‘Unicorn’ opens doors of housing market
Middle-income earners offered affordable home ownership opportunities
Yanni Thepanya and Remo Lass scarcely dared to dream of becoming homeowners in Toronto’s pricey real estate market.
But there they were in November choosing the finishes and fittings — laminate flooring, quartz countertops and a French door for the den — for the condo they are buying in the Humber, a new building under construction at Weston Road and Lawrence Avenue.
Married for seven years, Thepanya and Lass were initially so focused on paying off student loans and establishing themselves in their jobs, that for a long time they lived paycheque to paycheque.
There simply wasn’t much left to save toward a down payment on a home.
“We didn’t really think ownership was attainable for us,” said Lass, 33.
It was him who, in late 2018, saw an ad on the TTC for Options for Homes.
“He mentioned it to me several times but we kept putting it off,” said Thepanya.
The couple registered for one of the few affordable home ownership opportunities available in Toronto’s soaring housing market. Options is a nonprofit developer that has built 3,140 Toronto condos and townhouses for 6,068 homeowners over the last 25 years.
As governments finally rally to the need for affordable housing in Toronto, there’s a growing awareness that moderate income earners like Thepanya and Lass are being squeezed out of the market — they earn too much to qualify for subsidized housing, but struggle to save for a down payment.
Options for Homes is considered one of the most viable models for helping to solve that problem. Its shared equity financing program has the potential to be scaled up for that middle earner group, said a report by the Toronto Region Board of Trade and Wood Green Community Services last fall.
Most affordable housing programs are geared to helping renters, but Options is among the few — the federal government and Daniels Corp. also have programs — that work on a shared equity financing model, offering an opportunity for ownership among residents who would otherwise be shut out of real estate.
In April 2019, Lass and Thepanya connected with an Options representative. By early May, their Options rep, Silvia, had prepared all the documents and the couple emailed her the mortgage pre-approval letter from their bank a few days later.
Thepanya remembers their surprise at actually receiving a bank approval. “It made things real for us,” he said.
“After learning more, we realized that maybe we can end up being condo owners in expensive Tdot after all.”
They selected a one-bedroom-plus-den condo in The Humber. The newest of Options’ 14 buildings is near Lawrence Avenue West and Weston Road. It comes with a parking spot and is a short walk to the Union Pearson Express train downtown and close to parks and trails. It is 88 per cent sold out.
The Options purchase process is similar to that of for-profit developers. Options buyers have to be pre-approved for a mortgage and they must come up with a 5 per cent down payment for the unit they want to purchase. They must also intend to live in the home.
Qualified buyers then access a second loan for 10 to 15 per cent of the purchase price through Options’ financing partner Home Ownership Alternatives.
Thepanya and Lass are borrowing about 15 per cent or $67,626 toward a 750 sq. ft., $489,794 condo they expect to occupy in 2023.
They don’t have to repay the second mortgage until they sell their unit.
At that point they return15 per cent of the condo’s appreciated value. That money goes toward the development of Options’ next building.
Eighty per cent of Options for Homes purchasers will pay off their second mortgage within eight years. Some pay when they refinance after five years, said CEO Heather Tremain.
Buying with Options motivated Thepanya and Lass to start saving. The two are more established in their careers — Thepanya works for a post-secondary institution, Lass in insurance — and COVID has also helped by cutting their transportation and restaurant expenses.
With both of them working from home during the pandemic, their $1,700-a-month, onebedroom apartment near the Kipling subway feels tighter every day. But they will stay until they move into the condo, said Thepanya, 37.
“If we didn’t act when we did, (owning) wouldn’t have proved possible at all,” he said.
Thepanya and Lass aren’t unusual in feeling shut out of the housing market.
“The (housing) market has shifted so dramatically, people who could purchase less than 10 years ago see themselves on the outside of the market looking in,” said Tremain. “Frankly, some have given up hope.”
“We serve a group who — left on their own — would not be able to get into the market. They’re not seriously looking for an ownership opportunity anymore,” she said.
Options was born as a response to the federal government’s abandonment of the housing file.
“We’re a unicorn in the world of housing,” said Tremain.
“We’re delivering really good social benefits without a lot of government support. We’re doing it under our own steam. We add a lot of value without taking a lot.”
It now accesses a city program that helps deepen some units’ affordability.
A key difference between the federal government’s shared equity program and Options is that buyers in the latter program must purchase a home from the non-profit developer’s developments. It benefits from Tridel’s buying power on construction materials and new development charge rules that favour affordable buildings so that Options can offer a twobedroom condo for about $500,000 below the typical market price.
Tremain welcomes other players, including Ottawa, into the affordable ownership field.
“The reality in Canada is that many people’s financial wellbeing is predicated on ownership. We still should be trying to help people get into ownership over the longer term,” she said.
Options’ first project was Weston Village, a 42-townhouse development near Weston Road and Lawrence Avenue. In 2001, at a time when Tremain says coyotes still roamed the land, Options became the first condo developer in the Distillery District, building three towers with prices that started at $65,000.
All units in Options buildings are eligible for down payment subsidies and there are several new developments that are being launched in the fall.
Initially, Options acted as its own builder. But in 2001 it took the leap of joining forces with Deltera, the construction management arm of Tridel, which will build the next phases of Regent Park.
“You have these amazing experiences when we close the building and people get a set of keys and it’s the first time anyone in their family has ever owned a home. That changes the trajectory for that family,” said Tremain.
Thepanya and Lass said they wish they could move sooner — 2023 seems like a long way off.
“At least this way we can focus more on saving money for the condo and also for buying new furniture for the place,” said Thepanya.
“(The bank approval) made things real for us. After learning more, we realized that maybe we can end up being condo owners in expensive Tdot after all.” YANNI THEPANYA