Home ownership creates the kind of financial security that benefits Canadian families and Canada as a whole. It supports the economy of cities; it helps people prepare for their retirement; it frees up affordable rental housing in tight urban markets; and it builds a stable middle class. Canadians value the opportunities and security home ownership creates.
Unfortunately, for many Canadians, home ownership is a dream increasingly out of reach. Home prices are increasing rapidly, yet median incomes are not. The Toronto Real Estate Board reported that home prices are up 23% from just last year. This trend keeps younger Canadians, low income families with children, and key workers further away from home ownership. There are more than 200,000 middle income earners (teachers, social workers, paramedics, nurses, etc.) who want to own a home but are unable to access the private ownership market (Canadian Urban Institute, 2016).
Non-profit ownership housing organizations, like Options for Homes, are working to remedy this issue. While the Options model doesn’t rely on government funding, we can be even more effective with increased support form the federal government. The National Housing Strategy, set for release in early 2017, must include a scaling up of affordable ownership housing - not just affordable rentals - for a comprehensive solution.
RECOMMENDATIONS: ACCESS TO CAPITAL AND ACCESS TO LAND
1. ACCESS TO CAPITAL
A significant barrier to scaling up production of affordable ownership housing involves access to funds for land acquisition, pre-construction costs (including consulting fees), marketing, and municipal permits.
The federal government should provide a $250 million revolving loan fund that would provide both short and long term project equity and be available to qualified non-profit producers.
The loans would be seeded by government, replenished by paybacks and require no ongoing financial commitment from government.
2. ACCESS TO LAND
Provincial and municipal governments should establish and administer an Affordable Housing Land List and identify actionable public lands suitable for sale to registered non-profit housing organizations.
The key benefit of public land being sold to non-profit housing producers is so they can acquire it at an ‘appraised market value’ prior to it being placed on the open market, allowing them to defer payment for the land for a period to be negotiated between the non-profit housing organization and the government. This enables non-profits to access land, while the government also receives full value for the asset.
Scaling up ownership housing initiatives addresses many of the reoccurring themes and issues outlined in the federal What We Heard summary – establishing a broader continuum of affordable housing for a variety of needs and markets, and improving access to housing, especially for first-time home buyers. Our hope at Options for Homes is that the National Housing Strategy does indeed support low and middle-income families ready to achieve the goal of homeownership and the non-profit affordable housing providers that are ready to help.
- Heather Tremain, CEO Options for Homes