HomeMy WebLinkAboutThe Goderich Signal-Star, 1973-10-11, Page 21imativs to those who are unable to make the •finen-
wrngsmsnts toward purchasing a single family
-Is accommodation In an apartment complex.
of tight financing, the demand locally for apartment
accommodation has exceeded the supply and for the
moment continues to do so. As a result the municipal leaders
have been faced with a rash of application for the construc-
tion of apartment buildings like this one on Blake street.
KAON SHAW longer afford to .purchase
property at that price.
question of low cost On that point the developer
be it row housing, scores a point.
iniums or whatever, The prime interest rate for
before Town Council mortgages, .if you can find,' a
Goderich and Area financial institution with
Board. money available and agreeable
surface, the question to lend it, is 10 and one quarter
be an issue of plan= per cent. For those who qualify
re-ito locate such for a National Housing
and having them Authority mortgage the rate is
in such a way, and nine and three quarter per cent.
numbers, that they do Conventional mortgages ask
ct from nearby single 10 per cent to 20 per cent' down
llings. Below the sur- on the value of the property but
ever, it seems the mat for those who qualify for
financial pressure on N.H.A. financing as little as 5
lathe real question at per cent may suffice for a down
payment.
recent Planning Board , It°_is.,important to remember,
GuaChisholm, a mem- however, that the appraised
tbody, asked if there value of a home, and its market
,ya need in Goderich value, may be considerably dif-
housing and -con- ferent. In Goderich, where
and if the corn- housing seems -to be in short
was ready for that sort supply and where the cost of
opment. • building lots is at an all time.
hisholm also asked if high, the market value of a
as so --short- in the _home may be several thousand_
lity as to force 'such dollars higher than the ap-
ion. praised value. Therefore, in ad-
ain concern of Plan- dition to coming up with the
rd seemed to be that down payment, the prospective
er cost homes might home owner must also raise
from the single family those .extra dollars which
d as a result the board separate appraised and market
careful look at the ap- value.
for rezoning of the Take, as an example, an
set aside for the row' 1,100 square foot home.
complex. In Goderich the building cost
Mr. Chisholm leading of such a home is reported tolbe
ition to row -housing.; $20 per square foot for a total
grounds that Goderich expense to the developer of
as Yetin position $22,000 per home. Mr. Kroh -
such construction was mer told Planning Board last
,developer Eric Kroh- week that he had recently paid
wishes to build the $7,000 for a .lot so adding in
defended the housing that figure the value of a home,
on the economic issue. to the developer, • reaches a
ohmer said that wi'fh total of $29,000.''
wilding costs, and Trust ;companies appraise
y the cost of building 'properties on a base of about
homes of the single $24 pe„ ,, square foot which
tYWent on the market means the appraised value of
or more. It is his that same home is op $26,400,
.0 that the majority of a total of $2,600 less. than the
e homeowners can no investment the developer has
the property before he even sets The increasing costs, com-
a market price which would in- bined with rising interest rates
clude his profit. and an ever tightening supply
From these figures -it is ob-` of money for mortgages, . has
vious`' that 1,100 square foot been steadily adding.to the bur -
home would hardly go ori the den -a prospective homeowner -
market for as little as $30;000. must bear.
Combining the' developer's It should also be pointed out
profit expectations and the w that those investing in new
demand for housing in this homes throughout the various
municipality it would be listed ' subdivisions at the south end of
at least $35,000. Goderich do so on grounds that ,
This means 4that -if the all services have been installed
prospective buyer qualifies for' and paid for by the developer.
the best possible mortgage In other words, once the deed is
arrangement under the.N.H.A: signed and the money Iran -
he needs a down payment of sferred, capital cost of, the new
$1,320 plus the difference bet- homes is wrapped up. ,,
ween appraised value and the,' Homeowners in that area,
actual price which is $8,600 :however, are now finding that
more for a total of $9,920. such- may not ° be the case.
The situation is even worse Possibly itis 'only a matter of
of course if the buyer must seek interpretation of . the
a conventional mortgage under agreement, but although the
which he may have to make a services have indeed been in -
down payment ranging between stalled by the subdivider the
$2,640 and $5,280 depending sewers have no permanently
on how he , qualifies for the constructed outlet. As a result
financing. the debate of past months,
One point_ of contention in _ regarding assessment of cost for
this theory of figures might "be the-- new South- Storm -Sewer;
the figure - used ` as the has developed. -
developer's building cost, $20 It has been argued that since
per square foot. In London, for the developers involved offer
example, the average building the new homes as "fully ser-
cost is only $18 per square foot viced" the cost of installing the
but many developers feel it new outlet system should be
costs them two additional levied againt them and not the
dollars per square foot to -build • property,owners who purchased
in Goderich„. homes which had been
One Goderich developer told 'represented to them as "fully
the Signal -Star that the $20 per - serviced." '...4__
The assessment system under
for construction, estimating the Drainage •Act which has
that the average cost would be been - given. first ,and second
about $19.25 per square foot. reading by Goderich Town
Building cost, depending on the Council, sets the cost to each
home being built, ranges bet- property owner benefiting from
ween $18.60 and $20.00. - the new sewer on a "benefit
Costs have been qn a steady and outlet" concept.
rise, however. Since February Homeowners, whose property
of this year construction costs will be drained by the new
have increased by 15 per cent sewer, are assessed basically on
and in the past year have gone how far the system will carry
up 20 per cent. This, of course, runoff from their property and
has been steadily pushing
*the how close that property is to
price of a new'lrome upward at the system. The first con -
the same rate. .
square foot cost was top price
The pressure of rising rates of interest on mortgages, a shor-
tage of mortgage money in general, and rising construction
costs may be making these single family dwellings a thing of
the past for the average family. The answer to these
problems, according to the developers at least, may, be row
sideration is based on the
theory that those persons with
runoff going the furthest in the
new sewer benefit more than -
those with runoff going a shor-
ter distance. The second con-
sideration is -based on the
theory that. those living. closest
to the open ditch, which now
serves the area, will - benefit
norp in an aesthetic and safety
value than those living further
away.
In' general terms this means
a homeowner living at the ex-
treme east end of the sewer
twhiCh flows east to west) and
owning property abutting the
sewer would pay the most while
the homeowner living closest to
the lakesliore and at the fur-
thest benefit distance from the
sewer would pay the least.
Assessment to the majority
who live at varying degrees bet=
ween these extremesis worked
out on such a formula.
The municipality of the
Town of Goderich is assisting
with the sewer cost by paying
its own share of the assessment
as it will apply to municipal
property, streets and roads, and
will also assume all levied
assessments of $25 and under.
The point of all•this remains
that those who have run the
financial gauntlet and
managed to purchase a new
home in the south of town now
find themselves faced with
another, and for some, rather
large cost for which they did
not budget.
So what are the alternatives
to single family dwelling units?
First of all there are apart -
ments. The first drawback here,
for the guy looking for a zoof to
put over his head, is that
although he pays out anywhere
from $75 to $175 each month
for accommodation all he
achieves is to house himself
and his family :(which -granted
is the most important thing)
but he realizes no additional
benefit from that expended,
housing. units or condominium type construction. The result
has been a new field in which Goderich and Area Planning
Board and Town Council must make policy decisions to
guide future development in the municipality.
(staff photo)
That is to say he has no 'in-
vestment after five, 10 or 15
years whereas the person who
managed tp purchase a home
and keep up with the mortgage
payments will realize some
return on those monthly
payments when he puts that
property back on the market for
resale.
Anyone who purchased a
who has kept it in good repair,
and possibly " updated it
through improvements over the
years; stands to make a tidy
profit on his investment at
resale.
Real estate has always been
considered a good investment
and, although it seems im-
possible that the market will
continued on owes 7n
et these
Ate homes In ono o1 the newer subdivisions at the south of
htehesitl t t did not budget tor"
y rill have to fork out maw they
look tb, tateessnient of oost for constructing the new "south
homes two sold as "fuNy serviced" but although the
sewers were MstaNed throughout the subdivision they have no outlet. Soule
members of Planning Board are also concerned that 'value of the properties
may be effected by recent moves to construct a row howling complexes in
such areas.
This ditch now serves as a runoff' for storm water throughout the subdkisions at that se* *
end of Ooderich. It is to be replaced by the much debated South Storm Sewer -for whiolu
property owners In the area win have to pay. Many of the homeowners feel this le sof*
since they purchased their property under an agrement that the area viae Noy serviced.
Although the sewers are Installed throughout the subdivisions they have no eut1st.
(staff photo)