The 104 Plaza project in Surrey that was once touted for the inclusion of over 400 homes eligible for BC Housing's Affordable Home Ownership Program (AHOP) will no longer be providing those affordable ownership units.
The developer, British Columbia-based Echo Properties, initially planned to offer 401 units of their multi-tower development through AHOP, a program that provides a 10% interest-free second mortgage to eligible buyers. Buyers who purchase these units are required to put 5% down, resulting in a 15% down payment which can subsequently result in lower monthly mortgage payments as well.
Hinging on the project's increased costs, the decision to no longer provide the AHOP units at 104 Plaza appears to have been made by both the developer and BC Housing.
"Due to macroeconomic changes that have significantly affected BC Housing’s ability to finance the program, the units can no longer be provided as affordable market units for sale," said Surrey City staff in a report this week.
The City says that Echo Properties informed them that 84% of the units are now no longer eligible under the AHOP income thresholds, "due to significant macroeconomic changes that have resulted in increased interest rates, construction costs and financing rates."
BC Housing subsequently reviewed the information and agreed that they are no longer able to finance the program, "because the units would not meet the required criteria unless economic, financial, and construction conditions change."
A financial and eligibility comparison for units in 104 Plaza between 2020 and 2023.(City of Surrey)
The 104 Plaza project is planned for a site bound by 104 Avenue to the north, Central Avenue to the south, Whalley Boulevard to the west, and 138A Street to the east that is currently partially occupied by a series of low-rise commercial buildings — now shuttered — about three blocks east of Surrey Central Station.
Echo Properties submitted their rezoning application in April 2020, proposing three high-rise residential buildings to be delivered across three phases. Phase one would see a 33-storey residential tower with commercial space on the ground floor, followed by a 36-storey residential tower in phase two, and a 31-storey residential tower in phase three.
Phase one's 33-storey tower was proposed to have a total of 424 units, 401 of which would be made available for purchase through the BC Housing AHOP. In October 2021, a memorandum of understanding was signed between the City of Surrey and BC Housing outlining the AHOP units, but the City notes that it was a non-binding agreement.
Now, Echo Properties is proposing 427 strata units with a suite mix of 63 studios, 276 one-bedrooms, 81 two-bedrooms, and seven three-bedrooms.
"As a result of the planned units no longer being eligible under AHOP, it is highly challenging for this project to receive construction financing," City staff said, explaining the shift to strata.
With the shift, however, Echo Properties will now have to pay community amenity contributions (CACs), which were previously deferred as a result of the AHOP units. The project will be subject to both Tier 1 and Tier 2 CACs, as well as the City of Surrey's affordable housing contribution policy.
No other changes to the proposal have been made, but the City says the application now has to return to a public hearing, which has been set for Monday, October 30.