Low and moderate income residents looking to purchase their first home could get a bit of help from the City of Prince Albert.
On Monday, city council approved a new Down Payment Assistance Program at their first executive committee meeting of 2020. The program will provide up to $5,000 for residents who have not owned a home for four years, and who are purchasing a dwelling valued at $187,796 or less. It must receive approval at the next regular council meeting on Jan. 27 before becoming official.
Council members and city administrators started working on the program in 2018, and Mayor Greg Dionne said it would give a boost to those who need it most. The city already has two other incentive programs designed to improve access to housing, but Dionne said the more programs, the better.
“To me, the more programs the better,” he told council. “I like it. We’ve got lots of cash for all three of the programs, so I don’t want anyone to think that we’re going to be short on any money.”
“If you’re a new family or a recent graduate from university, you’re not earning the big dollars yet (and) you’re paying off student debt, so this is a great, great tool to attract those graduates to our city,” added Coun. Evert Botha, the project’s most enthusiastic supporter. “Let them come and settle here, dig in their roots in our community and hopefully stay.”
Under the program, homebuyers will receive assistance equal to 2.5 per cent of the dwelling’s value, provided that total does not go over the $5,000 cap. The funds will be available on a first come, first serve basis, and limited to the first five applicants, although the city could expand the program if demand is high.
If successful applicants tried to sell their house in the first year they would be responsible for paying back the entire grant. City administrators say this is to prevent property developers from taking advantage of the program to buy houses, fix them, and then flip them for a profit.
Properties that are in tax arrears are not eligible for the program.
All funds will come from the Housing Reserve, which has a balance of $724,464.
Dionne said he’s confident that’s enough to cover all three affordable housing programs, but not all councillors were convinced. Coun. Terra Lennox-Zepp was the most vocal critic. She worried the Housing Reserve would be depleted too quickly, and said she hasn’t heard any evidence that $5,000 make a difference to new homeowners.
“I know that housing reserve is at the $700,000 mark right now, but I’m thinking about the future and we did not fund that (during budget deliberations,)” she said during the meeting. “We’ve got two other excellent programs that are drawing funds out of it, and as the report states, if this motion passes, and if we have the maximum number of applicants … it would use about 50 per cent of the incoming funds per year.”
“My overall concern here is that is there any evidence that a Down Payment Assistance Program would actually make a change that we’re looking for,” she added. “I think the point of this is (helping) people purchase homes that they otherwise wouldn’t be able to. If they can purchase a home on their own steam, then that’s not really what we as a city, we’re looking for people who could not otherwise purchase a home but for $5,000, and as of yet, I haven’t seen any evidence showing that $5,000 would make that leap.”
Typically, city council will put roughly $42,000 into the Housing Fund every year, along with four per cent of all residential property sales from the past year.
The City has made a formal application to the provincial government for financial support. They’re expecting a response sometime before the end of January.
Prince Albert also has a Secondary Suite Program, which gives financial support to residents looking to upgrade bedroom suites so they can be rented out. Craig Guidinger, the City’s Director of Planning and Development, said they’ve had a lot of interest in the program, but only one formal application.
The City also has an Affordable Housing Program, which grants up to $5,000 per unit for multi-family dwellings. That program had one application approved during the last budget quarter.