According to the Saskatoon Star Phoenix, “Saskatoon city council’s executive committee approved a new mortgage support program on Tuesday to help low- and moderate-income people get into the housing market.
“Under the program, which will replace the home start affordable housing initiative, people with a household income of $52,000 or less will be given a five per cent downpayment toward a mortgage on a new affordable housing development, if they’re approved.”
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Norm Fisher
Royal LePage Saskatoon Real Estate
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{ 38 comments… read them below or add one }
I’m thinking there are quite a few households below 52k. While I believe in helping those in need, I am thinking there are not many units at 156k or lower ( 3 times income) that are desirable to owning. But they have to start somewhere to help people.
“a five per cent downpayment toward a mortgage on a new affordable housing development, if they’re approved.”
I’d sure like to hear more about this new affordable housing development- does this mean that people don’t get to choose where they live? I guess you’re right, George, it’s gotta start somewhere.
Hey- do you remember back in November or so there was a prognostication f the S&P at around 400? Check this out:
Quite a convincing argument and a collection of very interesting charts. Perhaps that prognostication wasn’t so outalndish after all?
How many affordable housing developments are in-the-works in Saskatoon right now? It essentially sounds like a property tax abatement for 4-5 years, but what’s the criteria for a development to be classified as ‘affordable housing’, and has the city set any upper limits or a cap on the number of developments or applicants each year?
Crikey,
interesting charts indeed. I am kinda wondering if the stock markets are set for another tumble in the near future. A few things: Air Canada is looking for an emergency loan to stave off bankrupcty. Oil seems to be in a another mini bubble. Rail cars are down big time in volume in NA yoy. Household debt is at alarming levels according to BofC. But the biggest cause for concern is that the world’s 8th largest economy is teetering on the edge of bankruptcy. Many of the cities such as Oakland are pondering bankruptcy. How bad it gets with California is anyones guess, but it will have quite the ripple effect. I am and will continue to watch this one.
Kind of hypocritical when the City of Saskatoon over charges so much for lots!
If they cut the high way robbery on lots, maybe some of us new grads could afford a small simple new house. Instead its leave Saskatoon for me. Now who’s fault is that?
Why not charge the same amount for lots as Regina? And increase the number of new serviced lots.
“Canada Mortgage and Housing Corp. will provide more flexible mortgages for the homeowners under the program, including, for instance, longer amortization periods. Saskatchewan Housing Corp. will help by screening applicants to the program, a city report said.”
It’s a well intentioned idea but these sort of things often backfire. Look at the american housing bubble a couple years ago, that was influenced by fannie mae and freddie mac giving out mortgages to all sorts of people who couldn’t ordinarily afford mortgages and pushing the envelope of mortgage terms. All it did was cause housing prices to spike making them even more unaffordable. All of a sudden people who ordinarily could have afforded a house, couldn’t afford them. How fair is that? Then when the market started crashing the people who put down no down payment and hence have the least to lose were the first to walk away.
I am with JR, if you want affordable housing, push the lot price down. It is that simple. It is also far more democratic, as it benefits anyone, of any income level who wants a house. A family with income of say 60k would not qualify for this program but would still be in a tight spot to afford a $250k starter house. If you lower lot prices by 30k that would push house prices across the city down and push the $250k house down to $220k.
If you want to see a place where people are ready and willing to live way beyond there means, California takes the cake.
For people calculating their budgets in preperation of home financing, incedentals are always way underestimated or omited completely, no wonder that Money Mart and others with their payday loans do a booming business.
George,
It is always darkest before the dawn.
Jr,
many bears on here will agree with you. Every major place in Canada jacked up lot pricesin the last few years In Calgary and Edmonton, bigger lots went for over 200k, Not sure about Regina. Mark would know. Until 2005, I know that builders would make on average 30-50k per average new house. Then things went outta whack and it was not wages or cost of materials. I know of two houses, one in Willowgrove and one in Stonebridge. Exact same house and same kind of lot, both are on crescents, one sold Dec 06 for 375k , the other summer of 08 for 565k. And I know these people well.
As for the size of lots, all should be bigger, are they scared of hitting the mountains or James Bay? We have tonnes of room to build. But some of the lots are so skinny, with enough beers I could make it across the full width if I have to go. Hope you stick around.
“I am with JR, if you want affordable housing, push the lot price down. It is that simple.”
Really?
“Affordable housing” is about cooperation between the public sector and the private sector to build stronger communities and pull people out of unfortunate circumstances. Charities, builders and private companies contribute to the development of affordable housing initiatives to expand home ownership and relieve governments from having to bear the whole responsibility. “Pushing the price of lots down” would just shift the entire burden to the tax payer. I’m not suggesting that the price of land shouldn’t be lower. I’m just saying that it would not serve as a replacement for affordable housing initiatives.
George,
Yeah, I’m keeping an eye on the California situation too, and it’s been making me cringe for awhile. Check this out:
Calif. Aid Request Spurned By U.S.
I’m very glad to be where I am, I have to say.
Speaking of where we are…feeling “Saskabratty”? Check out the latest issuance from good ol’ Garth:
Saskabrats
Bring lot prices down (some) might help. But you would be surprised how much of the new lot price is existing and future costs to the city.
IMHO, if someone can’t afford to build on a $85K lot it might not help a whole bunch to build on a $60K lot either. The cost of the home is the big factor. I don’t know if everyone else has noticed, or just me, but we don’t build affordable housing. We get big loans and build houses with 2.5 baths, walk-in closets, 3 bedrooms, custom kitchens, 9 foot basements and double garages.
Want affordable housing? Buy a smaller lots for $85K and then build a small 1930’s style 500-700 sq.ft. bungalow. Do most of the work yourself or with help of family and your input costs shouldn’t exceed $200K. Probably not even exceed $160K.
Norm, “‘Pushing the price of lots down’ would just shift the entire burden to the tax payer.” True. But doesn’t the city’s latest proposal essentially do the same thing?
“The money will be paid back to the city through property taxes over four or five years or until the grant is fully repaid. Instead of going into the city’s revenue, the taxes will go toward repaying the grant.”
And it must be a strange week indeed when I find myself agreeing with L.oki… the major component in lot pricing is current and future servicing, although I can’t help but wonder why both housing prices and the cost of construction has dropped, yet we haven’t seen any reduction in lot prices? I agree that smaller lots (and houses) are the way to go, but I’m not sure that the conventional thinking has evolved to the point where we’re adopting European ideas, ie: 900sft homes, really small yards, single garage (or parking stall), combined living/family room, no separate “media room”, smaller more compact kitchens, on-demand hot water heating (boiler; no furnace or forced air systems), etc.
Norm, really like the new preview/Captcha system! Kudos!
Thanks Jason. Appreciated the suggestion on the preview button which would have completely gotten by me. As it was a bit of an after thought, the excellent web guy I found threw it in for free.
“‘Pushing the price of lots down’ would just shift the entire burden to the tax payer.” True. But doesn’t the city’s latest proposal essentially do the same thing?
No. “Qualifying” projects will have been developed with other commitments having been made, potentially both public and private.
Norm, you’re more than welcome (happy to hear you found a good web guy). The “live” aspect of the preview feature was an unexpected bonus!
Norm, or anybody else,
this is totally off topic but I am wondering about cabins and lake property. I would like to have something at the lake in a few years. I see quite a few lake lots for sale, is there much demand for that or are most people buying property with a cabin . I am in no rush to buy anything and I am not worried about being priced out forever. Just curious and doing my homework for down the road. Maybe some people have experiences, good or bad about lake property and what a person should be looking for. Thanks
Hey George,
I’m clueless about recreational property though a guy in my office says he couldn’t sell a cottage to save his life. I’ve got to think that loans have nearly dried up on cottages, wouldn’t you think?
Here’s a report from Remax released June 3.
Ironically, it actually contains the “priced out of the market” line.
Here’s the SP coverage that sounds a tad different.
Royal LePage puts out a recreational property report around this time of the year. If I catch wind of that I’ll see that it’s brought to your attention.
Wow Norm, I think you’re putting words into my mouth. All I am saying is that I don’t believe in select group of people being targeted for government sponsored programs. If industry or local charities want to do something then FINE, that is great. People could definitely use the help. I just don’t like when the government starts doling out money to buy votes.
If the city had released more lots and for lower prices a couple of years ago they could have flooded the market, we would have more houses for sale and hence lower prices today. It sounds bad, but what better way to make housing affordable than to make it readily available? Let the market decide how many houses to build.
Peter,
How an I putting words in your mouth?
I quoted you, said “really?” and then expressed my view on affordable housing. I ascribed nothing to you outside of your quote and I respect your right to an opinion.
Norm,
thanks. I did not think some of the properties would be so expensive. I might be better off buying a piece of land and moving something (RTM) or building myself. No rush, I have a pretty good time as long as I get my ducks in a row.
Peter,
Child tax benefit
Social assistance
EI
Age amount
special scholarships and employment opportunities for first nations only/preferred
hiring quotas where equally qualified women and minorities are preferred
New home buyer’s plan
Graduate tax credit
Renovation tax credit
Dependents deduction
And I know the list goes on, and on, and on… (almost) everyone gets some sort of special treatment, at least at some point in their lives. Some people probably even deserve it. Personally, I just think it makes my tax return way too complicated. If this mortgage assistance program provides someone with motivation to get and keep a job, and to take pride in a property they own, rather than rent, them I’m for it. If it helps someone get their life and that of their family moving in a better direction, I’d rather take on a slightly larger share of the property tax for this program than to pay out for EI, social assistance, and all the costs associated with criminal activity. But I sure hope it’s not just going to be another handout that feeds a culture of entitlement.
Perhaps I’m looking at this particular program incorrectly, but I see it as an opportunity to help some people out, and create additional tax revenues for the city over the long run. It’s a bit of an investment in the future. Why give a five-year tax abatement on the King George condos? So we can supplement the lifestyles of people who can afford a condo at, or above $500K? No. We could let it sit there empty until it literally falls apart, generating a tax bill that will never be paid, or we can watch it be turned into something beautiful and functional that will generate tax revenues years into the future.
George,
Speak of the devil. This Recreational Property Report just came out this morning. I find it light on substance but thought I should follow up.
Canada avoids deflation in May
http://www.canada.com/Business/Canada+inflation+rate+edges/1708584/story.html
wonder where all the people who are supposed to move here are going to work, not a lot of good jobs hiring, especially not engineering, Cameco is down sizing? how are people going to pay for such expensive housing when there are no good jobs out there?
“how are people going to pay for such expensive housing when there are no good jobs out there?”
Last I heard, Sask had the lowest unemployment rate in the country, and houses are cheaper here than most provinces.
“Last I heard, Sask had the lowest unemployment rate in the country, and houses are cheaper here than most provinces.”
Low unemployment because of the amount of mcjobs available. Can’t afford an outdated $300,000 bungalow on $10/hour. And chaep housing? Provincially maybe, but not in Saskatoon.
Jon and Gramps,
It would be great if you guys could pick a handle and stick with it. Makes it a little confusing for everyone but me, and I guess you, to know who is saying what.
McDonalds must be paying well to have moved Saskatchewan to one of the highest income earning provinces over the past few years.
I did a search on saskjobs.ca yesterday using “Saskatoon” and the key word “engineer.” It delivered 37 job offerings.
That’s not to say that your basic argument that prices are too high is wrong.
Nah, we’re different people.
And I just did a search on saskjobs.ca using “Saskatoon” & “Engineer” and got 10 jobs back. Only two of which were for engineers.
I don’t disagree that there are some high paying jobs here. I just wanted to point out that low unemployment does not mean the jobs available are good ones.
Gramps,
Now I’ve got you all confused too.
I realize that you and Jon are different people. I meant to say that you and Jon are both contributing under more than one name.
“I don’t disagree that there are some high paying jobs here. I just wanted to point out that low unemployment does not mean the jobs available are good ones.”
Ah, thanks for the clarification.
This search on saskjobs.ca using “saskatoon and area” and “engineer” produces 32 results, and I’ll admit that I have no idea how many are actually for engineers, but if I were an engineer looking for work this would strike me as a good place to start.
Retail sales take unexpected plunge in April
http://www.canada.com/Business/Retail+sales+take+unexpected+plunge+April/1712919/story.html
Jobless rate in quarter of U.S. states hits double digits
http://www.financialpost.com/news-sectors/story.html?id=1713428
Currency intervention ‘an option’: BoC’s Carney
http://www.financialpost.com/news-sectors/story.html?id=1709488
Thanks for the links, Jason. I saw this a couple of days ago, and thought it was interesting:
Alberta May Borrow as Much as C$5 Billion, Minister Evans Says
http://tinyurl.com/l8g44l
Crikey, ditto. Interesting that they attribute the move to borrow to declining tax revenues – something that’s been largely responsible for the majority of revenue shortfalls for most states in the US (particularly in California).
Well, to get back to the inflation/deflation debate, have a look at the latest inflation numbers.
http://www.globaltv.com/globaltv/national/Canada+inflation+rate+edges/1708584/story.html
Basically there was a .7 increase from April and flat year over year. Not bad in my opinion considering the worst recession/depression in 80 years, 40%+ loss on the stock market, unemployment over 8%, etc. If that doesn’t knock the wind out of prices, I don’t know what will.
Seriously, Peter, why do you think these numbers weren’t much worse?
We have seen massive amounts added to the money supplies worldwide, along with quantitative easing; this is certainly mitigating the effects of deflation. The current absurdly low cost of credit has had a massive effect, not to mention the fact that banks are attempting to hide an avalanche of deflationary data by not marking their books to market.
As both the cost of fuel and credit has crept up, I’ll be interested to see how the numbers shake out in the next few months.
I think you speak my point for me Crikey. The government stimulus is just starting to take effect and if they were able stop deflation during the financial nightmare over the past year then this should translate into inflation going forward. They are not pulling back on the stimulus in any way, only increasing it. The US government is even taking steps to keep interest rates lower by purchasing treasuries and MBS. Canadian government is talking about stepping in to debase our currency.
Peter, yes, inflation for everything else except housing – which has already experienced hyperinflation – and where affordability will continue to be an issue (particularly with rising interest rates).
You know, I was reminiscing with an old roommate of mine about what life was like on minimum wage back in school. (This was only 7 years ago). Back then, I got a job making $10/hour and I felt rich. I mean, that was practically double minimum wage. It dawned on me that things haven’t really changed all that much for people at the bottom. At $5.25/hour, a $120K house is still just about as far out of reach as a $240K house at $9.25/hr. Bottom line is that being at the bottom sucks.
To George, I sure hope you’re right about the stock market crashing again. I hope it happens in the fall again, when it’s time to sell calves. Coming from an agricultural background, a high dollar is death knell.