B.C. NDP Leader David Eby, left, and Surrey-Cloverdale NDP candidate Mike Starchuk walk to a campaign announcement in Surrey, B.C., on Sept. 25.DARRYL DYCK/The Canadian Press
British Columbia’s two major parties have each rolled out housing policies during the first week of the election campaign, platforms aimed at cutting costs for those grappling with the unaffordability of living in the province.
The incumbent New Democrats announced plans Wednesday to offer loans to first-time home buyers to cover 40 per cent of the cost of buying one of 25,000 new homes earmarked for the program. Earlier this week, the Conservatives promised to introduce a tax credit for renters and homeowners.
Affordability and housing costs are top issues in the campaign for the Oct. 19 election, particularly in the Vancouver region, which has the country’s most expensive housing market for both owners and renters. The region’s real estate board puts the benchmark price for a detached home in the Vancouver area at about $2-million, while the average monthly lease on a one-bedroom apartment is about $2,700, according to the online listing agency Rentals.ca.
The NDP government has poured billions of dollars into new home construction as part of its effort to make real estate more affordable, passing legislation to rein in short-term rentals and to prevent municipal governments from blocking densification in neighbourhoods. The Conservatives have promised to undo most of those policies, saying they will increase development by giving cities funds for new infrastructure without forcing these communities to hit certain benchmarks for new supply.
B.C. NDP Leader David Eby said at a news conference in Surrey Wednesday that, if re-elected, this unconventional loan program would aim to help build 25,000 new units across the province over the next five years. He said the homes would be on no-cost or low-cost land in partnership with non-profits, municipalities, First Nations and real estate developers.
Mr. Eby estimated the loans would total $1.29-billion per year, but said the government will recover this money through a second mortgage on these properties, which the buyers must pay 1.5-per-cent interest to the government over the period of the loan.
When these buyers eventually sell their unit, the provincial loan will be repaid along with 40 per cent of the amount the home appreciated while they owned it, Mr. Eby told reporters. If they don’t sell it, he said, they would need to repay the full amount of the loan 25 years after their initial purchase.
He said this new program expands on a model announced last week, just before the election campaign began, when Mr. Eby said 40-per-cent loans would be offered to all buyers of the 2,600 homes planned for a site in central Vancouver known as the Heather Lands. The area is being developed by the Musqueam, Squamish and Tsleil-Waututh nations.
Mr. Eby said providing buyers with loans to get into the housing market would not stoke prices because, he argued, eligible households would not be competing for existing properties but instead be supporting new development.
“There’s not infinite tax dollars to spend on affordable housing, there’s not infinite capital dollars to do that either and so the beauty of this program is it does create that possibility of funding attainable housing for the middle class going forward into the future, in a way that other jurisdictions have done really successfully, like Singapore,” Mr. Eby said.
BC Conservative Leader John Rustad has vowed to scrap the NDP’s housing policies while spurring the development of much more supply if his party is elected for the first time in nearly a century.
On Monday, while also campaigning in the electoral battleground of Surrey, Mr. Rustad unveiled his plan to help those struggling with sky-high rents and mortgage payments. The Conservatives are proposing a tax credit for renters and homeowners, through which households earning less than $250,000 a year would eventually be able to claim up to $3,000 a month of their rent or mortgage interest payments as an exemption when filing their provincial income tax.
Mr. Rustad said that the average family receiving the full credit by the end of the program could see more than $1,600 in annual rebates. But, he estimated, this tax credit could take $3.5-billion out of provincial revenues.