Pilot project to create many opportunities for low-income families

Shannon LeClair

Times Reporter

 

Affordable housing always seems to be just out of the grasp for many families, and is a difficult task to achieve for municipalities. Strathmore is taking a leap into what may be the first viable project, which allows people the opportunity to purchase their own home when otherwise they may not be able to.  

On Oct. 6, Council approved a Memorandum of Understanding between the Town of Strathmore and Classic Construction Ltd.  Town Council and administration have been working on an Affordable Housing project with Classic Construction Ltd. since early 2009.  The engineering has been substantially completed, and the preliminary site work is due to begin within the next few weeks. If all goes well, foundations will be in the ground prior to winter freeze.  

The project is comprised of six eight-plexes.  Twenty-four of the units will have two bedrooms and the remainder will have three bedrooms.  One 2-bedroom eight-plex and one 3-bedroom eight-plex are to be constructed immediately, with the remainder following in the new year. 

This project is unique because the units will be for sale rather than for rent.  To enable those individuals and families earning at or near the Core Needs Income Threshold (CNIT), the Town will provide a second mortgage.  This second mortgage will carry no monthly payments and will only be repaid on resale, or if the unit is rented. 

“We are not aware an affordable project with this type of ownership being proposed in any other jurisdictions,” said Linda Nelson, Deputy Chief Administrative Officer for the Town. The project is still in the pilot stage but councillors and administration are excited by the project and are optimistic that it will succeed.  

A portion of the money for the project has come from grants given through the Municipal Block Funding Program. “With the town providing the second mortgage, individuals and families earning at or near the Core Needs Income Threshold will have an opportunity to own their own homes, as the provision of the Equity Loan (second mortgage), will have the net effect of dramatically reducing the cost of the home, which will in turn enable households with lower incomes to qualify for a mortgage, often for smaller payments than rental costs,” said Nelson.  

If a unit is sold, the repayment of the second mortgage remains with the unit, which provides opportunity for the second and subsequent purchasers the same benefit, and in effect, the unit remains affordable in perpetuity, or for as long as there is a demand for affordable housing.  For example, in the unlikely event the unit does not sell to an individual who meets the CNIT within a required amount of time, the unit would go on the market to any prospective purchaser, with the second mortgage being paid back to the Town, which could be used toward another affordable project.

“Optimistically, if this project is proven and successful, and there is more block funding available in the future, we will have paved the way for future ventures of this type. It could go a long way in alleviating this social issue that everybody is facing,” said Nelson.    

The Town is very excited to see this worthwhile project finally coming to fruition, particularly since the units will be offered for sale, rather than as rental accommodation to those who would not have normally been able to own their own homes.  This is a great opportunity for a new beginning for families of all ages, circumstances, and lower income levels.