From the Star Phoenix "Pleasant Hill housing lacks buyers"
The City of Saskatoon will offer a 10 per cent grant to try to sell townhouse units in Pleasant Hill that have failed to move since hitting the market in 2010.These units range from 190k to 240k, but in 2006 the median household income for this area was 26k and the average house price back then was just under 60k. Pleasant Hill had a 25% home ownership rate. Is there any surprise on why these units are not selling going into the third year. And this is at a time when the city is booming.
Three years ago, the city agreed to purchase any units not sold by two developers - the Affordable New Home Development Foundation and Cenith Developments Inc. - after the units were on the market for six months. The guarantee was offered to attract home builders to the project.
The Affordable New Home Development Foundation built a 24-unit townhouse complex called Parkview Green on 19th Street West while Cenith built a 12-unit townhouse complex on Avenue N South. The units, which are in the Pleasant Hill Village revitalization project surrounding the new St. Mary school project, range from $190,000 to $240,000.
Eighteen of the 36 units were purchased by non-profit housing corporations Quint Development Corp. and Cress Housing. The city was forced in late 2010 to purchase 18 units at a fixed price.
Only four of those units have sold, leaving 14 townhouses still on the market with a total value of $2.7 million. That leaves $270,000 in potential grant money that will be doled out by the city to purchasers. The money will be funded through a city land sales reserve.
The city will offer a 10 per cent "equity grant" for any family purchasing the homes to own and live in. The grant can be used to fund a down payment.
Construction in the area has hurt sales and other developers are offering incentives for similar projects in new neighbourhoods, a city report said.
"When offered a choice, many prospective purchasers would prefer to live in a newer neighbourhood, which is not undergoing redevelopment," the report said.
The completion of St. Mary school and a Knights of Columbus seniors complex on 20th Street should help spur sales, said Alan Wallace, the city's planning and development manager.
"Sales have been slower than expected," he said.
The incentive program is meant to bring more home ownership to Pleasant Hill. The homes purchased by Quint and Cress remain rentals.
The city considered a number of options to sell the homes, including a rent-to-own program and an offer to purchase for below market value from Habitat for Humanity, but wants to absorb as small of a loss as possible, a city report said.
Council will also consider offering a property tax abatement on the homes, which would be phased out incrementally over five years.