Building Knowledge:
Housing Project Proles
Background
Veneto Place is an aordable housing complex for low-
to moderate-income families, seniors, and people with
disabilities. The site was developed through an
innovative public-private partnership in response to a
need identied by the community regarding Fernie’s
lack of aordable housing and its impact on growth
and development opportunities.
In 2008 Parastone Developments Ltd. wanted to keep
its construction crews employed during the world-wide
economic downturn that was aecting the local
construction sector. Parastone’s general manager also
understood that a range of aordable housing was key
to the community’s future sustainability. The company
was able to purchase land in downtown Fernie from a
private owner at a price substantially below market
value on the condition that it would be used for
developing aordable housing.
Construction began on Veneto Place in September 2009,
with Parastone partnering with BC Housing, Fernie
Family Housing Society, City of Fernie, Columbia Basin
Trust, and Canada Mortgage and Housing Corporation.
The rst tenants moved in December 2010.
Seniors’ Rental Housing initiative
The governments of Canada and British Columbia
partnered on the $123.6 million Seniors’ Rental Housing
initiative to create 1,000 new aordable housing units for
seniors and persons with disabilities in 40 communities
across B.C. The initiative was designed to help stimulate
local economies in smaller communities. It had created
close to 800 jobs by the end of 2011. Through innovative
partnerships with non-prot housing societies, nearly
1,200 new units have been created. Twelve of Veneto
Place’s 45 units were built with funding from this initiative.
The building
Veneto Place has a total of 45 units in three, four-storey,
wood-frame buildings with a mix of dierent size units
for dierent types of residents.
n
Nine two-bedroom units owned by the developer and
rented through Fernie Family Housing Society (FFHS)
at low end of market rates for eligible families;
n
12 one-bedroom units owned by BC Housing and
Veneto Place, Fernie
Page 1
Veneto Place, Fernie
rented through FFHS for the Seniors’ Rental Housing
initiative for seniors (age 55 plus) and people with
disabilities; and
n
24 two-bedroom strata units for low- to moderate-
income families for sale to qualied buyers at
below-market rates.
Sustainability features include:
n
Heat recovery ventilation;
n
Energy-ecient wall and roof insulation;
n
Electric heating;
n
Low-ow toilets (six litres per ush); and
n
Low-ow shower heads.
How aordability was achieved
Under an aordable home ownership strategy, 24 of
the two-bedroom units in Veneto Place are for sale
with prices ranging from $169,000 to $189,000
1
plus
applicable taxes. These units are targeted to moderate-
income families. These prices are estimated to be at least
10 per cent below the appraised fair market value.
A Resale Control Agreement is registered on title to
ensure the units remain aordable over time. The
agreement restricts the initial sale and re-sales to eligible
people and limits subsequent sale price increases to the
Core Consumer Price Index (CCPI). Half the homes are
subject to agreements of 10 years. After 10 years, if a
homeowner wants to sell, BC Housing will purchase
the home based on CCPI and could then re-sell it on
the private market. The other 12 homes are subject to
re-sale controls for 99 years.
Additional agreements are registered on title to address
issues related to the City of Fernie being a ski resort town.
To preclude weekend rentals for tourists, all rental units
must be occupied by residents of Fernie, and the 24
aordable ownership units must be owner-occupied.
Nine two-bedroom units owned by the developer are
rented to families and single people for $880 per month.
Page 2
This compares to about $1,000 per month for similar units
in the area. At $880, the units are aordable to households
with an annual household income of $35,200 so rents do
not exceed 30 per cent of income. A Housing Agreement
is registered on title by the City of Fernie to ensure the
units will remain as rental for at least 10 years.
The partners
n
Parastone Developments Ltd., a locally-owned
construction and development company operating in the
Elk Valley and located in Fernie, originally brought the
proposed development forward for consideration. Veneto
Place Properties Ltd., a subsidiary of Parastone, managed
the construction of the 45-unit housing complex.
n
Columbia Basin Trust develops and delivers programs
and initiatives that respond to the needs of communities
and supports them through a focus on fostering quality
of life and addressing critical issues in the Basin.
n
Fernie Family Housing Society is responsible for the nine
rental units owned by Parastone. The society also has an
operating agreement with BC Housing to manage the
12 Seniors’ Rental Housing units for seniors and people
with disabilities. Under this program, BC Housing does
not provide ongoing rent subsidies. Aordable rents
based on 30 per cent of income are possible because
the units are mortgage free. FFHS is responsible for
making sure the rental income covers operating costs.
FFHS
is responsible for reviewing applicants’ qualications
to meet the aordable home ownership program criteria
and hosting open houses to showcase the aordable
home ownership program. The developer is responsible
for the initial sales and qualifying purchasers.
n
BC Housing provided interim construction nancing in
the amount of $7 million for all 45 units through its
Community Partnership Initiative. The low interest rate,
which averaged about one per cent, resulted in savings
of approximately $200,000 in interest when compared
with an available commercial rate of prime plus 1.25
oered to the developer. These savings, as well as
1
Parastone website February 2011
BC Housing’s reduced loan administration fee, were
used to reduce overall project costs.
BC Housing purchased 12 strata units at a cost of
$1,785,000 to provide rental housing for low- to
moderate-income seniors and people with disabilities.
Funding for the units was available through the Seniors’
Rental Housing initiative.
Funding
The total capital cost of the entire 45-unit development,
including the 12 SRH units was approximately $7 million.
n
Parastone Developments Ltd. contributed $123,142 in
equity for the project.
n
A private owner sold the land to Parastone at a price
substantially below market value, on the basis that the
development would be aordable.
n
City of Fernie fast-tracked rezoning of the property and
approved zoning variances and waived application fees
and development cost charges for an estimated value
of about $338,000.
n
Columbia Basin Trust agreed to provide bridge nancing
for units not sold within a certain period of time after
construction, up to $4.5 million, and provided take-out
nancing for the developer’s nine rental units.
2
n
Canada Mortgage and Housing Corporation provided
initial project development funds valued at $32,000.
n
East Kootenay Community Credit Union oers mortgage
nancing to eligible families and individuals to purchase
the aordable home ownership units.
Factors for success
n
The private developer understood the community’s
need for aordable housing and initiated the project.
n
Federal and provincial funding through the Seniors’
Rental Housing initiative made it possible for BC Housing
to purchase 12 rental units for low- to moderate-income
seniors and persons with disabilities.
n
Construction nancing by BC Housing reduced overall
project costs.
Page 3
n
Good weather in winter and excellent construction
management made it possible to complete
construction and begin renting and selling units
earlier than anticipated.
Challenges
n
Sales are slower than anticipated for the 24 home
ownership units, even though prices are below market.
A number of factors may be responsible for this,
including a slow real estate market, a slow economy
particularly in more rural areas, and tightening up of
criteria to obtain mortgage nancing. The restriction on
resale prices may also be a deterrent for potential buyers.
n
Heating costs are signicantly higher than anticipated.
Lessons learned
n
Veneto Place has made a marked dierence in the
quality of lives of its residents. All 21 rental units
are fully occupied. Eight of the 12 tenants in the
BC Housing units were homeless or at risk of
homelessness before moving in. More applicants
are on the waitlist. The nine rental units owned by
the developer provide a much needed aordable
housing option for moderate-income earners.
n
While sales for the aordable home ownership units
have been slower than expected, the concept is viable,
and Parastone Developments Ltd. expects all units to be
sold or occupied by year end 2012. To provide greater
exibility, it has introduced a rent-to-own option that
can enable a purchaser to build a down payment over
a period of six months to a year.
3
n
Overall, the housing development is centrally located,
well designed, and a benet to the community.
2
BC Housing provided construction nancing for a period of time
post-occupancy to allow for the units to be sold. Columbia Basin
Trust bridge nancing is available if sales are not completed.
3
Households may make an initial payment of $1,000 and pay
$1,000 per month rent of which $200 will be put toward the
remaining down payment.
Building Knowledge:
Housing Project Proles
Background
Veneto Place is an aordable housing complex for low-
to moderate-income families, seniors, and people with
disabilities. The site was developed through an
innovative public-private partnership in response to a
need identied by the community regarding Fernie’s
lack of aordable housing and its impact on growth
and development opportunities.
In 2008 Parastone Developments Ltd. wanted to keep
its construction crews employed during the world-wide
economic downturn that was aecting the local
construction sector. Parastone’s general manager also
understood that a range of aordable housing was key
to the community’s future sustainability. The company
was able to purchase land in downtown Fernie from a
private owner at a price substantially below market
value on the condition that it would be used for
developing aordable housing.
Construction began on Veneto Place in September 2009,
with Parastone partnering with BC Housing, Fernie
Family Housing Society, City of Fernie, Columbia Basin
Trust, and Canada Mortgage and Housing Corporation.
The rst tenants moved in December 2010.
Seniors’ Rental Housing initiative
The governments of Canada and British Columbia
partnered on the $123.6 million Seniors’ Rental Housing
initiative to create 1,000 new aordable housing units for
seniors and persons with disabilities in 40 communities
across B.C. The initiative was designed to help stimulate
local economies in smaller communities. It had created
close to 800 jobs by the end of 2011. Through innovative
partnerships with non-prot housing societies, nearly
1,200 new units have been created. Twelve of Veneto
Place’s 45 units were built with funding from this initiative.
The building
Veneto Place has a total of 45 units in three, four-storey,
wood-frame buildings with a mix of dierent size units
for dierent types of residents.
n
Nine two-bedroom units owned by the developer and
rented through Fernie Family Housing Society (FFHS)
at low end of market rates for eligible families;
n
12 one-bedroom units owned by BC Housing and
Veneto Place, Fernie
Page 1
Veneto Place, Fernie
rented through FFHS for the Seniors’ Rental Housing
initiative for seniors (age 55 plus) and people with
disabilities; and
n
24 two-bedroom strata units for low- to moderate-
income families for sale to qualied buyers at
below-market rates.
Sustainability features include:
n
Heat recovery ventilation;
n
Energy-ecient wall and roof insulation;
n
Electric heating;
n
Low-ow toilets (six litres per ush); and
n
Low-ow shower heads.
How aordability was achieved
Under an aordable home ownership strategy, 24 of
the two-bedroom units in Veneto Place are for sale
with prices ranging from $169,000 to $189,000
1
plus
applicable taxes. These units are targeted to moderate-
income families. These prices are estimated to be at least
10 per cent below the appraised fair market value.
A Resale Control Agreement is registered on title to
ensure the units remain aordable over time. The
agreement restricts the initial sale and re-sales to eligible
people and limits subsequent sale price increases to the
Core Consumer Price Index (CCPI). Half the homes are
subject to agreements of 10 years. After 10 years, if a
homeowner wants to sell, BC Housing will purchase
the home based on CCPI and could then re-sell it on
the private market. The other 12 homes are subject to
re-sale controls for 99 years.
Additional agreements are registered on title to address
issues related to the City of Fernie being a ski resort town.
To preclude weekend rentals for tourists, all rental units
must be occupied by residents of Fernie, and the 24
aordable ownership units must be owner-occupied.
Nine two-bedroom units owned by the developer are
rented to families and single people for $880 per month.
Page 2
This compares to about $1,000 per month for similar units
in the area. At $880, the units are aordable to households
with an annual household income of $35,200 so rents do
not exceed 30 per cent of income. A Housing Agreement
is registered on title by the City of Fernie to ensure the
units will remain as rental for at least 10 years.
The partners
n
Parastone Developments Ltd., a locally-owned
construction and development company operating in the
Elk Valley and located in Fernie, originally brought the
proposed development forward for consideration. Veneto
Place Properties Ltd., a subsidiary of Parastone, managed
the construction of the 45-unit housing complex.
n
Columbia Basin Trust develops and delivers programs
and initiatives that respond to the needs of communities
and supports them through a focus on fostering quality
of life and addressing critical issues in the Basin.
n
Fernie Family Housing Society is responsible for the nine
rental units owned by Parastone. The society also has an
operating agreement with BC Housing to manage the
12 Seniors’ Rental Housing units for seniors and people
with disabilities. Under this program, BC Housing does
not provide ongoing rent subsidies. Aordable rents
based on 30 per cent of income are possible because
the units are mortgage free. FFHS is responsible for
making sure the rental income covers operating costs.
FFHS
is responsible for reviewing applicants’ qualications
to meet the aordable home ownership program criteria
and hosting open houses to showcase the aordable
home ownership program. The developer is responsible
for the initial sales and qualifying purchasers.
n
BC Housing provided interim construction nancing in
the amount of $7 million for all 45 units through its
Community Partnership Initiative. The low interest rate,
which averaged about one per cent, resulted in savings
of approximately $200,000 in interest when compared
with an available commercial rate of prime plus 1.25
oered to the developer. These savings, as well as
1
Parastone website February 2011
BC Housing’s reduced loan administration fee, were
used to reduce overall project costs.
BC Housing purchased 12 strata units at a cost of
$1,785,000 to provide rental housing for low- to
moderate-income seniors and people with disabilities.
Funding for the units was available through the Seniors’
Rental Housing initiative.
Funding
The total capital cost of the entire 45-unit development,
including the 12 SRH units was approximately $7 million.
n
Parastone Developments Ltd. contributed $123,142 in
equity for the project.
n
A private owner sold the land to Parastone at a price
substantially below market value, on the basis that the
development would be aordable.
n
City of Fernie fast-tracked rezoning of the property and
approved zoning variances and waived application fees
and development cost charges for an estimated value
of about $338,000.
n
Columbia Basin Trust agreed to provide bridge nancing
for units not sold within a certain period of time after
construction, up to $4.5 million, and provided take-out
nancing for the developer’s nine rental units.
2
n
Canada Mortgage and Housing Corporation provided
initial project development funds valued at $32,000.
n
East Kootenay Community Credit Union oers mortgage
nancing to eligible families and individuals to purchase
the aordable home ownership units.
Factors for success
n
The private developer understood the community’s
need for aordable housing and initiated the project.
n
Federal and provincial funding through the Seniors’
Rental Housing initiative made it possible for BC Housing
to purchase 12 rental units for low- to moderate-income
seniors and persons with disabilities.
n
Construction nancing by BC Housing reduced overall
project costs.
Page 3
n
Good weather in winter and excellent construction
management made it possible to complete
construction and begin renting and selling units
earlier than anticipated.
Challenges
n
Sales are slower than anticipated for the 24 home
ownership units, even though prices are below market.
A number of factors may be responsible for this,
including a slow real estate market, a slow economy
particularly in more rural areas, and tightening up of
criteria to obtain mortgage nancing. The restriction on
resale prices may also be a deterrent for potential buyers.
n
Heating costs are signicantly higher than anticipated.
Lessons learned
n
Veneto Place has made a marked dierence in the
quality of lives of its residents. All 21 rental units
are fully occupied. Eight of the 12 tenants in the
BC Housing units were homeless or at risk of
homelessness before moving in. More applicants
are on the waitlist. The nine rental units owned by
the developer provide a much needed aordable
housing option for moderate-income earners.
n
While sales for the aordable home ownership units
have been slower than expected, the concept is viable,
and Parastone Developments Ltd. expects all units to be
sold or occupied by year end 2012. To provide greater
exibility, it has introduced a rent-to-own option that
can enable a purchaser to build a down payment over
a period of six months to a year.
3
n
Overall, the housing development is centrally located,
well designed, and a benet to the community.
2
BC Housing provided construction nancing for a period of time
post-occupancy to allow for the units to be sold. Columbia Basin
Trust bridge nancing is available if sales are not completed.
3
Households may make an initial payment of $1,000 and pay
$1,000 per month rent of which $200 will be put toward the
remaining down payment.