B.C. is facing a glut of empty condos. Thousands of Metro Vancouver units are sitting empty and some developers are facing insolvency.
Now, some housing experts are questioning a plan by the federal and provincial governments to buy some of those vacant units and turn them into affordable housing.
They say it amounts to a multi-billion dollar bail out for developers who refuse to lower prices to reflect a sluggish real estate market.
“How much of this is really a way of helping out the industry versus, I think, a bail out in terms of bad business decisions by some of these developers?” asked Andy Yan, an urban planner and director of Simon Fraser University’s City Program.
Yan has a lot of questions about the plan by Mark Carney and David Eby to spend up to $3 billion to buy vacant condos in “priority growth areas” and turn them into affordable housing.
Recent data from the Canada Mortgage and Housing Corporation shows that as of last month, there were 4,376 completed condos sitting empty in Metro Vancouver, a 76 per cent increase from the year before.
Yan has crunched the numbers, with his analysis showing that a third of all condos without owners in Metro Vancouver cost over $1 million.
He questions how deep a discount the governments can get to make those units truly affordable.
Local governments in B.C. can tap into $5-billion housing and infrastructure fund
B.C. Conservative MLA John Rustad says the government’s over-regulation of the housing market has added costs for developers, contributing to high prices.
“Only government can tax and regulate an industry into a crisis and then give them a bail out. It’s absolutely ludicrous,” he said.
Carney and Eby pledge to turn vacant condos into affordable housing
Prime Minister Mark Carney said Thursday the government will use the “right financial mechanisms” and take condos that would otherwise sit empty for “potentially for another couple of years” and convert them into affordable housing.
Carney did not say if the government plans to buy up units in bulk at below market value.
Premier David Eby says the program is recognizing that “there is existing housing stock available that’s been built, that people would love to move into, they would love to make it their first home to buy, but they just can’t afford it.”
Part of the $3 billion fund, split equally between Ottawa and B.C., will also be used over the next 10 years to lower the fees developers pay to municipalities.
Carney said by lowering development cost charges for multi-unit housing by up to 50 per cent, builders could save up to $40,000 per unit, and governments would fund infrastructure such as water systems, wastewater systems and local roads.
Chris Atchison, the head of the B.C. Construction Association, says this funding can give builders much-needed certainty, which he argues will create more housing stock.
He said the money gives the sector “confidence that it can go forward with planning and building,” amid workforce and supply chain issues.
Housing non-profits slam ‘catastrophic’ cuts to affordable housing program
On the other hand, Jill Atkey, the head of the B.C. Non-Profit Housing Association, slammed the B.C. government for the plan to help developers — just months after it axed the Community Housing Fund, a decision she said put thousands of affordable rental units in jeopardy.
“To spend public dollars to bail out the condo market or the private development sector, I think frankly is a misuse of public funds,” Atkey said.
‘Catastrophic’ decision to scrap affordable rental program leaves projects in limbo
B.C. Green Party Leader Emily Lowan called it a corporate bait and switch.
“The B.C. NDP axed their $3 billion affordable housing program and left thousands of low-income units half-built. Then they announce a $3 billion handout to the corporations who profit off the housing crisis,” she said.
Lowan says while it’s good the government is buying unsold condos to make them affordable housing, “more handouts to developers” wouldn’t fix the underlying issue.
“And that’s that years of austerity have destroyed the government’s ability to actually build housing,” she said.
