BY BILL BRADLEY
Fifty units of new affordable housing are on their way to Greater Sudbury in 2009, with more expected in the future.
Guy Labine, chair of the Greater Sudbury Development Corporation, said Wednesday at city council that land is being bought for a new concept in affordable housing called Options For Homes.
Construction is expected to begin this summer with occupancy by December 2009, said Labine. The units are expected to be lacking in expensive frills but of good quality and energy efficient, he noted.
Labine was making a presentation on the progress of the city's economic development group to city councillors.
Not only is there a lack of housing available for current residents, but unless there are affordable units present for newcomers, it could halt the economic growth the city is experiencing, said Labine.
“We need people to move here for the good paying jobs that are available. Some cannot afford now to enter the housing market,” said Labine.
If renters are able to buy affordable housing, then that would free up their current rental units for others trying to get into the rental market, said Labine.
“We became aware of a new program called Options For Homes at a workshop we attended. We then have been looking for a local developer to take interest in the concept,” he said.
The concept involves the developer providing part of the down payment of a housing unit for buyers of condos and townhouses.
According to a Toronto Star article by Dee Gibney in 2003, Options For Homes was launched in 1992 by founder Mike Labbe, a nephew of the late Toronto social activist and journalist June Callwood.
It works like this. If a condo costs Options $100,000 to build, then it would normally sell for $110,000 at market prices. Options sells it for $100,000. The difference of $10,000 becomes a second mortgage.
The down payment is usually based on the market value but Options only requires a $5,500 down payment based on the market price of $110,000. The developer is using the $10,000 as a contribution towards the down payment. That means the down payment is taken off the cost price ($100,000) leaving the buyer with a mortgage of $94,500, $10,000 less than they would have had to pay at full market price.
If the buyer then sells the unit later they must share the profit with Options who roll the money into new projects.
Labine said there is enough interest locally to begin the process of finalizing pre-construction details.
“Tom Corbett, a construction project developer has agreed to champion the project and serve as the development consultant for Options for Homes-Greater Sudbury. Design and servicing cost analyses are being finalized, and site acquisition and rezoning are being completed,” said Labine.
