Earlier this week City of Vancouver announced that it plans to create new affordability program for local residents. The purpose of the program is to address unaffordability issues in Vancouver BC. Specifically, Vancouver’s residents not being able to afford to purchase their first home due to rapid increase in the real estate prices.
If you feel skeptical about such program, you’re not alone. However, there are similar programs already in place in Calgary, Toronto and United Kingdom.
Don’t get too excited about the program just yet. To implement this program the city needs to secure permission from the province to change the Vancouver Charter. The Charter doesn’t necessarily prevent city from having a shared homeownership program. But the council is sticking with the motto – “better safe than sorry”.
How would the program work?
Details aren’t finalized, but the program would involve the city purchasing about 20 per cent of a units in a new development so the buyer – who would be subject to numerous restrictions – wouldn’t have as high of a down payment or mortgage payments. If the value of the property goes up upon sale of one of the unit in the “affordability program” City of Vancouver would receive it’s share of profits. If there are any remaining profits, these would be shared with the homeowner. It’s a win-win situation.
Who would qualify for the program?
- Must be a resident of the city for a minimum of five years
- Must be a permanent resident or citizen
- Must never have owned property before (first time buyer)
- Must be employed in Vancouver
- Earn less than $67,540 per year for one-bedroom units (as a household)
- Earn less than $96,170 per year for two and three bedroom units for people with children (as a household)
- Must complete a home buyer education course
How many units will be available in the program?
The city aims to create 300 affordable units within the next 3 years. At least half the the available units will have two to three bedrooms. City officials said they might create a lottery system to see who gets to buy in. There are estimated 30,000 qualified households in Vancouver at the moment.
In my opinion it is fantastic the City of Vancouver is creating such programs. It is no secret that there are a lot of people that can’t afford to purchase their first condo in the city. With such programs we boost economy and help first time buyers. That’s why I love Canada, more specifically Vancouver! Where else will you find government care so much about people’s well being (outside of Toronto, Calgary and United Kingdom lol)?