Real estate developers in British Columbia are pushing back against a new federal-provincial program to buy up empty condos, asserting that the industry did not request such a bailout and that it will not help their sector. The Urban Development Institute (UDI) and other groups say they would rather see the government remove the GST on new condos or cover part of the purchase price for buyers.
Program Details and Developer Response
Two weeks ago, Premier David Eby and Prime Minister Mark Carney announced a plan to purchase more than 2,200 unsold condos across the province to provide affordable housing. Last Thursday, they revealed that the program has a total budget of $1.45 billion, with B.C. and Ottawa each contributing $145 million. The remaining funds 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 down payment.
Rick Ilich, CEO of Townline Homes and chair of the UDI, 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?” Ilich said.
Alternative Proposals from Developers
Ilich said he would rather the provincial government implement its 2024 campaign promise to cover up to 40 per cent of the purchase price on 25,000 units over five years to help middle-income families break into the market. This approach would directly support buyers without government taking ownership of the properties, he argued.
Eby and Carney have both admitted they could have done a better job communicating the program details. Carney said it was something the province asked for, while Eby said Ottawa wanted to roll it out before it had been finalized.
Government Stance and Criticism
Acknowledging criticism that the plan could be a bailout for developers, Eby has said the program is not structured to help developers who made bad business decisions. “If people hate it, it’s OK, we don’t have to do it,” he added.
B.C. Housing Minister Christine Boyle said the goal is to allow people who cannot afford a down payment to purchase a home. “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,” Boyle said. “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 down payments, they’re locked out of home ownership. The program we’re designing looks to support British Columbians like that of all ages.”
Campaign Promise and Pilot Project
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. The government continues to explore other measures to address housing affordability without bailing out developers.
