b.c. developers say they don't want a buyout for empty condos
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real estate developers are pushing back against claims that a new federal-provincial program to buy up empty condos is something the industry asked for, with the urban development institute and others saying that it isn’t a bailout and won’t help their sector.
two weeks ago, premier david eby and prime minister mark carney said they are putting together a plan to buy more than 2,200 unsold local condos and provide them as affordable housing.
last thursday, they provided more details, saying the program will have a total budget of $1.45 billion, with b.c. and ottawa each providing $145 million. the rest of the money will come through financing, and the units will be entered into a rent-to-own program where occupants can pay part of their monthly rent toward a downpayment.
rick ilich, ceo of townline homes and chair of the urban development institute, said he is not aware of any developer who spoke to the government about the program before its unveiling.
“the complexity of a province buying homes, and then creating a structure wrapped around that, and then playing landlord around the rent-to-own program — like if anybody can make rent-to-own work, government can, because they can give away money where they feel like it. but why create such complexity,” said ilich.
he said he would rather the provincial government implement its campaign promise from 2024 to cover up to 40 per cent of the purchase price on 25,000 new units over five years to help middle-income families break into the market. the loan would be repaid through appreciation when the owner sells the unit or over the course of 25 years.
eby and carney have both admitted they could have done a better job of communicating the details of the program, with carney saying it was something the province asked for, while eby said ottawa wanted to roll it out before it had been finalized.
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acknowledging the criticism that it could be a potential bailout for developers, eby has said that the plan isn’t structured to help developers who made bad business decisions but that “if people hate it, it’s ok, we don’t have to do it.”
b.c. housing minister christine boyle said the goal of the condo program is to allow people to purchase a home who would not have been able to do so previously.
she said it wasn’t surprising that developers aren’t supportive of the idea, given it won’t help them.
“the development sector has made clear this isn’t what they asked for, because, as i and the premier have said, developers won’t benefit from this,” said boyle.
“i hear often from people who are working a good job, they’re making a good income, often they’re paying in rent what they would be paying on a mortgage. but because they don’t have help from the ‘bank of mom and dad’ or other sources to be able to save for downpayments, they’re locked out of home ownership. the program we’re designing looks to support british columbians like that of all ages.”
in a statement, the ministry of housing and municipal affairs said that the campaign promise to cover 40 per cent of the purchase price is being tried out on the heather lands project in collaboration with the musqueam, squamish and tsleil-waututh nations.
“this partnership is expected to create more than 2,600 strata leasehold homes for eligible middle-income buyers, with priority for first-time homebuyers,” said a ministry spokesperson.
mark goodman, principal at real estate agency goodman commercial, said the empty condos program is a waste of taxpayers’ money that nobody asked for and that won’t do much to create housing affordability.
“any time a government gets involved and they start playing with the levers, more often than not, they screw things up, and our government has really screwed things up,” said goodman.
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“one could argue that they, in theory, could be buying these units below replacement costs. okay, so that’s a positive thing, but everything is selling below replacement costs right now.”
goodman pointed to the provincial ndp government’s rental protection fund, which was supposed to buy up threatened affordable rentals to preserve supply, that he said didn’t do much to make housing more attainable.
he said he would rather see the province and ottawa remove the general sales tax from homes — in a b.c. version of a recent agreement between ottawa and ontario that saves ontario residents up to $130,000 on homes valued as high as $1.5 million.
“we are not criticizing developers. they didn’t ask for this,” said goodman. “when there’s this much friction to get anything done, and we demonize and vilify housing providers and developers and landlords, crushing their business — because that’s essentially what we’ve done — we’ve nuked the industry.”
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