A unique rent-to-own plan for a new condo development in Port Moody will allow 30 local buyers to rent their unit for two years, with the money going towards their downpayment
The developer of a condo project in Port Moody says he’s overwhelmed by the response to a program that will allow 30 prospective owners to roll the rent they’ll pay on their new units for two years towards the unit’s purchase price.
Kush Panatch, president of Richmond-based Panatch Group, which is building the project — 358 residential units in two six-storey buildings — at 50 Electronic Ave., said more than 500 applicants have expressed interest in the rent-to-own program that is available to first-time home buyers who already live or work in Port Moody since it was launched in late January.
Panatch said his family-owned company wanted to make a positive impact in the community for its first Port Moody project, and while refining its proposal for approval by city council, it kept hearing about the frustrations young people in the city are having pulling together enough savings for a down payment in the Lower Mainland’s hyperactive real estate market.
“The housing challenge is very real,” Panatch said, adding while his company’s rent-to-own program isn’t a total fix, it may form part of the solution.
Christian Fracchia, a 24-year-old IT administrator with a Vancouver animation studio, said the rent-to-own program could make his dream of putting down roots in the city where he grew up more realistic.
Currently renting an apartment with a roommate in Moody Centre, Fracchia said home ownership has been a goal of his for a couple of years, instilled in him by his dad’s teachings about financial responsibility. But even as he manages to save a quarter of his paycheque, he said the goalpost of accumulating a downpayment always seems to be moving further downfield.
He said if he’s selected in the lottery that will be employed to determine the successful 30 applicants for the Electronic Avenue project, he’ll not only be able to build his nest egg while he’s living in his new unit, it’s also a motivator to ramp up his savings strategy for a downpayment even higher.
Panatch said he wanted to keep the program as simple as possible to achieve his goal of giving home ownership opportunities to young people who want to settle in Port Moody. To be eligible, prospective buyers have to already live and work in the city, qualify for a mortgage and they have to commit to living in the unit as their principle residence. If selected, the price for their unit will be locked in and, once construction is completed in 2021, they’ll pay $1,000 a month rent for a one-bedroom unit, or $1,200 for a two-bedroom, for two years. The money will be put into a trust account and then applied towards the purchase price.
The Real Estate Council of British Columbia said rent-to-own plans can be an effective way for prospective homeowners to come up with the cash for a downpayment but it also advises participants in such plans go into them with a full understanding of how they work, the terms of the contract and what’s included in the rent during the rental period.
Panatch said his project's rent-to-own units will be a mix of one- and two-bedrooms, with 12 allocated in the project’s first phase, and 18 in the second phase. He also concedes, with prices starting at $469,900 for a 643-sq. ft. one-bedroom unit and two-bedroom units going for up to $719,900, buyers selected for the rent-to-own program will likely still have to get some help from “the bank of mom and dad,” or have substantial savings already in the bank.
“We see this as a pathway to ownership,” he said.
Port Moody Mayor, Rob Vagramov said giving young people the opportunity to set roots in the city is an important part of making it an inclusive community.
“It takes a village to have a village,” he said. “We have to have a little bit of everybody to have a world.”
Panatch said even as a developer, it’s frustrating when the housing he builds is out of reach to people like teachers and firefighters who earn good incomes or forces young people to live far afield from their jobs.
Nadine Cornelius, a 31-year-old event management professional, said she and her partner have fallen in love with Port Moody since moving to a rental apartment in the city three years ago because Vancouver had become too expensive. They hike the trails around Buntzen Lake, meet friends at Brewers Row and go for walks in Rocky Point Park.
“It’s like living in a small town but it’s not,” said Cornelius, who has also applied to participate in the rent-to-own program.
Committing to stay in the city makes sense for their lifestyle, she said.
Panatch said being able to help address that desire can benefit the whole community because “people want to maintain their relationships."