Options for Homes – Making Home Ownership a Reality – October 2005 – published in New Dreamhomes and Condominiums Magazine
Bring a community together from the ground up and give them what they need to own a home seems to sum up the Options for Homes belief system.
When President Mike Labbé, started the non-profit corporation he figured the best way to mobilize prospective buyers, would be by getting them to literally build their own condominiums.
“Really we’re providing our expertise for the buyers to build their own homes,” says Labbé. “They [the owners] hire the contractors, they hire the lawyers, and they hire all of the pieces they need to build a condominium for themselves. As a result they get it at cost. And we put in different things to protect against flipping and stuff – but that’s the gist of what Options does. It pulls people together to build their own homes.”
As Labbé said earlier, essentially people acquire the home at the cost price. The difference between the cost price, and the market value is then added in the guise of a second mortgage that will contribute to the individual’s down payment, usually about half of the down payment goes to the Canadian Mortgage and Housing Corporation (CMHC) when people want to sell.
As long as they stay in the home they don’t have to give that money back to Options. It’s an incentive for owners to stay there as long as possible.
“So there are a very small number of investors that come along,” says Labbé.
Labbé says Options does not prevent resale because then there’s no advantage to purchasing. You can buy and sell any time you want. But when you sell, you pay back that differential.
Weston Village was the first project. Options for Homes had three condominium sites under construction. One at the Distillery District, one at 650 Lawrence Ave, two in Pickering and one in Scarborough, near Eglinton and Markham. The one at Markham and Eglinton was completed by the spring of 2006. Another project near Markham Road was scheduled to begin in the fall of 2005. Options goal would be to construct three to four projects a year, and this model is one that has spread to Montreal and Waterloo.
Where Options manages to keep costs down, is in not offering any facilities or amenities. Most of their condos might have a meeting room with a kitchen that could hypothetically allow owners to meet and mingle, but that’s about it.
“We don’t put pool and sauna rooms in normally,” says Labbé. “The only exception to that was in Pickering where the amenities were already built, they were already there. Normally we don’t do this because it reduces the caring maintenance costs and reduces the capital costs.”
Just because Options lack amenities doesn’t mean there are no condominium fees, fees do exist, but are usually five cents less, a square foot than the general market. Labbé says the condos are about $300 to $500 less a square foot than a regular condominium.
“We can reach people that have $10,000 to $15,000 less in income than the regular condo owner. You still need to have a good income. You still need good credit. You still need to qualify for a mortgage in all cases. By starting a lot lower, we can get a reasonable two-bedroom into people’s hands for $1,100 a month – which is about what it costs to rent. And that’s where we’ve done really well, getting homes to people who otherwise couldn’t have owned homes at all,” says Labbé.
Sometimes Options can help people with $40,000 of their down payment says Labbé. That allows a lower income group to get a mortgage.
“We have people much more varied in income,” Labbé said.
The way they do their marketing, usually 40 to 50 people come out to an information meeting. After that they put down a non-refundable $100 deposit.
“Special thing is that dreams people have to get rich enough to buy a piece of land to build their own home they can help make reality. Create a community participatory community, energy conservation, creation own home,” says Labbé.
Options for Homes marketing plans are low-key. I once saw a poster on the subway, and they have a website at www.optionsforhomes.ca, but outside of that, if you’ve heard about them before someone you know may have told you.
“A lot of their marketing is word of mouth,” says Dee Gibney, narrator of promotional video.
One Options for Homes owner expresses how she feels about home ownership in the promotional video.
“I feel very wealthy” Nona Segal, an Options for Homes Owner.
Options have support from the Ontario government.
“This is a win-win-win for the government housing options of this province,” said Minister of Public Infrastructure Renewal, David Caplan.
Canada Mortgage & Housing Corporation’s Manager of the GTA, Mark Salerno says Options for Homes was given a Housing award in 2002 that is granted every two years.
The promotional video also shows how Options has support from writers like June Callwood.
“I think this concept is one that’s going [to] sweep the country,” says Callwood.
You can find out more about Options for Homes from their website, www.optionsforhomes.ca.