B.C. Premier David Eby clarified some more details of a government proposal to purchase condos for a rent-to-own arrangement, saying it ultimately bears no cost on the taxpayers<\/p>\n
A week after Prime Minister Mark Carney announced a joint government program proposal to buy new unsold condos in B.C., more details have emerged, including the fact the \u201crent-to-own\u201d concept came from the provincial government.<\/p>\n
Carney told media Thursday morning in Ottawa that the program was “initiated” by the provincial government and the cost to purchase 2,200 new unsold condos in B.C. will be about $1.5 billion with the federal government contributing 10 per cent.<\/p>\n
Hours later, B.C. Premier David Eby confirmed to Business in Vancouver at a news conference in Vancouver that his government conceived the plan.<\/p>\n
Eby said Carney made $300 million of new money \u201cavailable\u201d for housing programs in the province \u201cand the proposal on the table was what they had done with Ontario, which is to eliminate the GST on new homes.\u201d<\/p>\n
Eby said that proposal was \u201cthe preferred solution of the development industry\u201d and would only assist people who were already in the housing market, since a GST exemption on new homes already exists for first-time homebuyers.<\/p>\n
Instead, Eby said his government proposed a plan to use half of the federal funds to buy the new unsold condos for the cohort of British Columbians who can\u2019t afford down payments yet and still pay high or substantial rents.<\/p>\n
\u201cWhat we see as an opportunity right now is the chance to buy products below the cost of construction, below the cost of what government can build before, and make them available through a rent-to-own program,\u201d said Eby, noting purchases will not be made in Vancouver, because \u201cthe numbers don\u2019t work.\u201d<\/p>\n
Eby said his government will be targeting distressed condo assets, such as projects that are in foreclosure, hence developers will not profit from the purchases.<\/p>\n
Eby said both the federal government and provincial government will both contribute $150 million, so the program has $300 million as a deposit for financing and upfront costs.<\/p>\n
\u201cThis comes at no ultimate cost to taxpayers because the mortgage is an asset for taxpayers,\u201d noted Eby.<\/p>\n