Tag Archives: affordable housing

Homebuyers to get new mortgage incentive, Home Buyer’s Plan boost under 2019 budget

Homebuyers to get new mortgage incentive, Home Buyer’s Plan boost under 2019 budget

 

 

 

WATCH: Federal budget 2019: Incentives for first-time home buyers, skills training

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Can’t afford to buy a house? The government may take on part of the cost.

That is the gist of the boldest proposal that Budget 2019 puts forth to help more middle-income Canadians fulfill their homeownership dream.

Under the new CMHC First-Time Home Buyer Incentive, the Canada Mortgage and Housing Corporation would use up to $1.25 billion over three years to help lower mortgage costs for eligible Canadians.

 

The money would go to first-time home buyers applying for insured mortgages. Borrowers would still have to pony up a down payment of at least five per cent of the home purchase price. On top of that, though, they would receive an incentive of up to 10 per cent of the house price, which would lower the amount of their mortgage.

For example, say you’re hoping to buy a $400,000 home with the minimum required five per cent down payment, which works out to $20,000. With the new incentive, you could receive up to $40,000 through the CMHC. Now, instead of taking out a $380,000 mortgage, you’d need to borrow only $340,000. This would lower your monthly mortgage bill from over $1,970 to less than $1,750.

The incentive would be 10 per cent for buyers purchasing a newly built home and 5 per cent for existing homes. Only households with an annual income under $120,000 would be able to participate in the program.

Watch: Finance Minister Bill Morneau presented the 2019 federal budget in the House of Commons Tuesday.


Home owners would eventually have to repay the incentive, possibly at re-sale, though it’s unclear yet how that would work.

Also, mortgage applicants still have to qualify under the federal stress test, which ensures that borrowers will be able to keep up with their debt repayments even at higher interest rates.

However, the incentive would essentially lower the bar for test takers, as applicants would have to qualify for a lower mortgage.

On the other hand, the amount of the insured mortgage plus the CMHC incentive would be capped at four times the home buyers’ annual incomes, or up to $480,000.

This means the most expensive homes Canadians would be able to buy this way would be worth around $500,000 ($480,000 max in insured mortgage and incentive, plus the down payment amount).

The government is hoping to have the program up and running by September.

Home Buyer’s Plan gets a boost

As was widely anticipated, the government would also enhance the Home Buyer’s Plan (HBP), which currently allows first-time buyers to take out up to $25,000 from their registered retirement savings plan (RRSP) to finance the purchase of a home, without having to pay tax on the withdrawal. The budget proposes raising that cap to $35,000.

The new limit would apply to HBP withdrawals made after March 19, 2019.

New measures would encourage more borrowing, possibly drive up home prices

Economists said the new CMHC incentive and the enhanced HBP would encourage Canadians to take on more debt, stimulate housing demand, and possibly push up housing prices.

“It’s a different kind of borrowing,” David Macdonald, senior economist at the Canadian Centre for Policy Alternatives, said of the CMHC incentive.

And with a home-price limit of around $500,000, the program is unlikely to help middle-class millennials buy homes in Vancouver and Toronto, where average property values are far higher, said TD economist Brain De Pratto.

 

Those taking advantage of the higher HBP limit, on the other hand, would have to keep in mind that the government is not extending the program’s repayment timeline, said Doug Carroll, a tax and financial planning expert at Meridian.

Home buyers must put the money back into their RRSP over 15 years to avoid their HBP withdrawal being added to their taxable income. Now Canadians will have to repay a maximum of $35,000 – instead of $25,000 – over the same period, Carroll noted.

In general, the economists and financial experts Global News spoke to saw the budget as being focused on demand-side housing measures, rather than policies that would encourage the construction of new homes.

And while the budget does earmark $10 billion over nine years for new rental homes, it does not propose major tax breaks for homebuilders.

Tax incentives proved to be an effective way to stimulate residential construction in the past, said Don Carson, tax partner at MNP.

“They really drove supply,” he said.

Source: Global News –

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Immigrants prefer single-detached homes less than local buyers

Immigrants prefer single-detached homes less than local buyers 

Immigrants are not as enticed by single-detached residences as their Canadian-born counterparts, fresh numbers from Statistics Canada indicated.

From 2016 to 2017, immigrants accounted for 46% of Toronto’s population total, and 41% that of Vancouver.

The cohort accounted for 43% of residential ownership in Toronto, and 37% in Vancouver. However, the proportion of single-detached homes that immigrants possessed showed a marked difference in the two red-hot markets.

Toronto has approximately half of its immigrant-owned properties as detached properties, while the figure was 60% for owners born in Canada, Yahoo! Finance Canada reported.

Meanwhile, Vancouver’s single-detached homes represented 39% of the city’s immigrant-owned properties, compared with 48% for domestic owners.

“These data show that there is ongoing opportunity to reduce taxes on earnings for typical residents, and especially younger folks and renters who are particularly harmed by the current housing market, by taxing high home values more when owned by foreigners, immigrants and locally-born residents.” UBC professor Paul Kershaw said in an interview.

“Just focusing on wealth brought by immigrants will miss an important, and large, piece of the housing unaffordability puzzle.”

 

An early January analysis by the Altus Group stated that intensified immigration will boost Toronto’s population growth, and in turn feed into greater residential sales activity.

“Markets in the Greater Golden Horseshoe, including the GTA, have the most upside potential for an increase in sales activity in 2019 given the depth of the decline in 2018 and building off of the sales recovery noted in the back half of 2018,” Altus wrote in its market outlook for this year.

Vancouver might not fare as well, however, given that higher borrowing costs and growing construction costs are expected to discourage would-be buyers, Canadian-born or otherwise.

“A key challenge that has become more apparent as of late in Vancouver has been the price sensitivity of consumers, with higher priced projects, or those priced above the competition, experiencing below average sales rates.”

Source: Mortgage Broker News – by Ephraim Vecina 31 Jan 2019

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10 Charts That Show How Out Of Whack Things Are In Canada’s Housing Markets

For sale signs line along a road where houses are for sale in Calgary, Alberta, April 7, 2015.

TODD KOROL / REUTERS
For sale signs line along a road where houses are for sale in Calgary, Alberta, April 7, 2015.

Years of rock-bottom interest rates and rising prices have created some problematic conditions.

After years of boom times, Canada’s housing markets are at a turning point. Rising interest rates and tough new mortgage rules have taken some steam out of the market. But job growth is strong and wages are rising steadily, suggesting there will be homebuyers around to keep the market humming.

So which way are things going? That’s really anyone’s guess. But one thing is clear: After years of — let’s face it — unsustainable growth, things in Canada’s housing markets are looking a little messy when it comes to things like prices and mortgages.

Below are 10 charts illustrating just how out of whack things have become. Vancouver’s housing market is looking especially WTF these days, which is why it gets a bit more attention in these charts than other places.

Canadians have never had to shell out more of their income to own a home

THE ECONOMIST/HUFFPOST CANADA

This chart, which uses data from The Economist magazine, shows the ratio of house prices to incomes in Canada over the past four decades. Never have house prices been so disproportionately high when compared to what people are earning. Only years of rock-bottom interest have made this situation “affordable” for homeowners. Which is why rising interest rates should be — and are — a major concern among Canada’s policymakers.

Condo construction is at an all-time high …

BMO ECONOMICS

Construction of condos in Canada is at record highs, which for some experts is a warning of falling house prices ahead, though others disagree, given Canada’s suddenly accelerating population growth. Meanwhile, single-family home construction is in the dumps, driven in part by a near-total collapse of detached home construction around Toronto. Canadians in the largest cities are moving into condos, whether they like it or not.

… But young families don’t want to live in them

SOTHEBY’S/HUFFPOST CANADA

And apparently they don’t like it. In a survey of “young urban families” last year, Sotheby’s International Realty Canada found that 83 per cent of this group would prefer to live in a detached home, if money were no object. Only five per cent would choose to live in a condo. But with detached homes in Canada the least affordable they’ve ever been, 43 per cent of this group have given up on ever owning a detached home, the survey found.

You need to be a one-percenter to own an “average” Vancouver home

NATIONAL BANK FINANCIAL/HUFFPOST CANADA

There’s nothing “average” about buying an average-priced home in Vancouver these days. According to estimates from National Bank Financial, it now requires an income of $238,000 to qualify for a conventional 20-per-cent down mortgage on average Vancouver home. That’s not much less than the $246,000 you would have to earn to be in the top one per cent of earners in the city.

Despite the slowdown in the market, prices remain very high, and now rising interest rates and the new mortgage “stress test” have further pushed up the amount of income a household needs to qualify for a mortgage.

… Because Vancouver homes are comically overpriced

RBC ECONOMICS

This chart from Royal Bank of Canada shows that the cost of home ownership in Vancouver, as a share of income, is the highest ever. For detached homes (the top line), costs are far beyond any previous historical precedent. But condo costs (bottom line) — while elevated compared to historic norms — are not actually outside their normal historic range.

Vancouver’s new distinction: Worst housing market

KNIGHT FRANK

Vancouver used to dominate the lists of world’s hottest housing markets like few other cities in recent memory, but those days are history. Global real estate agency Knight Frank’s most recent real estate index ranked Vancouver at rock bottom among 43 world cities. How the mighty have fallen.

There aren’t enough new residents to prop up Vancouver’s market

RBC ECONOMICS

Demographic shifts are about to give Vancouver real estate a bit of a kick in the pants. The region’s population of homebuyers — meaning adults — is currently growing at a much slower pace than has been the historic norm. Combine this with the above-mentioned record-setting levels of condo construction and the also above-mentioned unreasonably high prices, and it looks like Vancouver’s housing correction could go on for a while yet.

… But Toronto has as much as it can handle

RBC ECONOMICS

Toronto’s housing market is in an uneven slump, with some parts of the market sliding (detached homes) while others keep performing strongly (condos). But the experts are saying don’t expect a major decrease in house prices, because the city is seeing accelerated growth in its adult population. Growth is now near a 15-year high, which ought to put a floor under any price declines in this era of mortgage stress tests and rising interest rates.

Mortgage growth is at historic lows

BANK OF CANADA

Those mortgage stress tests sure have had an impact. The value of mortgages on Canadian lenders’ books rises year after year no matter what, through recessions and boom times alike. Last year, that growth fell to its lowest level since the 1990s.

Investment condos often lose money

CMHC/CIBC/HUFFPOST CANADA

Buying an investment condo has become the national pastime for Canadians with cash, but with prices at these levels, they’re no guarantee of profit.

A study by CIBC and Urbanation last year found that 44 per cent of the condos taken possession of in 2017 in Toronto would rent out for less than the cost of ownership (assuming a 20-per-cent down mortgage). CMHC looked at the high-rise condo towers in Montreal’s downtown core and concluded the same is true for 75 per cent of them.

We weren’t able to find estimates for Vancouver, but given how realtors there are busy trying convince people negative cash flow can be a good thing, we’re guessing it’s pretty much the same there.

Investors can still turn a profit if the resale value rises. But house prices have stopped rising. Buyer beware.

Watch: The extreme measures Canadians go through to buy a home

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Rent-to-Own Homes: How the Process Works

If you’re like most home buyers, you’ll need a mortgage to finance the purchase of a new house. To qualify, you must have a good credit score and cash for a down payment. Without these, the traditional route to homeownership may not be an option.



There is an alternative, however: a rent-to-own agreement, in which you rent a home for a certain amount of time, with the option to buy it before the lease expires. Rent-to-own agreements consist of two parts: a standard lease agreement and an option to buy. Here’s a rundown of what to watch for and how the rent-to-own process works. It’s more complicated than renting and you’ll need to take extra precautions to protect your interests. Doing so will help you figure out whether the deal is a good choice if you’re looking to buy a home.

You Need to Pay Option Money

In a rent-to-own agreement, you (as the buyer) pay the seller a one-time, usually nonrefundable, upfront fee called the option fee, option money or option consideration. This fee is what gives you the option to buy the house by some date in the future. The option fee is often negotiable, as there’s no standard rate. Still, the fee typically ranges between 2.5% and 7% of the purchase price. In some contracts all or some of the option money can be applied to the eventual purchase price at closing.

Read the Contract Carefully: Lease Option vs. Lease Purchase

It’s important to note that there are different types of rent-to-own contracts, with some being more consumer friendly and flexible than others. Lease-option contracts give you the right – but not the obligation – to buy the home when the lease expires. If you decide not to buy the property at the end of the lease, the option simply expires, and you can walk away without any obligation to continue paying rent or to buy.

Watch out for lease-purchase contracts. With these you could be legally obligated to buy the home at the end of the lease – whether you can afford to or not. To have the option to buy without the obligation, it needs to be a lease-option contract. Because legalese can be challenging to decipher, it’s always a good idea to review the contract with a qualified real estate attorney before signing anything, so you know your rights and exactly what you’re getting into.

Specify the Purchase Price

Rent-to-own agreements should specify when and how the home’s purchase price is determined. In some cases you and the seller will agree on a purchase price when the contract is signed – often at a higher price than the current market value. In other situations the price is determined when the lease expires, based on the property’s then-current market value. Many buyers prefer to “lock in” the purchase price, especially in markets where home prices are trending up.

Know What Your Rent Buys

You’ll pay rent throughout the lease term. The question is whether a portion of each payment is applied to the eventual purchase price. As an example, if you pay $1,200 in rent each month for three years, and 25% of that is credited toward the purchase, you’ll earn a $10,800 rent credit ($1,200 x 0.25 = $300; $300 x 36 months = $10,800). Typically, the rent is slightly higher than the going rate for the area, to make up for the rent credit you receive.But be sure you know what you’re getting for paying that premium.

Maintenance: It May Not Be Like Renting

Depending on the terms of the contract, you may be responsible for maintaining the property and paying for repairs. Usually, this is the landlord’s responsibility so read the fine print of your contract carefully.  Because sellers are ultimately responsible for any homeowner association fees, taxes and insurance (it’s still their house, after all), they typically choose to cover these costs. Either way you’ll need a renter’s insurance policy to cover losses to personal property and provide liability coverage if someone is injured while in the home or if you accidentally injure someone.

Be sure that maintenance and repair requirements are clearly stated in the contract (ask your attorney to explain your responsibilities). Maintaining the property – e.g., mowing the lawn, raking the leaves and cleaning out the gutters – is very different from replacing a damaged roof or bringing the electric up to code. Whether you’ll be responsible for everything or just mowing the lawn, have the home inspected, order an appraisal and make sure the property taxes are up to date before signing anything.

Buying the Property

What happens when the contract ends depends partly on which type of agreement you signed. If you have a lease-option contract and want to buy the property, you’ll probably need to obtain a mortgage (or other financing) in order to pay the seller in full. Conversely, if you decide not to buy the house – or are unable to secure financing by the end of the lease term – the option expires and you move out of the home, just as if you were renting any other property. You’ll likely forfeit any money paid up to that point, including the option money and any rent credit earned, but you won’t be under any obligation to continue renting or to buy the home.

If you have a lease-purchase contract, you may be legally obligated to buy the property when the lease expires. This can be problematic for many reasons, especially if you aren’t able to secure a mortgage. Lease-option contracts are almost always preferable to lease-purchase contracts because they offer more flexibility and you don’t risk getting sued if you are unwilling or unable to buy the home when the lease expires.

Who’s an Ideal Candidate for Rent-to-Own

A rent-to-own agreement can be an excellent option if you’re an aspiring homeowner but aren’t quite ready, financially speaking. These agreements give you the chance to get your finances in order, improve your credit score and save money for a down payment while “locking in” the house you’d like to own. If the option money and/or a percentage of the rent goes toward the purchase price – which they often do – you also get to build some equity.

While rent-to-own agreements have traditionally been geared toward people who can’t qualify for conforming loans, there’s a second group of candidates who have been largely overlooked by the rent-to-own industry: people who can’t get mortgages in pricey, nonconforming loan markets. “In high-cost urban real estate markets, where jumbo [nonconforming] loans are the standard, there is a large demand for a better solution for financially viable, credit-worthy people who can’t get or don’t want a mortgage yet,” says Marjorie Scholtz, founder and CEO of Verbhouse, a San Francisco–based start-up that’s redefining the rent-to-own market.

“As home prices rise and more and more cities are priced out of conforming loan limits and pushed into jumbo loans, the problem shifts from consumers to the home finance industry,” says Scholtz. With strict automatic underwriting guidelines and 20% to 40% down-payment requirements, even financially capable people can have trouble obtaining financing in these markets.

“Anything unusual – in income, for example – tosses good income earners into an ‘outlier’ status because underwriters can’t fit them neatly into a box,” says Scholtz. This includes people who have nontraditional incomes, are self-employed or contract workers, or have unestablished U.S. credit (e.g., foreign nationals) –  and those who simply lack the huge 20% to 40% down payment banks require for nonconforming loans.

High-cost markets are not the obvious place you’ll find rent-to-own properties, which is what makes Verbhouse unusual. But all potential rent-to-own home buyers would benefit from trying to write its consumer-centric features into rent-to-own contracts: The option fee and a portion of each rent payment buy down the purchase price dollar-for-dollar, the rent and purchase price are locked in for up to five years, and participants can build equity and capture market appreciation, even if they decide not to buy. According to Scholtz, participants can “cash out” at the fair market value: Verbhouse sells the home and the participant keeps the market appreciation plus any equity they’ve accumulated through rent “buy-down” payments.

Do Your Homework

Even though you’ll rent before you buy, it’s a good idea to exercise the same due diligence as if you were buying the home outright. If you are considering a rent-to-own property, be sure to:

  • Choose the right terms. Enter a lease-option agreement rather than a lease-purchase agreement.
  • Get help. Hire a qualified real estate attorney to explain the contract and help you understand your rights and obligations. You may want to negotiate some points before signing or avoid the deal if it’s not favorable enough to you.
  • Research the contract. Make sure you understand:
    • the deadlines (what is due when)
    • the option fee and rent payments – and how much of each applies towards the purchase price
    • how the purchase price is determined
    • how to exercise your option to buy (for example, the seller may require you to provide advance notice in writing of your intent to buy)
    • whether pets are allowed
    • who is responsible for maintenance, homeowner association dues, property taxes and the like.
  • Research the home. Order an independent appraisal, obtain a property inspection, make sure the property taxes are up to date and ensure there are no liens on the property.
  • Research the seller. Check the seller’s credit report to look for signs of financial trouble and obtain a title report to see how long the seller has owned it – the longer they’ve owned it and the more equity, the better.
  • Double check. Under which conditions would you lose your option to buy the property? Under some contracts, you lose this right if you are late on just one rent payment or if you fail to notify the seller in writing of your intent to buy.

The Bottom Line

A rent-to-own agreement allows would-be home buyers to move into a house right away, with several years to work on improving their credit scores and/or saving for a down payment before trying to get a mortgage. Of course, certain terms and conditions must be met, in accordance with the rent-to-own agreement. Even if a real estate agent assists with the process, it’s essential to consult a qualified real estate attorney who can clarify the contract and your rights before you sign anything.

Source: Investopedia – Jean Folger Nov. 6, 2018

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Rent control is doing little to curb Toronto’s soaring rents

Haider-Moranis Bulletin: In the long run, rent controls reduce the growth in available rental stock, which further accelerates the increase in rents

In April 2017, Ontario’s then-Liberal government introduced the Rental Fairness Act, which expanded rent control to all private rental units.Cole Burston/Bloomberg

Do stricter rent control laws slow the increase in residential rents? Housing advocates and left-leaning governments believe they do. However, recent data from Ontario appears to offer further proof that this is not the case.

In April 2017, Ontario’s then-Liberal government introduced the Rental Fairness Act, which expanded rent control to all private rental units. The Act restricted rent increases to 1.5 per cent in 2017 and introduced additional provisions to protect tenants from being evicted.

The Act was enacted to protect against “dramatic rent increases.” Chris Ballard, then the Minister of Housing and Poverty Reduction, claimed that the Act would ensure that Ontarians “have an affordable place to call home.”

 

The Toronto Real Estate Board’s (TREB) Rental Market Report for the second quarter of 2018 revealed that the Rental Fairness Act has had no observable impact on market-based rents, which grew at similar rates from 2017 to 2018 as they did from 2016 to 2017. In fact, three-bedroom apartments experienced a significant increase in average rents in 2018.

TREB’s data is based on its rental listing service for the Greater Toronto and surrounding areas. From April to June 2018, almost 12,000 apartments were listed while 8,497 were leased. One and two-bedroom apartments constituted the largest segments of rental units. Also, almost a thousand townhouses were listed and 665 leased for the same period.

TREB data provides more of a market-based view of the rental market than what has been reported by the CMHC. Unlike TREB, which lists market-based units (condominiums and townhouses) that are primarily owned by private investors, CMHC’s reporting of rental markets is largely for, but not restricted to, purpose-built apartment rentals.

Despite the differences in rental stock between CMHC and TREB, even CMHC’s data reveals that instead of a break, rental rates accelerated in 2017. For instance, rents for two-bedroom units increased by 3.3 and 3.2 per cent in 2015 and 2016 respectively but jumped 4.2 per cent in 2017. If proponents of stringent rent controls were hoping for a decline in rent acceleration, it didn’t happen.

The purpose-built rental universe has remained steady across most of Canada. In the Greater Toronto Area (GTA), the number of purpose-built rentals has remained around 330,000 units for more than a decade. During the same time, the number of rental condominiums in the GTA increased from under 50,000 to more than 100,000 units.

CMHC data for October 2017 reported average rents for two-bedroom units at $1,392 and $2,263 in purpose-built rental buildings and condominium apartments respectively. In comparison, TREB reported the average rent for two-bedroom condominium apartments in the fourth quarter of 2017 to be $2,627. Even for the condominium apartments, TREB reports higher rents attributed most likely to the higher quality of the underlying stock.

CMHC reported rents for purpose-built rental buildings are significantly lower because of their less than ideal location and dilapidated condition, a result of age and deferred maintenance. These buildings have remained under rent control for decades, and their owners are disincentivized to improve the quality of the rental stock. TREB data, by contrast, is based on privately owned rental condominiums whose owners, until recently, were incentivized to maintain their units in a state of good repair.

Since April 2017, condominium rentals and other dwelling types have also come under the rent control regime, thus creating the same disincentives for structural improvements of units as the ones observed for the purpose-built rentals.

The CMHC data reveals that, as expected, average rents in older buildings were lower than rents in newer buildings. Furthermore, rents on average are higher in the high-density urban core than the low-density suburbs, making suburbs significantly more affordable to rent than in or near the downtowns.

With high turnover rates where new tenants are not subjected to rent restrictions, rent controls are ineffective tools for addressing rapid rent increases. The average rent for units in purpose-built rentals and condominium apartments has risen far above the stipulated rate since the Rental Fairness Act was enacted. In the long run, rent controls reduce the growth in available rental stock, which further accelerates the increase in rents.

Rent stability is achievable primarily by increasing the supply of the rental stock. This requires changes in regulations to facilitate, instead of hindering, new residential development.

Murtaza Haider and Stephen Moranis September 5, 2018

Murtaza Haider is an associate professor at Ryerson University. Stephen Moranis is a real estate industry veteran. They can be reached at www.hmbulletin.com.

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Mississauga Neighbourhood Ranked One of the Last Affordable Areas in the GTA

 

If you want to buy a home but you’re not a millionaire, there are only so many affordable neighbourhoods left in the Greater Toronto Area (GTA), and even then, becoming a homeowner is difficult if not near impossible—especially with higher interest rates and more vigorous mortgage stress tests.

However, one neighbourhood in Mississauga was deemed one of the last affordable in the GTA in a recent Toronto Life article.

As everyone know, Mississauga is not the most affordable city to buy a home in general. According to a recent Royal LePage report, the aggregate price of a home (combining all home types, including two-story homes, bungalows and condos) sits at $758,750. A two-story home typically costs buyers $873,194 (which is down from the $1 million+ highs we were seeing this past winter).

But at a time when the housing market is still hot and it’s hard to find a reasonably priced home anywhere, one pocket of land in Mississauga still hits the mark as a hot GTA neighbourhood.

There’s hope for non-millionaires who just want a half-decent house in a nice area with good schools,” says Steve Kupferman of Toronto Life.

Can you guess where?

According to Toronto Life, the Hurontario neighbourhood (namely Heritage Hills) is one of the last affordable neighbourhoods – of 20 – to buy a home, coming in at number 17.

Boasting an average sale price of $651,671, Toronto Life says “it’s easy for middle-class families to score an affordable home just steps away from the urban core.”

The magazine calls out the surrealness of seeing a massive cluster of distinctly urban high-rises from the window of your suburban low-rise. That said, they were right to single out the neighbourhood built around a large ­public park, as it’s pretty ideal for families—especially since it boasts paths to the two schools in the area: St. Matthew Elementary and Huntington Ridge Public School.

The house Toronto Life zeroed in on? A detached three-bedroom house on Bourget Drive that was listed for $789,888 and sold for $775,000.

Can you believe that, back in February, a cozy home sold for more than $200,000 over asking? How times have changed!

But what counts as a hot neighbourhood in the GTA, you ask?

According to Toronto Life’s list of the last affordable neighbourhoods in the GTA, it’s “a good-sized house in a safe neighbourhood, with decent schools and leafy green space and a commute that isn’t soul-­crushing.”

Without breaking the bank on a million-dollar home, of course, because not all of us are millionaires (yet?!).

This list was curated based on real estate data across the GTA, as well as information from brokers and residents. Researchers also examined access to parks, schools, shopping areas, and transportation into downtown Toronto to determine the best places to live for under a million bucks.

“They’re the last best hope for the desperate house hunter—and the neighbourhoods everyone will be jockeying to buy into 10 years from now,” says Kupferman.

A home is, of course, a huge investment, and you don’t want to be overwhelmed with debt just for a place to call your own. Though that might still be the case if you’re trying to buy a home in the GTA anytime soon, regardless of the neighbourhood.

But, some neighbourhoods are more affordable than others, so you might want to snatch up a home in the Hurontario area while you still have a chance.

“Only virtual millionaires, or ­non-millionaires with millionaire parents, or non-millionaires willing to commit to a lifetime of crippling debt, could afford to break into the housing market,” Kupferman says in the article. “Everyone else had to settle for cramped condos and crumbling fixer-uppers.”

As for other hot GTA neighbourhoods, The Junction Triangle in Toronto topped Toronto Life’s list, with Mimico and West Rouge close behind. Northwest Brampton, Central West Ajax, and Eglinton East sit at the tail end.

You can check out the other neighbourhoods on the list here.

Map courtesy of Toronto Life

Cover photo courtesy of Google Maps

Source: insauga.com – by Ashley Newport on July 14, 2018

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Brand New Affordable Housing Development Coming to Mississauga

I

t’s no secret that housing has become increasingly more expensive in Toronto and the GTA, with detached houses typically costing buyers in Mississauga and surrounding cities between $800,000 and $1 million (often more) and condos—even modestly-sized two-bedroom units—running buyers over $500,000.

With wages failing to keep up with soaring real estate values (and with renting becoming increasingly more costly as homes become more valuable), a lot of lower and middle-income earners have been locked out of the real estate market entirely. Those who have managed to rent or purchase homes in the city are often paying well over 30 per cent of their household income on shelter costs.

For that reason, residents might be pleased to hear that a brand new affordable housing development recently broke ground in the Malton area of Mississauga.

Late last month, Habitat for Humanity Halton—Mississauga, City of Mississauga and Region of Peel staff and officials hosted a groundbreaking ceremony to celebrate the launch of the Bristow-Law Build Project.

The property, located at 3073 Merritt Ave., was purchased for a toonie. Once home to a fire station, the land has since undergone a rigorous clean-up process and will soon to be transformed into four new homes for local families in need of an affordable place to live.

“The process from paying the city a toonie to now took about three years,” says John Gerrard, CEO of Habitat for Humanity Halton—Mississauga.

“[Councillor Carolyn Parrish] came to us and said ‘I think I can get you some land. There are some issues, you’ve gotta work through those issues,’ and we did.”

Gerrard says the main issue was the environment.

“With a fire station on site, there’s bound to be some form of environmental element that needs to be cleaned, so we did the first round and cleaned 97 per cent of it and had to go back and do one more round just to be sure. That takes almost 16 months, but now we’re here. We’ve submitted all our paperwork, it’s in the city planning department. We hope to start in September.”

Groundbreaking ceremony

Gerrard says the project, which he expects will take about 12 months to complete, will boast four two-storey units with basement suites that can be used for other family members.

“These are big homes, they’re four and five bedroom units, which are very rare. We’re very excited we can do that here in Malton, there are lots of large families here and lots of new Canadians and they tend to have larger families.”

Gerrard says the building, once complete, will house up to 20 individuals.

While the project won’t result in a massive affordable housing structure, it’s one of several projects geared towards providing more housing for the city’s lower and middle-class residents. Earlier this year, a new Daniels development with affordable units broke ground at 360 City Centre Drive.

The city has been working to increase affordable housing stock with its Making Room for the Middle strategy, a plan that involves petitioning senior levels of government for taxation policies and credits that incent affordable housing; piloting tools such as pre-zoning and a Development Permit System to develop affordable housing in appropriate locations (close to transit systems, for example); encouraging the Region of Peel to develop an inclusionary zoning incentive program for private and nonprofit developers; encouraging the region to investigate the cost of deferring development charges on the portion of affordable units provided in newly constructed multiple dwellings and more.

“Affordable housing is at the heart of our plans to build complete city,” says Mayor Bonnie Crombie.

“A Mississauga where people have access to modern public transit, and can find good paying jobs, earn an education and enjoy an unrivalled quality of life. The City of Mississauga was pleased to sell this land, a former city fire station, for a toonie. Now that’s a deal.”

As for how the Habitat project will work, Gerrard says the initiative is unique in the sense that it will allow families to become homeowners.

“This project is very unique. What happens is the family are given the home on title. They’re sold the house at fair market value, which, in this case, could be $700,000. However, they only pay 30 per cent maximum of their net home income. So if only two family members are working, they only pay 30 per cent of what they can.”

Gerrard says the residents can spend 70 per cent on all the other things they need, such as education, food, clothing and other necessities.

“That’s why our food bank use is so high, because when you have to choose between shelter and food, you sometimes choose shelter and don’t eat.”

Families who wish to move on can sell the unit back to Habitat—and take some equity with them.

“The next best thing is that they will be able to sell it back to us and we’ll keep it affordable, but give the family every penny back plus the equity, so they don’t have to go through a long process, they can give it back and we give them the value back,” says Gerrard.

“We retain the unit for another family in perpetuity. It will always be affordable housing and we’ll manage it with the family. It’s an extension of giving a hand up, and it gives a further hand up because they can buy a new home with their deposit. They take equity with them as well. It’s a homeownership program, but they’re guaranteed to get out what they put in, so if the market drops, they’re protected.”

As for who will get to move into the project once it’s complete, Gerrard says the families have not yet been chosen.

“Traditionally the building process is a long process, it can take from one to three years, we used to pick our families early on and they would have to wait and it would be frustrating, especially in some cases where people are desperate for housing,” he says.

“We work with our families and select them 120 days before the project is completed. That way, they see the reality, they see its coming and they can plan appropriately. We want them to come and learn all the extra things, like financial management, how to take care of a home, etc.”

As for the project taking shape in Malton, Councillor Parrish says it’s an ideal neighbourhood for the development.

“It’s particularly nice to welcome Habitat for Humanity to the Malton community. Malton has for some years lived down a reputation as a rough town, it’s not,” says Parrish. They are the sweetest, kindest, nicest people, and you’ll see that as you’re building here. They’ll bring you coffee and tea and they’ll be coming with their hammers and saying ‘what can I do?'” It’s a wonderful village.”

Parrish said Habitat and the city faced some challenges in terms of moving the development forward.

“It’s wonderful to have you here. Habitat is probably the most innovative group I’ve ever met, you’re always one step ahead of where the government is and you do a great job. We had a lot of problems with resistance from the airport. Thanks to the mayor and council, we’ve actually negotiated with the GTAA to change the rules around here. This is a great location, we hope to get more semis and more housing out here. The Region has been incredible.”

In terms of who will eventually live in the structure, Gerrard says Habitat works with a number of organizations to decide which families are ideal candidates.

“They could be on the Peel housing list or referred to us. We work with community groups, women’s shelters, any organization with families. We try to help anyone in need.”

And while this project is more modest in scope, Gerrard sees more substantial developments in Habitat for Humanity’s (and Mississauga’s) future.

“We’ve been working on some big projects for a couple years now. We’re hoping our next development will be somewhere in the neighbourhood of 120 units, so we’re in discussion with some developers in the community on some land, and ultimately our objective would be to work within the City of Mississauga’s new affordable housing strategy,” he says.

“We’d like to have a mixed environment that gives young people the opportunity to buy a home, at the same time being able to retain inventory to help the next family and the next family and the next family.”

The development should be complete by the fall.

 

Source: insauga.com – by Ashley Newport on July 8, 2018

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