Rent-to-own units in Port Moody at risk as federal housing program halted

The shuttering of a federal housing program has put the affordability component of a Port Moody development in jeopardy.

Out of 190 applicants looking to secure a unit in the rent-to-own program for Marcon’s development on the corner of St. Johns and Albert streets, only one has been able to qualify.

Tim Schmitt, Marcon’s director of development, sent a letter to council on Oct. 22 stating the housing agreement needs to be renegotiated due to discontinuation of the Canadian Mortgage and Housing Corporation’s (CMHC) First Time Home Buyer Incentive Program (FTHBI) in 2024.

“The purchase price of homes in the current market is out of sync with the FTHBI program that was created over five-years ago and not adjusted in accordance with changing market conditions since its inception,” Schmitt stated.

The housing agreement with the city was signed in 2022, and while Marcon stated they still want to continue the rent-to-own program, the terms need to change.

Port Moody council agreed to renegotiate the agreement on Feb. 11, but they were not happy about it.

“I’m just so incredibly disappointed to have learned this,” said Coun. Kyla Knowles. “We need senior levels of government to step up and understand how communities like ours are struggling to provide any housing that may be deemed affordable.”

In order to qualify for one of the 10 units in the rent to own program (the cheapest unit offered costs $630,000), applicants would require a minimum income of $160,000 for a mortgage.

But the FTHBI program, which subsidizes five to 10 percent of the down payment, only allows households to qualify if their income is less than $150,000.

Since the CMHC is no longer updating its thresholds to keep up with inflation and housing prices, the minimum cost of a mortgage and the income limits no longer align, according to Schmitt. 

Marcon’s project is mere months away from taking occupancy, and the developer stated they need to find qualified buyers to fill their units.

“We believe it would be counter to the city’s strategic objectives as well as Marcon’s to have new homes that are sitting vacant,” Schmitt explained.

Marcon proposed the city remove reference to the FTHBI program and establish a higher income threshold, remove any requirement for purchasers to be first-time home buyers, and any unsold units to be put on the strata market after a second round of advertising.

Port Moody council agreed to set a new income limit at $190,000 for one-bedroom units, and $270,000 for two-bedroom units.

However, they stipulated that preference should be given to first time home buyers and local residents, and go through multiple draws before any unsold units are marketed as stratas.

Coun. Amy Lubik said the rent-to-own program was one of the reasons why the previous council approved the application, and the city should still receive an amenity equal to the original housing agreement.

Mayor Meghan Lahti called the situation “unfortunate,” and agreed the program was one of the most attractive parts of the proposal.

“Who would have expected that a federal program would shut down?” she said. “We were pretty confident that this was not a possibility.”