How 'attainable' is Langford's Attainable Home Ownership plan?

Want more Westshore news straight in your inbox twice a week? Sign up here for the Westshore newsletter.

Last week Langford announced a new program to help families enter the housing market by contributing to the down payment needed for a two-bedroom condo. The program, called the Attainable Home Ownership Program, will kick in up to $16,875 towards a $450,000 home, on a stepped scale based on income.

But there’s a catch. Several, actually.

While the program will launch formally in early 2022, participants won’t move in for at least a year from that point. The participating condos haven’t been built yet.

Program participants can’t just pick any condo, either. The program will only apply to certain units in buildings from participating developers. The suites will adhere to a minimum requirement of 875 sq. ft., two 10ft. by 10 ft. bedrooms, one bathroom and will pre-sell for $450,000 to approved recipients of the grant.

It’s a below market sale for developers, but on the flip side they can expect a lineup of buyers ready to contribute to pre-sale financing. A Langford spokesperson said this is one way the city hopes to incentivize affordable condo builds.

Mayor Stew Young is quoted in the press release saying the program is for people who are “struggling to save the amount necessary for a down payment.” But the city grant money only kicks in when the unit is ready, so buyers are on their own to get pre-sale deposit money, which local realtor Marko Juras said can be 5% to 20% of the purchase price, so up to $90,000.

There’s no financing available for a pre-sale deposit. Most buyers will have that money saved up, or get help from family. Sometimes the deposit is paid over time, but that’s not common on smaller deposits.

There’s no mention, in city materials about the program, of saving for the pre-sale deposit. (To qualify for the program, applicants can’t be getting any help from the bank of mom and dad, either.)

Considering the program’s goal, participating developers might go with a 5% pre-sale deposit of $22,500 and offer a 12-month payment plan. In that scenario, a buyer would pay $1,875 a month on top of their rent while they wait for their new home to be built.

We asked the Langford spokesperson about the decision to rely on pre-sale financing, and how it will work, but they had no details. “I’ve never bought a pre-sale home, so I don’t really know how that goes,” she said.

The next catch is that these units, being sold for about $50,000 under market value, could be less than desirable units.

Juras referenced one building currently proposed near the highway at the end of Goldstream Avenue. Thirty-one of the 102 units are proposed to be part of the program.

The south-facing units will have a wide view of Langford Lake. But the “attainable” units “are right on the highway,” Juras said. “They’re facing the highway at eye level. These are going to be extremely undesirable units. You could literally spit onto the highway from those units.”

Juras suspects that’s not an oversight.

“This program could end up to the benefit of the developer, helping them offload undesirable units. I think it’s a political ploy to make Mayor Stew Young look good.”

The price point of $450,000—a full $40,000 less than the lowest priced two-bedroom condo listed today, and even further below any pre-sales being offered for an equivalent space—is based on what’s considered affordable to the average household income in Langford, which the city has estimated to be $125,000 (adjusted to 2021 from the 2016 census).

The maximum grant of $16,875 will go to a two-person household making less than $99,000 per year. Anyone making up to $115,000 will get $11,250, and those with a gross household income of up to $125,000 will get $5,625.

Funding for the grants—there’s enough for 250 families to participate—is coming from Langford’s Affordable Housing Reserve Fund, which developers have been paying into when they get a property rezoned.

Right now the program is only for two-bedroom units, but future iterations may open for both smaller and larger sized homes. Applicants must be at least two people, make less than $125,000, have lived in Langford for two years, own no property, have less than $50,000, qualify for a mortgage, and get no down payment help from family.

To discourage these units from being used as investment properties, they’re not allowed to be rented out, and if an owner sells within five years, the sale price will be capped at $472,500 in the first three years, and $495,000 in the fourth and fifth year.

Langford is still in negotiations with developers; no firm commitments have been reached yet.