is offering to cover a portion of the 5% downpayment required to buy a condominium unit in their jurisdiction in an effort to encourage more affordable housing ownership.
The City of Langford’s grant, based on gross yearly household income, would cover 75 percent of the downpayment for households earning less than $99,999, 50 percent for those earning $100,000 to $114,999, and 25 percent for those earning $115,000 to $125,000. A household’s total income must be less than $125,000 to be eligible.
However, because of the different criteria, this is not a plan to entice more citizens to the jurisdiction. Prospective participants must have lived in Langford for at least two years, cannot own real estate (first-time homebuyers), cannot have more than $50,000 in total family assets, qualify for a $450,000 pre-mortgage approval, and not receive any down payment aid from family or friends.
A minimum of two persons must live in the household, one of whom may be an eligible dependent such as a kid under the age of eighteen.
The grant can only be used to purchase a two-bedroom condominium in a participating new development with an asking price of $450,000 or less.
The benchmark price for a condominium house in Langford in September 2021, according to the Victoria Real Estate Board, was $481,900, which was equal to the benchmark prices of $576,700 for a townhome and $874,700 for a single-family dwelling.
This is a one-of-a-kind programme designed to help residents who may qualify for a mortgage but are unable to save for the required down payment due to factors such as devoting a significant amount of their income to rent. The grantees are not required to repay the money.
Additional title restrictions, such as prohibiting owners from renting their unit during the first five years of ownership and limiting the sale price of the unit if it is sold within the first five years of ownership, would help ensure that this government-assisted home ownership programme achieves its goals.
This is a prototype project financed by a $3 million fund from Langford’s Affordable Housing Reserve Fund, which is wholly funded by developer contributions as a condition of enhanced density rezoning.
If the pilot programme is deemed a success and city council decides to continue it, the municipality will consider broadening the requirements to include those who work in Langford, as well as three-bedroom units for larger families and one-bedroom flats for singles.
In early 2022, the local administration will launch the application procedure on its website. After city staff determines that prospective recipients are eligible, they will receive a commitment letter outlining the amount of assistance they will receive.
The city will give a list of participating new condominium developments. When a building with eligible units becomes available for pre-sale, the qualifying buyer will be invited to purchase on a first-come, first-served basis from the developer.
This type of programme directly benefits working-class families, which is a growing focus for BC Housing. BC Housing’s HousingHub programme provides low-cost financing to private developers to enable the construction of affordable rental houses or below-market affordable ownership homes for middle-class families.
The provincial government also offers a programme for first-time homebuyers that decreases or eliminates the amount of property transfer tax that must be paid when a home is purchased.