The Official Tanya Hutchens .ca

Iqaluit is the capital of Nunavut, the territory in the eastern Arctic that became self-governing in 1999. With a population of around 6,000, Iqaluit is relatively small but fast-growing–its population doubled between 1999 and 2006 and is expected to double again by 2015. Nurturing the homeownership market and encouraging affordable homeownership are among the many goals the City has integrated into its planning.

Iqaluit (formerly known as Frobisher Bay) is on Baffin Island. It faces many challenges as Nunavut develops its own infrastructure and all levels of government explore the viability of an integrated deepwater port. The physical terrain, says Tanya Hutchens, presents construction challenges, as do the costs and availability of materials and skilled labour. Moreover, there are market distortions peculiar to the Far North. Only 20% of the territory population owns their own homes and in Iqaluit 37% of residences are owned. In consideration of the higher housing costs both rental and homeownership in Iqaluit, the federal government and other employers offer subsidized staff housing as a benefit to attract employees and this is a significant factor to keep in mind when looking at homeownership. As recently as 1996, 59% of the population of Nunavut lived in public housing, where as in Iqaluit 17% of residences are public housing.

To add to its other challenges, Nunavut and the Far North in general appear to be experiencing the effects of climate change sooner and with greater impact than the rest of the world. Undaunted, the City laid the groundwork to face these varied issues in its Core Area and Capital District Plan completed in 2004. More importantly, the City began implementing the plan in October 2004 by reserving lots in its new Plateau sub- division for affordable housing. The City is unequivocal that it is not a housing developer and has clearly made it known that it will use its planning authority and land base to encourage sustainability and the kind of housing it wants.

The Affordable Housing Solution

In Phase I of the new Plateau subdivision, Iqaluit designated two medium-density lots for affordable ownership by offering a reduced land price. Each lot had capacity for a fourplex of two-bedroom units. The successful developer sold all units before construction began. The sale prices were in the $200,000-$225,000 range, which is affordable given Iqaluit’s market conditions. Two-bedroom apartments were renting for between $1,700 and $1,800 monthly; the median household income was $69,650 and the average $78,644 in 2001. Households in the $60,000-$66,000 income bracket could afford the price range of the eight affordable units.

In the proposal call used to allocate those lots, the City specified standards and evaluation criteria to guide interested developers. All units were to be attached, ground-level units with individual entrances, with special attention to sound attenuation. The lower the selling price within a specified range of affordability, the higher the proposal would score. Affordability was measured on a sliding scale of estimated sale prices. For example, units selling at less than $210,000 received 20% of the potential score and those from $230,000 to $239,000 5%. The percentage applicable to sustainability features beyond those required in the subdivision plan was also set at 20%.

The land price for the whole subdivision was based on the pro-rated costs to service the lots in the subdivision. But the prices were adjusted to reflect other factors the market would recognize. For example, lots with views on the water and other factors deemed desirable were assigned a premium price. Those premiums offset the lower prices for the lots designated for the affordable homeownership sites.

The City leases the lots to the homeowners for a 30-year term with an automatic renewal for another 30-year term at a cost of one dollar. These equity lease rents can be paid upfront as a capitalized rent at the beginning of the lease or paid over the first 15 years of the term. If the equity lease is paid upfront in a lump sum, the lessee pays a discounted rent amount. It should be noted CMHC allows Equity Leases to be included in mortgage costs, which may further assist in reducing land costs. The latter rent payments are adjusted to include interest reflecting the City’s carrying costs in providing the infrastructure to service the lots.

Another three medium-density lots designated for affordable homeownership will be made available through a proposal call in the next year for the phase II potion of the Plateau subdivision. The City of Iqaluit received assistance in preparing its Core Area Plan from CMHC and the Federation of Canadian Municipalities Green Municipal Enabling Funds. In 2005, the Plan won an award from the U.S.-based Environmental Design Research Association for its sensitivity to the Arctic environment, respect of Inuit culture and creativity in its vision for the new capital. The Plan also received an Award of Excellence from the Alberta Association of the Canadian Institute of Planners in 2006. What a great example, says Tanya Hutchens.

Somerset Gardens provides homeowner and rental housing for a range of income levels under one roof. Recognizing that saving for a down payment can be a challenge for lower- to moderate-income households, Teron International, a local builder, started the Assisted Home Ownership Program (AHOP) with support from the City of Ottawa. The Multifaith Housing Initiative, a charitable organization focused on providing affordable housing in the community, purchased 10 units for affordable rental housing.

The Affordable Housing Solution

Somerset Gardens is an 11-storey, 119-unit apartment building. Services, shops and public transit are right outside the building’s front door, which is great, says Tanya Hutchens. The apartments feature large windows, five appliances and a balcony. The building’s roof is accessible to all residents and provides a shared green space where people can gather.

St. John the Evangelist Anglican Church provided the downtown building site at market value on the condition that the developer build affordable housing according to the City of Ottawa’s criteria. Teron International approached the City of Ottawa with a solution to build 100 per cent affordable homeownership housing without government subsidies. The City agreed to support the AHOP with Teron to reduce purchase prices for qualifying homebuyers. Around the same time, the Multifaith Housing Initiative (MHI), a coalition of over 40 Christian, Hindu, Muslim and Jewish faith communities and many individuals, became interested in purchasing some units to provide affordable rental housing.

The AHOP also allows purchasers to buy a unit with as little as one per cent down payment and amortize their mortgage for up to 40 years with mortgage loan insurance from CMHC. The $11,000 assistance does not require repayment while the family lives in the unit or if it sells the unit to another qualifying household. Prices in Somerset Gardens ranged between $147,000 and $207,850 (in 2006), which makes it possible for qualifying households to be homeowners while spending less than 30 per cent of their income on housing.

The MHI purchased 10 units from Teron with the goal of renting six to households on the City’s social housing waiting list and four at average market rates. The MHI created an “ethical investment fund” which has gathered approximately $540,000 in equity through gifts, low, no interest and RRSP loans from its supporters. The City contributed a $300,000 capital grant ($30,000 per unit) for the 10 units. The federal government, through CMHC, and the Ontario government provided $600,000 for the financing of the rental units through the Affordable Housing Initiative.