Banff

The Banff Housing Corporation (BHC) aims to provide affordable housing for all. Through both their rental and purchase programs, they strive to connect people with places to live within their budgets. Their rental program caps rent at 30% of a household’s income, meaning these renters can potentially save enough to one day buy a house.

Their home purchasing programs include price restricted and equity share models, meaning the BHC owns a share in the house and the homeowner owns the majority share. While there is no income cap for applying to BHC, the price restricted model applies an equity cap on the homes purchased through the program of about 1-2% per year. These properties are not meant to be investment properties, but rather homes for people to live in.

“Buying on the open market can be more on the investment side,” says Sharon Oakley, Manager of Housing Sustainability for The Town of Banff. “None of the properties in our affordable program can be purchased as a rental investment: they must be your primary residence. When people buy through us, they’re not buying a house, they’re buying a home.”

The program has a robust portfolio of units from one-bedroom, apartment-style condos to three-bedroom houses. Their newest project, The Aster, added another 33 units that sold out quickly. The project is slated to be completed this year.

 

Canmore

Canmore Community Housing (CCH) operates on a different model to provide affordable homes to people in Canmore. They also offer various rental and purchase programs for people struggling to find housing in town. The purchase program recently underwent some changes to accommodate the skyrocketing market. In order to qualify, applicants must make less than $250,000 per year in combined household income. There is an information session that outlines the program, and there are other factors such as employment in the community that play into the application process.

“These communities have started these programs because in the absence of having them, they were losing families,” says Dougal Forteath, former Managing Director for CCH, “These families feed the school system, the activities, and the social and economic vibrancy of the communities and the region as a whole.”

Currently, this program has 157 home ownership units throughout the community with hopes to expand this year. This means there are 157 less people in the rental market space, clearing that up for people looking to rent as well. Much like the Banff program, there are equity caps on these homes, so they’ll stay within the affordable range for years to come.

 

Affordability

Both of these programs have a waitlist, and applicants can expect to view homes on a first-come, first-served basis. There is no penalty for passing on a house, since there are lots of factors that play into buying a home.

“To get on the list, you are required to get in touch with a mortgage broker or lender who is familiar with these programs to obtain a pre-qualification letter to go with your application,” says Shannon Hendrikse, mortgage broker and owner of Canmore Mortgage House.

Hendrikse says the list of available banks and lenders who will finance homes within these programs is shorter than is normally available for properties on the open market. Some lenders consider the structure of these programs to be restrictive, particularly with the capped equity and the fact that the properties within both programs are on leased land. This leasehold structure allows the organizations to continue with their affordability mandates. “Some lenders will consider certain developments in the program, but not others. The local lenders tend to get it, and they’re often great choices for these programs,” says Hendrikse. When it comes time to purchase, it’s a great idea to work with a mortgage broker who understands these programs and can offer you some choice between lenders so you get the best mortgage available.

There are some benefits of looking for a mortgage within these programs too. In the BHC setup, for example, the equity sharing means more of your down payment is covered by the program so you can get the best rates and don’t need to worry about default insurance. In the CCH program, the lower price point means buyers can have a better down payment relative to the price of the home.

 

Nuances of Affordable Housing Programs

When it comes to applying for either affordable housing program, it’s important to understand what you’re buying into. Both programs are looking to help local residents and families settle into a secure housing situation. They exist to help people buy homes.

What these programs don’t do is provide investment opportunities. If you can qualify on the open market, you have the potential to recognize more gains if you sell your home. Because both programs cap equity growth, either through an equity cap or through shared ownership, there is only so much equity you’re going to generate if you purchase within the program and decide to sell at a later date.

What these programs do extremely well is provide the opportunity for people to own their own homes and to live, stay, and work within the Bow Valley. They have a much lower cost of home ownership than trying to compete on the open market. The homeowners get a lot more for their money, because the lower purchase price mean they’re paying a lower price per square foot. If they’re not looking at it from an investment perspective, the security of having a roof over your head and owning your own space makes these programs an excellent entry point into an extremely expensive and competitive market.

If you’re interested in affordable housing options in the Bow Valley, visit banff.ca/156/Banff-Housing-Corporation or canmorehousing.ca for more information on the programs available.