Staff Report: Attainable Home Ownership Program

Staff Report to Council

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e administration@langford.ca
2nd Floor, 877 Goldstream Avenue
Langford, BC V9B 2X8

DATE: Monday, January 10, 2022
DEPARTMENT: Planning
SUBJECT: Attainable Home Ownership Program Policy No. POL- 0166-PLAN

BACKGROUND:

At the Regular Council Meeting held October 18th, 2021, staff made a presentation to introduce the new Attainable Home Ownership Program (the Program), which is designed to provide a down payment assistance grant to qualified Langford residents to help them purchase a new 2-bedroom condo in a participating development. This presentation included information regarding the structure of the Program, the qualifying criteria for applicants, the proportion of down payment assistance that would be provided to applicants based on their household income, and specifications for the units to be sold through the Program.
The Program website has been live since October 19th and since this time has had nearly 6,000 views and over 500 people register for updates, indicating strong interest in the Program.
Staff have also received a high volume of inquiries from prospective applicants and potential developer partners seeking more information as well as indicating their support to expand the Program to include additional unit types and price points sooner rather than later.

As the Program will need to be formalized through the creation of a Policy, similar to the existing Affordable Housing Program, Council may wish to consider implementing an expanded range of housing options with the initial Policy. This report outlines the content of the proposed Attainable Home Ownership Program Policy.

COMMENTARY:

Staff have been in discussions with stakeholders to prepare a proposal to expand the Program to include 1-bedroom units, 1-bedroom and den units and 3-bedroom units in addition to the 2-bedroom units originally presented. The suggested minimum unit sizes, maximum sale prices, maximum household income levels, and household composition criteria are summarized in Table 1 below.

Table 1: Suggested Unit and Household Criteria

The “minimum household income” levels to qualify for a mortgage for each purchase price is noted for reference. It is highly advised by mortgage brokers and credit union staff that have been consulted through the development of this program that a “buffer” should be provided between the minimum qualifying income and the maximum household income threshold identified by the criteria in order to ensure that enough people can realistically qualify for the Program to make it successful.

As was outlined in the Housing Needs Report prepared for the City in 2020, housing is considered to be affordable to a household when all housing costs equal less than 30% of the household income. Council may wish to view the range of options presented above through this lens both in terms the proposed purchase prices and household income levels as well as the estimated median income levels of Langford households. Table 2 below includes the estimated monthly cost of each unit type, including mortgage payments, taxes, strata fees, insurance, utilities, as well as a breakdown of the percentage of the household income that would be required to cover these costs at both the maximum household income threshold and the estimated minimum household income required for mortgage approval; Table 3 provides the 2019 household income levels for the different Stats Can household types included in the Housing Needs Report as well as an estimate of the 2021 household income levels based on 2% cost of living increases in 2020 and 2021.

Table 2: Affordability Metrics

So, the percentage of monthly income required to cover the costs of each housing type are slightly above 30% at the lower end of the income range and slightly less than 30% at the upper range. This helps to reinforce that the proposed purchase prices and income thresholds are hitting the right mark in terms of affordability, or attainability, to residents.

Table 3: Household income (2019)

This demonstrates that:

• Couples with Children making the median income fall just within the upper limit of the suggested maximum household income for 3-bedroom units;
• Couples without Children making the median income are in roughly the middle of the range between minimum qualifying income and the suggested maximum household income for the 2-bedroom units and 1-bedroom options;
• Lone Parent Families and individuals making the median income fall below the minimum qualifying income for mortgages at all of the price points, so including these types of households in the Program under the proposed household income thresholds will allow individuals/lone parent families making more than the median income to qualify; and
• Non-census families will not typically pursue condo options as they generally need larger living spaces, and such families making the median income would not qualify based on the maximum household income thresholds.

In addition to these changes, Council could consider expanding the residency component of the qualifying criteria to include members of the Canadian Armed Forces posted in Victoria and members of the RCMP posted in the Westshore, as discussed at previous Council meetings. This would allow members posted as such to qualify if they do not meet the Langford residency requirement, but they would still have to meet the other requirements (maximum household income, etc).

Council may wish to consider all of these factors with regards to the new proposed unit types, purchase prices, household income thresholds, household compositions (i.e. number of people in the household and dependants), and other qualifying criteria and provide direction to staff to draft the Policy, either as proposed or with amendments.