Charitable Building: How NewRock Developments helps almost anyone own a home
The company is #30 on the 2013 Fast Growth 50
by Alexandria Eldridge
#30 on the 2013 Fast Growth 50
Head Office: Medicine Hat
2011 gross annual sales: $21,184,599
2010 gross annual sales: $10,477
Photograph Jeff Noon
Most businesses aim to make as much money as they can.
NewRock Developments does things differently. “We take a set profit. It might be a little smaller than some of the other developers would be used to, but whatever’s left we give back to the homeowner,” says Cam Ens, president of the Medicine Hat-based homebuilding company that has built its business around providing attainable housing.
Since it was founded in 2010, the company has contributed $13 million to people who may otherwise have been unable to make a down payment on a home or to gain mortgage approval from a bank. “We really believe that if we can help people get into home ownership, their lives will be better. We just feel it’s our mandate,” Ens says.
NewRock has been fulfilling that mandate, helping more than 1,200 people become homeowners in its short company history. NewRock’s also helped itself along the way. In one year, the company grew its gross annual revenues from $10,477 in 2010 to a staggering $21 million in 2011. The company has completed projects in Red Deer, Regina, Saskatoon and Strathmore and is expanding into Fort St. John, Moose Jaw and Lethbridge. “We didn’t start out saying we wanted to build in all these cities,” Ens says. “The growth was just kind of a natural progression because people were so excited to see our product.”
The excitement is understandable. With high rents in many cities in Alberta and Saskatchewan, it’s common for people to be paying the equivalent of a mortgage payment for a rental. That makes it difficult to save enough for a down payment. NewRock addresses that problem through its CCL Mortgage Assistance Program, which offers buyers an interest-free loan to go towards their down payment.
On closing, NewRock also gives buyers an amount, ranging from $18,000 to $37,000, to go towards monthly payments. The money is given to the Canadian Society for Housing Trusts, which distributes it to the homeowner on a monthly basis, gradually decreasing the payout every year until the money runs out. “It’s proven itself that this formula works quite well. It doesn’t shock them with getting nothing [all of a sudden],” says Ens. “That amount is a gift. If they sell the home, whatever is left goes to the next homeowner, so that also gives them a bit of an advantage.”
And because the monthly payment is reduced, people with a slightly lower income are more likely to get their mortgages approved – something that has been made more difficult in recent years. “The challenging thing is getting their mortgages approved,” says Ens. “[It] has become tougher with the changes the Government of Canada has made,” referring to tighter rules since 2008 on down payments and amortization periods.
The help NewRock gives its customers sounds almost too good to be true, but Ens stresses that the company does right by its buyers. “We sell the units for slightly below appraised value,” he says. “When you’re giving money back to help people, everyone wants to be sure that you’re not overcharging for the home. Oftentimes that’s what people think is happening.” There are also no strings attached. The equity belongs to the buyer and NewRock has no further involvement after the sale, other than to collect the down payment loan.
Although there’s plenty of demand for NewRock’s product, Ens doesn’t foresee much competition for the time being. “Most businesses or developers aren’t used to giving away some of their profits, especially in really strong markets,” he says. “In Regina you wouldn’t see many people try because you can sell anything there right now.”
But Ens and his partner Rob Whitten aren’t in this just to sell. The pair left previous jobs in the construction industry to start a company that was both successful and rewarding.“We’ve got lots of stories of folks who never thought they could own a home,” Ens says. “To see them get into a home – it’s very fulfilling for us.”