Saturday, April 08, 2006

Condos to Rise for Low-Income Families

Ryan Pomeroy, 23, grew up in south Etobicoke, moving with his family from one rental apartment to another -- always dreaming of a home of his own.

He still is.

"I never had this situation where there was a solid, stable house," said Mr. Pomeroy, whose 19-year-old fiancée, Amanda Seymour, is expecting their second child any day. "I want my kids to have what I never had."

Now, with a little luck, his dream may be within reach.

Yesterday, he and Ms. Seymour were among prospective buyers on hand to check out a new south Etobicoke condominium that uses new tools offered by the developer and governments to help low-income families with their down payment.

At an event to kick off construction of the 178-unit building near Lake Shore Boulevard and Kipling Avenue, officials say the project could be a model for others.

"This breaks down a whole bunch of barriers for the first-time home buyer," said Mitchell Cohen, president of the Daniels Corp. The company also severely pared project costs by marketing through word of mouth in the local community and offering fewer custom options for the units.

Mr. Cohen is betting that the down-payment help offered by his company and the federal and provincial governments will give low-income tenants from nearby subsidized housing the means -- and motive -- to become homeowners. In turn, that will free up units for some of Toronto's 65,000 families on the waiting list for affordable housing.

The key feature of the south Etobicoke project is what the developer, the province and the federal government put on the table, assuming the first-time, low-income buyer comes up with 5 per cent of the purchase price as down payment.

Daniels will match the 5-per-cent down payment, with principal and interest (of 5 per cent) repaid after five years.

Under the federal-provincial affordable housing agreement, Ontario and Ottawa will also match the buyer's 5-per-cent down payment. But the governments waive the principal and interest -- making it, in effect, a grant -- if the owner stays in the unit for at least 20 years. That aid is worth $1.6-million for the Etobicoke project. In addition, Canada Mortgage and Housing Corp. will amortize the buyer's mortgage over 35 years, without charging higher interest, instead of spreading payments over 25 years.

In all, the buyer gets the equivalent of a 15-per-cent down payment and financial flexibility in the first years of home ownership.

At its 13-storey Etobicoke project, Daniels prices a one-bedroom condominium at $151,905. Without the special incentives, a buyer with 5 per cent of the purchase price and a 5.3-per-cent mortgage would pay a total of $1,283.43 a month, including taxes and maintenance fees.

But with special help on the down payment, a buyer would pay a total of $1,083.92 -- equivalent to rental payments on the unit.

"We can assist residents who might not otherwise be able to get into the housing market through down-payment assistance, while at the same time easing some of the demand for affordable rental housing," said Ontario Municipal Affairs and Housing Minister John Gerretsen. "What we will learn from this experience may well be a template for the future."


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