The prime minister and premier revealed new details on Thursday about a joint federal and provincial scheme to buy up more than 2,200 unsold condos in B.C and turn them into affordable housing.
The plan would be to make those condos rent-to-own, with government forking over a small portion and financing covering the balance.
Prime Minister Mark Carney first floated the idea during a June 18 visit to Vancouver. But he included so few specifics that critics and advocates from across the political spectrum filled in the gaps with speculation and denounced the plans. Many, including federal Opposition Leader Pierre Poilievre, called it a “bailout” for developers.
On Thursday, both Carney and B.C. Premier David Eby separately provided some more insight into how the proposed program would work.
Carney says the goal is to buy unsold “distressed” condos at a discount, and turn them into rent-to-buy affordable housing for first-time homebuyers. The federal government would provide about 10 per cent of the financing to make the transaction work, he said.
“These are people, in many cases young families, people who don’t have money for a down payment, but can build in that equity over time, rent-to-buy,” he told reporters in Ottawa on Thursday (June 25).
The overall dollar value of the condos would be roughly $1.45 billion, with the federal government providing about $145 million, according to Carney. B.C. would match this contribution, with the rest coming through financing.
Carney added that no transactions are planned yet, and so those figures could change — and he acknowledged that unveiling the program without enough detail was a bit of a messaging faux pas.
“I don’t think we’ve done — self included — a particularly good job of rolling this out and explaining exactly what it is,” he said.
Carney said that while the idea for the plan came from the B.C. government, he is all for taking advantage of the “opportunity” to buy condos at below-market rates.
Eby said something similar, arguing that it makes sense to take advantage of the fact that many developers “made a bad bet,” and now have unsold stock, especially if the resulting mortgages can become a provincial asset.
He says the federal government had proposed an Ontario-like plan to give buyers a GST break. But this would not help first-time homebuyers who already receive a tax break in B.C., so Eby says he rejected that plan and proposed this new idea.
“The reason why we didn’t pursue the GST exemption is that it would be exclusively a benefit for people who were selling an existing home to move, or they were buying a home as an investment,” Eby said.
He says it is aimed at areas outside Vancouver proper, such as the Fraser Valley, Okanagan and Vancouver Island, because the numbers don’t work out in the city itself.
More information about the plan is still forthcoming, Eby said, and nothing is set in stone at this point.
“We will be releasing details about the proposal coming forward,” he said. “If people hate it. That’s OK, we don’t have to do it.”