A rent-to-own program meant to help first-time buyers afford a home in a new Port Moody condo project proved to do just the opposite.
But the developer is hoping it can revive the plan with new parameters.
Tim Schmitt, the director of development for Langley-based Marcon Development, said only one possible purchaser of 190 applicants was able to take advantage of the company’s program, that allows eligible purchasers to rent their unit for a period of time with the money going towards their down payment. Purchasers must also agree to occupy their new home as their primary residence.
In a letter to Port Moody council, Schmitt said the maximum household income threshold of $150,000 as set by the Canada Mortgage and Housing Corporation’s First Time Home Buyer Incentive (FTHBI) program that the company was using to qualify potential purchasers proved too low to allow them to get a mortgage for even the most affordable one-bedroom apartment in the Hue, a 222-unit condo building nearing completion on the site of the old Barnet Hotel.
Further, CMHC’s incentive program that provided first-time home buyers with a loan of five or 10 per cent of a home’s purchase price to help increase the size of a down payment was discontinued in 2024.
Schmitt said that means the threshold is no longer being updated to account for higher housing prices.
Schmitt said it’s created a kind of Catch-22 situation; buyers who could qualify for a mortgage under rules that set a maximum loan-to-income ratio of 4.5 times have to earn at least $160,000 to afford a $630,000 one-bedroom apartment at Hue, beyond the threshold to be able to participate in the rent-to-own program.
“The purchase price of homes in the current market is out of sync with the FTHBI program that was created over five years ago,” Schmitt said, adding the company still wants to proceed with some sort of rent-to-own program for the remaining nine homes it had originally set aside.
Tuesday, Port Moody councillors agreed to amend the city’s housing agreement with the developer to allow that to happen.
The developer will convene a second round of applicants for the program but their maximum household income cannot exceed $190,000 if they’re purchasing a one-bedroom apartment or $270,000 for a two-bedroom unit. As well, they’ll be tiered, with first consideration going to first-time homebuyers who are either Port Moody residents who have lived in city for at least a year or they’re front line workers like firefighters or police officers. The second tier will comprise all other first-time homebuyers followed by any other qualified applicants.
If any of the rent-to-own units remain unpurchased after going through all the qualified applicants, they’ll be released for general sale.
Port Moody Mayor Meghan Lahti said Marcon’s rent-to-own conundrum is “unfortunate,” as it was a major component of the company’s pitch to get the project approved.
“It was one of the most positive aspects of that application.”
Coun. Kyla Knowles said the dilemma is a symptom of communities’ ongoing struggle to secure affordable housing for their residents.
“We need senior levels of government to step up,” she said.
Port Moody senior planner Doug Allan said the new rules make the best of an unfortunate situation. In a report, he said “they address Marcon’s challenges in selling the 10 RTO strata lots, reduce the barriers to program participation, and support moderate income households by updating income thresholds.”
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