patching the ballon

The affordability gap is caused by the speculative bubble we have been in.

0% down mortgages help to cause bubbles, they do not help to deflate them.

"If a Springboard homeowner

"If a Springboard homeowner misses even a single payment, VanCity will begin foreclosure proceedings."
I'm sorry? That seems like an awefully big detail to gloss over. Especially with a period of high unemployment likely to hit us, I'm not sure I could feel safe with a mortgage that could blow up.

Why buy when you can rent?

"For Springboard customers, we're offering to take the money they've been paying in rent, add 25 per cent to it, and call that a mortgage payment,"

Offering to put renters into long term debt, in a falling market, with a 25 percent increase in payments does not sound like affordable housing to me.

Why buy in this market?

The Vancouver market is so overpriced right now that I wouldn't advise anyone to buy anything here. I'd hold off buying, or to invest my money in something more stable than the condo bubble....like, oh, maybe pork bellies?

Plus, why on earth would you encourage people to "stretch to the maximum", or suggest that "aggressive financing" which puts people in a poor financial position should close the gap? To me that flies in the face of financial common sense. If you can't afford payments and risk foreclosure on one missed payment, you need to look at other options, including renting or co-housing, that leave you a decent income to live on.

This story paints VanCity as a savior of the poor and downtrodden unhoused, but in reality they're just exploiting people who can't see any other options. They're no better than loan sharks.

affordable

Just drive through some of these affordable housing projects you will see people who do not need to be there. The requirements apparently do not reflect the actual needs of many people and I believe that is why there are so many people living on the street. Street people don't fulfill the requirements and many people use the system questionably.I suppose it it really the responsibility of the bureaucrats who "assign" these dwellings. Many of these homes are richly appointed with two new cars in the driveway. In some cases I don't believe this reflects a need for social housing. Perhaps some of these people should be forced out to make way for those truly in need. Don't take my word for it check it out for yourself.

But we thought that ...

Back in October The Tyee published a piece by Ellen Gould that pilloried the Harper government for virtually identical practices. Many regular Tyee posters were only too happy the join in the sing along that Harper and Flaherty are nasty and super-bad, yeah, yeah, yeah.

Expect these posters to be silent now.

Something about this series bothers me

Something about this series bothers me. Is this series about affordable housing, or is it about selling mortgages.

Is it really beneficial to purchase a condo with a 100 percent interest only loan that will likely never be paid off while spending 25 percent more on housing costs over renting. What if the strata requires repairs, and the unit holders are hit with a $ 100,000.00 per unit special repair bill.

What benefit is to the homeowner, when the market value of their highly leveraged purchase is worth only half or a third of its purchase price two years from now.

A renter that makes a bad decision can get out of their problem with a months notice. Mortgage holders may suffer from a bad decision for decades.

What about the investment value of home ownership.

"For Springboard customers, we're offering to take the money they've been paying in rent, add 25 per cent to it, and call that a mortgage payment,"

It sounds to me that the return on investment by renting instead of buying is 25 percent. Ask nearly any stock market investor these days if they would like to make a 25 percent return without purchasing a mortgage or hiring a home inspector, without closing costs, or reality fees, or tranfer taxes.

Is Monty trying to help low income people?

I wonder.

Sorry Monte about spelling your name wrong

Sorry Monte about spelling your name wrong above.

?!

"Instead of paying a fixed monthly rent, residents of most non-profit housing make rent payments equal to one-third of their income. (that's a lot!) This enables many working poor people to slowly improve their lot in life,(like over the course of... the next 400 yrs??) rather than remain trapped in a cycle of perpetual poverty... Their circumstances improve. They have good jobs. (that fall from the sky one bright and sunny morning) And that 30 per cent has jumped to $1,200 or $1,500 a month," Geller said."

What PLANET is Geller on to think that someone who is in non-profit housing to begin with is EVER going to see their income rise that much?? 30% of $1500?? Now they're making $4500 a month? $54K a year? Maybe 1 in 10000 people... haha.

I worded that last

I worded that last percentage part wrong... you know what I mean.

Not much of an idea

I don't want the money I have in the credit union loaned out at low interest rates for higher risk mortgages. I could not afford $1200 a month payments, and I cannot afford to put my savings at risk. Social housing is a bandaid solution that keeps housing unaffordable for everyone else. The real estate markets must be allowed to correct and fall to 2-3 times average annual income. If CMHC, the banks and credit unions, insurance companies, governments and real estate boards are allowed to continue the status quo that protects their interests, affordable housing will never come to pass until the market has collapsed, which is the most likely outcome.

Repairs?

It's already been said, but what if the Springboarders need to pay a special levy? Not only could they be forced to sell (because they won't have savings), but they could lose a huge amount of equity as well.

http://www.cbc.ca/canada/british-columbia/story/2009/02/23/bc-condonightmare.html

Social housing

To Fii -- I have to say I've known a lot of fairly well-off professionals who have lived in co-op housing for a few years and saved money to get their down-payment. Some of these folks even have cabins on Saltspring!
As for me, I'm one of the lucky ones, a "senior" who pays 1/3 of my income, which is about to plunge when I retire, each month to a non-profit housing group, bless their hearts. They want to see my tax return every year, by the way, and my monthly payments are based on my gross income.

Stigma

There is an underlying assumption in this series that non profit housing is somehow not as desirable as home "ownership".

This is a major underlying value that middle class society has, and it is a major flaw in middle class values.

My wife and I are young middle income earners. We want to live in the city. We believe in higher density, multi family living because it makes sense environmentally and economically.

However, you would never catch me buying a condo or apartment for my residence. That is for the simple reason that it is stupid. Multi family dwellings are most effeciently administered in a non profit coop scheme where residents manage the property themselves. Condo and apartment ownership would put me on the hook for private management fees and put me on the hook for building defecencies. Since I work in construction, I have absolutely zero faith in the residential construction industry to construct buildings that will last, without significant structural defeciencies, for my adult life.

If you have ever taken the time to view a REIT's annual report, you will notice that buildings are treated as depreciating assets. Essentially, condos are like cars, and minus speculative hallucinations like those we witnessed over the last 6 years or so, actually cost you money and depreciate over time.

Therefore, it makes the most sense to collectively own multi familly developments, self manage them, and collectively absorb the deprecitation and maintenance costs. Additionally, with a strong founding membership with long term perspective, buildings can be constructed for quality instead of profit.

Therefore, we need to cast aside this notion of home ownership, and realize we all have a common interest in providing ourselves quality affordable NON PROFIT housing. Only by removing the profit motive can we ensure that all income levels are provided with quality housing in developments that are assets to the community.

Garbage is as garbage does

Exactly Tbarnston. The profit motive has resulted in a construction boom in Vancouver of garbage real estate.

Developers have cut quality corners at every opportunity to maximize their profits. The number of problems from the corners cut are legion in every downtown apartment I have lived in.

I also know numerous people at all levels of development, from trades to architects to developers, and they all, ALL are unanimous in the declaring the garbage quality of Vancouver real estate. To give just one example, a pair of guys I know who put together rebar for reinforced concrete in apartment buildings firmly believe that even a relatively minor earthquake in Vancouver will make a number of downtown apartment buildings unsafe to live in. Their opinions are based on the poor quality of materials developers and contractors provide to squeeze out every nickel and dime of profit.

It is utterly irresponsible to consider long term ownership of real estate in this city, unless you have absolutely no doubt about the build quality of the residence, especially of anything of relatively recent construction.