“Higher multiple starts were nearly offset by a decline in single starts and rural area starts in April. As a result, total housing starts edged higher in April,” said Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre.

The seasonally adjusted annual rate of urban starts increased by 5.1 per cent to 182,500 units in April. Urban multiple starts increased by 27.2 per cent to 98,600 units, while single urban starts decreased by 12.7 per cent to 83,900 units.

April’s seasonally adjusted annual rate of urban starts increased 16.4 per cent in British Columbia, 6.7 per cent in the Prairie region, 4.5 per cent in Ontario, and 1.1 per cent in Quebec. Urban starts decreased 3.3 per cent in Atlantic Canada.

Rural starts were estimated at a seasonally adjusted annual rate of 19,200 units in April.

As Canada’s national housing agency, CMHC draws on more than 60 years of experience to help Canadians access a variety of high quality, environmentally sustainable and affordable homes. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making vital decisions.

Housing Starts

Stephen Gordon – National Post

Here is part of what is hopefully one of the last of a once-robust breed – The Apocalyptic Canadian Housing Market Story, this one from Macleans:

Judging by the latest real estate data, the Canadian housing market could scarcely be better. Average home prices are up more than 16 per cent this year, and in May they hit an all-time monthly high, according to the Canadian Real Estate Association. By those numbers, Canada didn’t just sidestep the housing market crash that continues to plague the United States, it sailed right through it virtually unscathed. And yet, there are plenty of signs that the Canadian housing market is still sitting on some very shaky ground—and even the potential that Canada’s big housing crash is yet to come.

Yadda yadda yadda.

We all know that the proximate cause of the U.S. recession was the bursting of its housing market bubble: it blew up banks, laid waste to personal balance sheets, and left millions of people stuck in homes whose mortgages were more than their market value.

And then Canada went into recession. Unfortunately, this set up the following error of logic that was repeated in all-too-many Canadian newsrooms:

1. The U.S. is in recession because its housing market blew up.

2. Canada is in recession.

3. Therefore, Canada’s housing market must be blowing up as well.

And so it was the fate of any number of hapless Canadian journalists to be given assignments to bash out pieces that fit this narrative. But these exercises were all doomed to failure. The decline in house prices in Canada is a symptom of the recession, not its cause.

Let’s look at how house prices have behaved since 2003:

Canadian and US price indices

U.S. house prices have fallen almost 40% (all changes are expressed in per cent log terms: 100 times the difference in the logs), while Canadian house prices are still within 10% of their peak. There are any number of lazy analysts who have swallowed the faulty syllogism enumerated above and have concluded that ‘Canada is following the U.S. with a lag’. This only makes sense if you think that Canadian house prices rose for the same reasons that US prices rose, and that they have fallen for the same reasons that U.S. prices have fallen. This is not the case. As has been documented at great length here and elsewhere, the Canadian economy has avoided the worst of the bubble and its consequences for the following reasons (among others):

1. We never had restrictions on interstate banking, so Canadian banks spread their assets and liabilities across Canada. (So it doesn’t matter if a local housing market goes bust).

2. We don’t have Glass-Steagal. The investment banks joined the retail banks some years ago.

3. We don’t have mortgage interest deductibility from taxes. So paying down your mortgage is a tax-free investment. So most people want to pay down their mortgages.

4. (Except in Alberta), mortgages are fully recourse. You can’t just walk away from a negative equity home and hand the keys to the bank; the bank will come after you for the difference.

Yes, house prices have fallen. But the linkages that make the U.S. story so compelling don’t exist here. We don’t have banks that are blowing up. We don’t have massive waves of foreclosures (even the Globe and Mail has given up on its series of articles that culminated in this silliness). Nor do we have much in the way of evidence that lower house prices are causing undue inconvenience to Canadians: when Maclean’s decided to jump on the OMGWTFBBQ housing market bandwagon, the best it could could come up with in the way of a victim was some flipper of 7-figure Vancouver condos who got caught mid-flip. Boo-hoo-freaking-hoo.

Moreover, it’s becoming pretty clear that the decline in house prices is not so much a national story as it is one of falling house prices in Vancouver, Calgary and Toronto:

Canadian city house price indices

Vancouver is and always will be a special case whenever we talk about housing prices in Canada: its geography makes it extremely difficult for developers to respond to increases in demand. This is the sort of environment in which bubbles flourish so I’m not going to pretend that I can predict movements in Vancouver house prices. In Calgary, the incipient recovery in the oil sector will no doubt establish a floor on housing prices there fairly soon. And there’s even not-entirely-bad news out of Toronto these days. So I don’t see just how the national index is supposed to fall by another 30% or so.

It’s worth following the housing market numbers. But they are going to be at best a coincident indicator in this cycle.

Stephen Gordon is a professor of economics at l’Université Laval in Quebec City, Canada and a fellow of the Centre interuniversitaire sur le risque, les politiques économiques et l’emploi. He is co-author of the blog site, Worthwhile Canadian Initiative.

http://www.jeffreyteam.com/blog/toronto-real-estate-market/the-oversold-story-of-the-canadian-recession/

brought  by Moishe Alexander, CFC  canadian funding corp CEO

More than half a million Canadians have fallen behind on their various credit payments, fuelling a 19 per cent rise in the average national delinquency rate in the one-year period ending May 31, 2009, says a new report from Equifax Canada.

The credit bureau called the double-digit jump “alarming,” noting the average delinquency rate for Canada hit 1.52 per cent at the end of May.

Much of the trouble stemmed from missed payments on credit card bills and for sales finance purchases of items such as furniture and electronics.

Equifax defines delinquent bills as those that are at least 90 days overdue.

Nadim Abdo, an Equifax vice-president, stressed the “sharpest increase” in delinquencies resulted from credit card and sales finance purchases, which have risen by 38 per cent and 58 per cent, respectively, since May 2008.

Rising delinquencies in those areas are troubling because consumers tend to miss payments on those unsecured credit products before they fail to pay back collateral-backed loans such as mortgages, bank loans and lines of credit, Abdo said.

US Credit Card Delinquency Rate Jumps 11 Percent

Inquiring minds might be asking for a comparison between Canada and the US. For the answer, please consider 1Q credit card delinquency rate jumps 11 percent.

Credit card holders who in ordinary years might have used their tax refunds to pay down their balances apparently spent the money elsewhere as the recession deepened in the first quarter.

That’s one of the conclusions that may be drawn from data showing the delinquency rate for bank-issued credit cards rose 11 percent in the first three months of the year, according to credit reporting agency TransUnion.

The delinquency rate jumped to 1.32 percent this year, from 1.19 percent in the first three months of 2008, TransUnion said. The statistic measures the percentage of card holders who are three months or more past due on their payments for cards bearing MasterCard and Visa logos, along with American Express and Discover cards.

The average total debt on bank cards also rose, jumping to $5,776 from $5,548 last year.

TransUnion measures credit card delinquencies at 90 days, but tracks mortgage delinquencies at 60 days. Becker said that is because card payments are typically much smaller than mortgage payments, and it’s easier to catch up on past due cards. For people in financial distress, it’s much harder to produce two mortgage payments once they fall behind, he explained.

Not surprisingly, bank card delinquency rates remained the highest in the states hardest hit by the mortgage meltdown: Nevada, Florida, Arizona and California.

North and South Dakota and Alaska, the states with the lowest rate of mortgage delinquencies, are also the states with the lowest credit card delinquencies, TransUnion data showed.

TransUnion, which samples 27 million consumer records to produce its data, expects the rate of credit card delinquencies to rise for the rest of the year, ultimately reaching about 1.7 percent.

Note that the US rate was a comparison of March 2009 to March 2008 while the rate for Canada was a comparison of May 2009 to May 2008. Thus Canada and the US are following a similar path.

Dynamic Maps

The Federal Reserve Bank of New York has Dynamic Maps of Bank Card and Mortgage Delinquencies in the United States that some may wish to consider.

In regards to mortgages, Canada has some “catching down” to do, and it will. All the bubble areas such as Vancouver, Calgary, Toronto, etc are going to get hit hard.

Mike “Mish” Shedlock

http://globaleconomicanalysis.blogspot.com

Click Here To Scroll Thru My Recent Post List
Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

http://offshoreinn.com/investing/500000-canadians-90-days-behind-on-credit-payments-delinquency-rate-hits-152-us-delinquency-rate-is-132/

reviewed by Moishe Alexander, CFC CEO

According to statistics released by The Canadian Real Estate Association (CREA), actual (not seasonally adjusted) home sales via the Multiple Listing Service® (MLS®) of Canadian real estate boards totaled 49,521 units in May 2009. This is less than one per cent below activity in the same month one year ago. Year-over-year declines have been shrinking since the beginning of the year.

The seasonal increase in activity continues to be stronger than normal. As a result, seasonally adjusted home sales rose eight per cent to 37,649 units in May compared to April. This marks the fourth consecutive monthly increase in seasonally adjusted activity. Seasonally adjusted activity in May was 43 per cent above where it stood in January 2009.

Seasonally adjusted sales were up on a monthly basis in about 70 per cent of local markets. Monthly activity gains in Toronto (nine per cent), Calgary (25 per cent), Montreal (10 per cent), Vancouver (eight per cent), and Edmonton (12 per cent) contributed most to the overall increase in monthly activity.

The national MLS® residential average sale price in May 2009 reached the highest monthly level on record. At $319,757, it was up fourth tenths of a percentage point from the previous record set in May 2008. Over the past four months, the national MLS® residential average price has recovered 16.4 per cent from the low in January. The average price for MLS® home sales climbed to new heights nationally, and in Saskatchewan, Ontario, Quebec, New Brunswick, and Nova Scotia. New records were posted in only 15 per cent of local markets in May, none of which are among the most active or expensive. The strong rebound in sales activity, not price, in Canada’s most expensive markets is driving up average prices nationally and in some provinces, just as a sharp decline in activity in these markets pushed average prices lower in late 2008.

The supply of homes coming onto the MLS® market continued to decelerate in May. Seasonally adjusted MLS® residential new listings edged lower by eight tenths of a percentage point to 65,070 units, the lowest level since December 2005. Seasonally adjusted new residential listings in May were 19 per cent below the peak reached one year ago.

With the number of sales rising strongly and new listings trending downward, the balance between supply and demand is firming up in British Columbia, Alberta, Saskatchewan, Ontario, and Quebec. This resulted in national sales activity as a percentage of new listings reaching the highest point since December 2007. Residential dollar volume for MLS® sales climbed 10 per cent from the previous month to reach $11.4 billion in May. This is more than 50 per cent above the low of $7.5 billion reported last January.

“Sales activity is now closer to the pre-recession peak than it is to the recent low point reached last January,” says Regina Broker Dale Ripplinger, President of The Canadian Real Estate Association. “Strengthening consumer confidence, low interest rates, and improved affordability are drawing buyers to the housing market across Canada,” he added.

“Fueled by a string of monthly increases in activity, the number of transactions in May reached the highest point since July 2008,” said CREA Chief Economist Gregory Klump. “Inventory levels are still high in many markets, but fewer new listings and rising sales activity suggests that the selection of homes available for sale may shrink as the year progresses. The supply of homes up for sale needs to be drawn down further before average price increases become more widespread among local markets.”

http://www.muchmormagazine.com/2009/06/national-resale-housing-continues-to-rise/

Only modest house price declines despite predictions of double digit depreciation

Consistent with current economic trends, Canadian residential real estate prices declined during the first quarter, according to a quarterly House Price Survey released today by Royal LePage Real Estate Services Ltd. As the market correction unfolds, year-over-year home prices were lower, as was expected. Increased buyer activity at the end of March suggests that spring will bring its typical increase in unit sales activity as buyers target summer moves.

Regional disparities in quarterly housing prices showed markets in Atlantic Canada outperforming other areas of the country as hardy local economies spurred house price growth across the three housing types surveyed. Markets in central Quebec and eastern Ontario held steady with areas of modest growth and limited declines. In the balance of Ontario, and in particular the Greater Toronto Area, prices retreated from the record levels set in the first quarter of 2008, with most trading areas showing mid to low single digit declines. With the exception of Manitoba, western provinces saw significant changes as the rapid run-up in prices experienced earlier in the decade gave way to double-digit declines in most regions. As market corrections in B.C. and Alberta were underway well ahead of the full impact of the current economic crisis, it is suggested that these areas may be first in Canada to stabilize.

“We expected a sharper decline in house prices across Canadian markets during the first quarter,” said Phil Soper, president and chief executive officer, Royal LePage Real Estate Services Ltd. With economic hardship dominating our global consciousness, it was predictable that dwindling consumer confidence would continue to drive prices lower. But markets were relatively resilient during the period. Soper continued, “Canadians in most regions should not expect the prices of their homes to begin appreciating again until the overall economy begins to stabilize, likely in the first half of 2010.”

The report shows that the average price of a two storey home in Canada declined 6.5 per cent to $379,636 compared to the same quarter last year. In Vancouver, the average price declined 12.6 per cent year-over-year to $828,750 while in St. John’s prices climbed 15.6 per cent to $265,000. With consumer confidence bolstered following investments by Vale Inco NL and Hebron, Soper commented: “Using house price change as a gauge, Newfoundland is Canada’s sole remaining seller’s market.”

Moderate growth occurred for detached bungalows in Montreal (up 2 per cent) and Ottawa (up 1.9 per cent), while Toronto saw a decline of 6.3 per cent compared to the same period in 2008. Prices in the prairies and in western cities declined with the average price for a detached bungalow down 8.1 per cent in Saskatoon and 11.2 per cent in Edmonton.

The nation’s condominium market waned with the average price of a standard unit dropping 4 per cent to $232,877 compared to $241,152 in the first quarter of 2008. Calgary saw a 12.8 per cent drop in average price of condominiums, but declines were less severe in Vancouver (down 5.3 per cent) and in Toronto (down 3.1 per cent). “Condominiums are generally the most affordable housing option, especially in urban centres,” Soper said. “With record low lending rates and new government initiatives aimed at encouraging first-time buyers to enter the market, ownership at the entry level is becoming increasingly accessible.”

Noting recent global efforts to address the economic crisis, including the coordinated response from the world’s leading economies coming out of the G20 meeting and stimulus package announcements at home and in the United States, as well as what appears to be the beginning of equity market recovery, Soper commented, “These glimmers of economic hope are coinciding with a time of year that typically brings renewed interest in the housing market. Traditional spring trends – increases in open house attendance, calls to brokers and viewing appointments – tell us that potential buyers are stepping off the sidelines and an increase in purchase activity is likely to follow.”

Royal LePage’s quarterly House Price Survey shows the following annual change of prices for key housing segments in select national markets. Please click on the link below to open the House Price Survey.

Royal LePage Quarterly House Price Survey April 2009.pdf

In Victoria between January – March 2009 the average price of a Detached Bungalow was $453,000. (3.2% change from 2008)

A standard two-storey home during the first quarter of 2009 was $435,000. (-5.4% from 2008 year’s first quarter)

A standard condominium was priced at $260,000. (-11.6% from 2008 first quarter)

Reported by Moishe Alexander, CFC CEO

With more buyers and fewer homes for sale in recent months, the Greater Vancouver housing market has entered a more moderate and balanced state.

For the sixth consecutive month, new listings for detached, attached and apartment properties declined in Greater Vancou- ver, down 33.7 per cent to 4,649 in April 2009 compared to April 2008, when 7,010 new units were listed. The total number of property listings on the Multiple Listing Service® (MLS®), while slightly down compared to last month, remains unchanged compared to the same period in 2008.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver totalled 2,963 in April 2009, a decline of eight per cent from the 3,218 sales recorded in April 2008, and an increase of 31 per cent compared to last month. “We’re seeing greater balance in the housing market, as evidenced by a strong sales to active listings ratio of over 19 per cent,” Scott Russell, REBGV president said. “The result is a relatively stable market in which homes are being realistically priced.”

“The bridge between buyer demand and housing supply is continuing to narrow, which, as we see, helps bring stability to home prices,” he said. “The trends in our housing market over the last couple of months offer a much more comfortable, historically normal set of conditions”.

Sales of detached properties declined eight per cent to 1,190 from the 1,293 detached sales recorded during the same period in 2008. The benchmark price, as calculated by the MLSLink Housing Price Index®, for detached properties declined 12.2 per cent from April 2008 to $675,268.

Sales of apartment properties in April 2009 declined 10.5 per cent to 1,179, compared to 1,317 sales in April 2008. The benchmark price of an apartment property declined 12.6 per cent from April 2008 to $340,203.

Attached property sales in April 2009 are down 2.3 per cent to 594, compared with the 608 sales in April 2008. The bench- mark price of an attached unit decreased 9.7 per cent between April 2008 and 2009 to $431,759.
METRO VANCOUVER BENCHMARK

The Vancouver Real Estate Board publishes a benchmark that tracks the price of a benchmark property across the region. There are three categories:

* Detached

These are houses, sometimes called single family homes
* Attached

This refers to townhouses and half duplexes.
* Apartments

This means apartments within high or low rise buildings.

I have set out the benchmark prices across the region, with the annual percentage price rises in brackets and 3 year percentage rise in square brackets.

The top percentage price rise over the year is shown in bold.

The story is still of price drops pretty much across the board, which is no surprise. In homes (detached) West Vancouver did the worst and Pitt Meadows did the best – even edging into positive territory.

In attached properties (townhouses), South Delta did best, with Port Moody bringing up the rear.

And in apartments, where over-supply is most in evidence, prices continue to fall and not much honour is found in being the best (Port Moody) versus the worst (Coquitlam).

The increase in sales volumes that we have seen over the last month is a sure sign that buyers are taking advantage of these falling prices and the record low mortgage rates are an added incentive.
DETACHED BENCHMARK PRICES

* Detached Greater Vancouver $675,268 (-12.5%), [3yr: 8.7%]
* Burnaby $670,637 (-12.9%), [3yr: 6.2%]
* Coquitlam $590,718 (-11.2%), [3yr: 10.2%]
* South Delta $603,815 (-11.7%), [3yr: 9.8%]
* Maple Ridge $407,401 (-11.9%), [3yr: 5.8%]
* New Westminster $537,714 (-8.7%), [3yr: 8.8%]
* North Vancouver $782,388 (-14.3%), [3yr: 6.7%]
* Pitt Meadows $520,244 (8.2%), [3yr: 31.3%]
* Port Coquitlam $499,094 (-9.2%), [3yr: 10.9%]
* Port Moody $779,571 (-4.2%), [3yr: 46.2%]
* Richmond $682,124 (-11.4%), [3yr: 11%]
* Squamish $514,325 (-13.1%), [3yr: 24.7%]
* Sunshine Coast $434,597 (1.4%), [3yr: 16.4%]
* Vancouver East $608,174 (-12.1%), [3yr: 5.6%]
* Vancouver West $1,237,674 (-14.4%), [3yr: 11%]
* West Vancouver $1,126,620 (-29.2%), [3yr: -6.1%]

ATTACHED BENCHMARK PRICES

* Attached Greater Vancouver $431,759 (-9.7%), [3yr: 13.6%]
* Burnaby $425,994 (-7.5%), [3yr: 12.6%]
* Coquitlam $380,312 (-11%), [3yr: 9%]
* South Delta $450,297 (-3.8%), [3yr: 26.9%]
* Maple Ridge & Pitt Meadows $292,721 (-8.6%), [3yr: 14.6%]
* North Vancouver $529,314 (-12.2%), [3yr: 10.3%]
* Port Coquitlam $365,907 (-9.5%), [3yr: 7.7%]
* Port Moody $359,421 (-13.5%), [3yr: 11.5%]
* Richmond $429,472 (-8.1%), [3yr: 13.1%]
* Vancouver East $477,690 (-10%), [3yr: 18.5%]
* Vancouver West $641,206 (-12.2%), [3yr: 18.9%]

APARTMENT BENCHMARK PRICES

* Apartment Greater Vancouver $340,203 (-12.6%), [3yr: 9.9%]
* Burnaby $307,761 (-11.7%), [3yr: 12.5%]
* Coquitlam $253,532 (-15.6%), [3yr: 7.4%]
* South Delta $317,317 (-12.9%), [3yr: 16.4%]
* Maple Ridge & Pitt Meadows $231,435 (-12.5%), [3yr: 18.4%]
* New Westminster $267,428 (-11%), [3yr: 12%]
* North Vancouver $339,761 (-13.3%), [3yr: 5.5%]
* Port Coquitlam $225,927 (-13.3%), [3yr: 11.7%]
* Port Moody $278,878 (-10.7%), [3yr: 6.6%]
* Richmond $285,925 (-11.4%), [3yr: 10.3%]
* Vancouver East $294,674 (-11.1%), [3yr: 14.2%]
* Vancouver West $430,318 (-12.9%), [3yr: 8.6%]
* West Vancouver $554,780 (-17.6%), [3yr: 2.6%]

http://sue604.com/2009/05/real-estate-statistics-for-april-2009/

According to Canadian Funding Corp (CFC) following a 22-year high in 2008, CMHC is forecasting a 28.5 per cent reduction in single-detached starts this year. Regina will see 700 single-detached starts in 2009, down from 979 in 2008. Forecast starts activity in 2009 will fall back to 572 single-detached starts. In 2010, single activity will see an uptick, reaching 750 units by year-end. Economic growth and migration are seeing moderation in 2009, leading to builders scaling back on new housing starts and addressing a growing inventory of single units.

This adjustment is already taking place in Regina. To the end of March, single starts were 40.6 per cent lower than the end of the first quarter of 2008.

The supply of single units in Regina is slowly trending down since peaking at 963 units last November. Notwithstanding this recent reversal, supply remains higher than at this time in 2008. At the end of March, the sum of single-detached units under construction and complete and unabsorbed was up 25 per cent over the first quarter figure in 2008, having reached more than 900 units. Supply had been increasing on a year-over-year basis since March of 2004 but we expect the recent downward trend to continue as units reach completion.

Most of the single-detached supply is in the form of units that are under construction. The number of single units under construction peaked in November at 929 units. By the end of the first quarter there had been a reduction in the number of single dwellings at various stages of construction but this number remains more than 23 per cent higher than the end of the first quarter in 2008.

The number of complete and unoccupied units has more than doubled since March 2008 and is now at more than 40 units. There have been increases, on a year-over-year basis, in the number of complete and unoccupied singles since April 2008.

Given current absorption rates of approximately 60 units monthly, the supply of ownership (largely single-detached) units had surpassed 15 months. The months of supply figure has been trending down since December 2008 due to reducing supply stemming from falling starts. The peak occurred in November at more than 16 months of supply.

Starts in bedroom communities decelerate but retain share

Single starts in Regina’s bedroom communities fell off 43 per cent in the first quarter. So far this year, these communities have captured 25.6 per cent of total single starts. This is close to the 2008 first quarter share of 27 per cent. Over the last five years, bedroom communities have seen an average of 21 per cent of single starts fall within their boundaries.

New House Price Index

The New House Price Index (NHPI) measures the change in price for a new home, while keeping the specifications of each home constant over two consecutive periods. To the end of February, Statistics Canada’s New House Price Index (NHPI) in Regina increased by 15 per cent compared to same time last year. Year-over-year growth has been lessening since peaking in the second quarter of 2008 and we expect the increase in the NHPI will be 4.8 per cent in 2009 and 2.7 per cent in 2010.

Mortgage rates

Mortgage rates are expected to be relatively stable throughout 2009, remaining within 25-75 basis points of their current levels. Posted mortgage rates will increase very gradually during the course of 2010, reflecting a rise in government of Canada bond yields. For 2010, the one year posted mortgage rate will be in the 4.75-6.00 per cent range, while three and five year posted mortgage rates are forecast to be in the 5.00-6.75 per cent range.

The main campus of Simon Fraser University (SFU) is nestled in the woodlands of Burnaby Mountain and surrounded by the municipalities of the Greater Vancouver area. This area also boasts Canada’s highest housing costs, which many of the SFU faculty and staff cannot afford.
Those with children face the additional challenge of choosing between child-friendly neighbourhoods and manageable commutes. The SFU Community Trust recognized that these challenges were a barrier to attracting and retaining faculty and staff and saw the potential of using its existing on-campus residential area, UniverCity, to showcase green technologies for sustainable living. The Trust put out a request for proposals to develop a new UniverCity project, selecting Vancity Enterprises (VCE) as the developer. In turn, VCE hired reSource Rethinking Building, which specializes in sustainable strategies, as co-development manager.
Working in partnership, these three organizations used several strategies to make the new development affordable. The Trust provided the 99-year ground lease to VCE at half the market value, provided space for the sales centre, and delayed payment for the land until after construction, saving on interest costs.
VCE reduced its profit and development management fees, performed marketing in-house at reduced cost, and negotiated a reduction in parking spaces, recognizing that many residents would not need cars. Two parking spaces were designated for co-op use, with the Cooperative Auto Network locating cars at Verdant. These savings were passed along to purchasers, making the homes available at 20 per cent below market value; a resale control agreement created by VCE guarantees that future resales will also be at 20 per cent below market, ensuring long-term affordability.
Verdant is also environmentally sustainable; reSource demonstrated that Verdant could attain LEED Silver certification by increasing costs by only 1.5 per cent—and that still greater energy efficiency could be achieved by using geothermal heating. This would be expensive—so reSource and Vancity Capital Corp. developed a financing arrangement so that owners use their monthly energy savings to pay for a second, 25-year mortgage on the geothermal installation— providing long-term energy security and enormous savings after the mortgage is paid. The overall design reduces Verdant’s electricity and natural gas consumption by 66 per cent.
The result, says Moishe Alexander, is great: Verdant opened in April 2007 as a 60-unit strata condominium townhouse community that promotes a broader mix of housing for families; grouped around a central courtyard that also serves as a play area, Verdant is kid-friendly—as are the durable and washable materials featured in the homes themselves. Perhaps most interesting to the development industry, however, is the fact that Verdant’s affordability did not depend on government subsidies. The SFU Community Trust has used Verdant as a showcase to developers, while VCE has made its Resale Control Agreement available free of charge to municipalities and other developers; BC Housing has agreed to use this agreement as a blueprint for similar developments.

At 2.5 million people, Toronto is Canada’s largest city, home to a diversity of neighbourhoods and community interests and until recently, a homelessness challenge with the size and complexity to match.
In February 2005, Toronto City Council made a commitment to end street homelessness by approving a number of recommendations, realigning funding and changing the way the City worked with the many non-profit homeless service providers. The core component was the Streets to Homes (S2H) program, which embodied a unified approach and a “housing first” philosophy—meaning that housing should be available without prerequisites such as going through a shelter or a treatment centre.
S2H’s unique approach includes intensive case management across more than 30 partner agencies. The program has developed relationships with large property management firms to identify vacant units and agree to rent them at a reduced rate. This provides landlords with a steadier stream of income, while decreasing their administration, marketing and maintenance costs. Because Social Services pays S2H client rents directly to the landlords, the rent payments are more reliable than from some tenants, thus lowering administration costs. Also, units are scattered throughout the city so residents are not concentrated in any one area. Altogether, 69 per cent of S2H clients are in private market accommodations, most without government subsidies. A key aspect of the program is that clients choose where to live.
Meanwhile, providing clients with housing gives them improved quality of life, decreased dependence on emergency services and better access to social services and community non-profit organizations— whose important role is reinforced rather than replaced by S2H. By partnering with community organizations, S2H builds on their individual strengths, local knowledge and innovation.
Some examples: a mobile multi-disciplinary street outreach team, which includes a psychiatrist, nurse, housing worker and other experts, conducts street-level assessments of individuals; a community agency provides vocational assessments and pre-employment projects; a social-purpose enterprise offers furnishings to help new S2H clients make their apartments look and feel like home; 15 non-profit organizations provide follow-up support to all clients once they are in housing; one non-profit organization specializes in outreach to homeless Aboriginal people.
Since its start in February 2005, notes Jan Luistermans, S2H has helped more than 2,100 people to find housing. The numbers continue to grow as more partners and more landlords come on board. The program is catching on in other Canadian and international communities as well. S2H has helped more than 100 other jurisdictions understand or replicate its innovative approaches. Ultimately, S2H has grown because it’s working: research among S2H clients indicate that almost 90 per cent of housed clients remain housed, with access to the resources they need on the road to independence.

Low-income families in Ottawa have few options for purchasing houses: down-payments can be a barrier even if their incomes are stable, and high housing prices are driving people farther from the core, increasing the burden on transportation systems.
Somerset Gardens, an attractive, 11-storey, 119-unit condominium is proof that a development can be 100 per cent affordable in Ottawa’s sought-after downtown neighbourhood, without any ongoing government subsidies—and it’s the result of collaboration among some very different players, notes Martin Lapedus.
Teron Inc. is a private developer that created a subsidiary (Somerset Gardens) dedicated to affordable housing. Teron reduced the selling price to 20 per cent below market and all units are affordable to people within the 40th income percentile. Through an agreement with the City of Ottawa, Teron set up an Assisted Home Ownership Program (AHOP), under which the City and Teron deferred the payment of a total of $11,315 per unit. For purchasers to qualify, they must be within the 40th income percentile and live in the unit. Interest accrues while they own the unit, but is deferred until they sell. If they sell to another qualifying purchaser, the deferral can continue; 42 purchasers have taken advantage of the program. CMHC recognizes this deferral as the down payment and therefore Teron requires the purchasers to contribute only one per cent towards the down payment.
Multifaith Housing Initiative (MHI) is a charitable organization created in 2002. Its members come from Christian, Jewish, Muslim, Hindu, Sikh and Unitarian faith communities. One of its members, St. John’s Anglican Church, sold its parking lot as land for the building of Somerset Gardens.
Action Ottawa, the City’s affordable housing program, provided MHI with a grant towards purchasing 10 of the units, requiring at least six to be rented to people on the city’s Below Market Rent (BMR) Housing Registry. MHI also received funds through the Canada-Ontario Affordable Housing Program Agreement, and was able to leverage more than $200,000 in loans and donations from faith communities and individuals—all of which contributed to creating six affordable rental units at $460 per month. Four units are rented at $793, well below the true market value. Members of St. John’s Anglican Church purchased four additional units that are being rented at subsidized rents—creating several levels of affordability in the same building.
With balconies, lots of natural light, barrier-free mobility throughout, and a rooftop garden managed by a residents’ club, Somerset Gardens blends with the neighbourhood and creates a mix of all ages and family types. While it features only 23 parking spaces for 119 units, it is close enough to the downtown core that most residents do not need a car.