British Columbia invests $ 2 billion in low-interest loans for builders of affordable housing

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VICTORIA – The government of British Columbia is investing $ 2 billion in a low-interest loan program for builders of affordable housing.

Housing Minister David Eby said on Thursday the funding would be made available to private developers and community groups through the province’s HousingHub program, a division of BC Housing.

The funding will target projects for tenants and buyers with an average household income of $ 75,000.

Eby said the loans will be made at lower than market rates and that in return developers will commit to passing the construction savings on to residents through more affordable rents and housing prices.

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The loans will be repaid once construction is complete, allowing HousingHub to reinvest in more units, he added.

Finance Minister Selina Robinson said the funding was part of the 2021 budget, which will be unveiled in full next week.

“For too long, housing in British Columbia has been viewed as a commodity and a tool for creating wealth, rather than a basic necessity of a home,” said Robinson, who was Minister of Housing before take charge of the finance portfolio.

“The simple truth is that affordable housing changes lives. “

In order to ensure that the savings are passed on to residents, each developer must make a 10-year commitment around affordability. The agreements signed are specific to each project, Eby said.

Funding rates will depend on factors such as a developer’s credit rating and relationships with banks, he said.

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BC Housing has already received around 90 applications from builders interested in obtaining a loan, he said.

“There is a lot of demand and competition for funding,” Eby said.

Applications will be prioritized based on maximizing affordability, such as the number of units and the unit price offered to tenants or buyers, he said.

Developments will also be assessed through a geographic lens to ensure that the benefits of the program are felt throughout the province.

“There really isn’t a community in our province that isn’t facing some aspect of the housing crisis, although it looks different in different communities,” Eby said.

Paul Kershaw, associate professor in the School of Population and Public Health at the University of British Columbia, said HousingHub is a positive and important program.

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The program has seen private developers partner with nonprofits to provide the housing, which is an effective way to ensure the supply is affordable for middle-income households, Kershaw said.

But the increased supply would have to be complemented by other policy measures if the government is serious about stemming the escalation in the housing market, he said.

“Everything that is built and offered again in a context where…

Complementary measures could include similar low-interest loans aimed at boosting other sectors of the economy, such as small businesses, he said.

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British Columbia is in dire straits as 18 percent of BC’s economy is made up of real estate rental and leasing, yet only two percent of the population is employed in this sector, Kershaw said.

“It’s a huge gap and therefore, that’s why there is strong growth in this industry, but it doesn’t generate income that is spread over a whole bunch of people,” he said. .

Opposition liberals have said soaring house prices during the pandemic shows the NDP government’s housing plan is failing.

The party referred to a report by the BC Real Estate Association which found that the average price of homes in the province rose 20.4% last month compared to the same period last year. At the same time, active residential listings fell 24.4% as the housing supply fell to its lowest level in decades, he said.

“It is clear that the NDP’s supposed affordability solutions have had no significant effect on the housing market,” said housing critic Ben Stewart.

“Young British Columbians still see their dreams of home ownership fading away as this government wins an undeserved victory.

– By Amy Smart in Vancouver.

This report by The Canadian Press was first published on April 15, 2021.