Our government believes that all British Columbians should have a place to call home, whether it’s through home ownership or renting.
In recent years, restricted supply of units for sale or rent, combined with low rental vacancy rates, has caused market conditions to tighten and prices to rise – significantly in some cases. While that points to British Columbia’s position as a desirable place to live, it also means it’s more difficult for first-time homebuyers to get into the market.
There’s no easy fix for this, but our government is taking action to help first-time homebuyers get their foot in the door. We’ve created a new program specifically to help first-time buyers to get into the market. Through the BC Home Owner Mortgage and Equity Partnership (BC HOME Partnership), the provincial government will contribute to the amount first-time home buyers have saved for their down payment, providing up to $37,500, or up to 5% of the purchase price, with a 25-year loan that is interest-free and payment-free for the first five years.
If you’re saving for your first down payment, it might sound too good to be true. From our perspective, it’s a practical step to help first-time buyers achieve stable and affordable housing for themselves and for their families. And that’s vital to our future growth as a province.
Why? Because we know owning a home contributes to financial security and stability. It helps insulate owners from rising house prices, offers the flexibility in later years to borrow against the equity in their home if they choose to. It also allows first-time buyers to put down roots in the communities where they live, work and raise their families.
The approach will help both new buyers and those looking to rent. First-time buyers will be in a better position to purchase a home, while people looking to rent will gain access to the units that become available thanks to BC HOME Partnership.
The BC Home Owner Mortgage and Equity Partnership will help an estimated 42,000 first-time homebuyers in British Columbia access $703 million in loans over the next three years. The funding will come from the new Housing Priority Initiatives Special Account designed to fund innovative housing programs and projects throughout the province. The program itself will be administered by BC Housing.
Ensuring the dream of home ownership remains within reach of the middle class is a key part of our approach to housing affordability, along with increasing housing supply, smart transit expansion, supporting first-time home buyers, ensuring consumer protection and increasing rental supply.
The BC HOME Partnership builds on the other steps our government has taken to give all British Columbians access to housing. Since 2001, we have invested $4.9 billion to provide affordable housing for low-income individuals, seniors and families. In fact, about 6% of B.C.’s total housing stock is government-assisted housing with various levels of support. More than 104,000 B.C. households benefit from a diverse range of provincial housing programs and services.
In September 2016, we announced a $500-million investment that includes the creation of 2,900 units of affordable rental housing for a wide variety of people in need. This builds on our investment of $355 million to create 2,000 new rental units, announced in February 2016, committing a total of $855 million to nearly 5,000 units of housing around the province.
Through the BC HOME Partnership program, the Province expects to help an estimated 42,000 B.C. households enter the market for the first time. If this program enables even half that number of households to move from renting to owning a home, we could free up 20,000 units of much-needed rental stock in this province. By contrast, for government to create 20,000 one-bedroom rental units would cost the province $7 billion (assuming a cost of $350,000 per unit). This is a drastically higher cost than the $703 million we are investing through the BC HOME Partnership program.
We are confident that the new BC HOME Partnership will help turn the dream of home ownership into a reality for many British Columbians. We expect that an estimated 42,000 first-time buyers will become homeowners with help from this program. That’s great news for those about to get into the market. But it’s also a boost for the economy, and that’s great news for all British Columbians.