British Columbia Hatches $1.5 Billion Loan Plan to Boost Homebuilding

(Bloomberg) -- British Columbia’s government launched a program to accelerate the construction of thousands of affordable homes, backed with a C$2 billion ($1.5 billion) lending commitment and C$950 million in spending.

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BC Premier David Eby said the new body will identify owners of low-cost land, bring them together with contractors and developers, then work with local governments to expedite planning approval.

The provincial government will then offer low-interest financing for new residential developments and grants to nonprofits and First Nations development corporations. The goal is to have at least a fifth of homes under the program made available for rent at rates at least 20% below market, without ongoing government subsidies.

The initiative underscores the acute housing shortage in British Columbia — a problem shared across Canada and other major North American and European cities — and the growing political urgency to do something about it. British Columbia, Canada’s third most-populous province with about 5.6 million people, is expected to hold an election in October, while a national election is expected in 2025. Conservative Leader Pierre Poilievre, who’s Prime Minister Justin Trudeau’s main opponent, has built a sizable lead in polls in part due to public frustration over housing costs.

Read More: Housing Minister Banks on Canada Rate Cuts to Spur Building Boom

The private sector has failed to build enough affordable housing, a problem not helped by inflation, interest rates and land costs, the BC government said in a statement.

At a speech in Vancouver, Eby announced an initial project for the plan, known as BC Builds, made up of 400 housing units, with “thousands more units to come.” All units will be income-tested and aim for rents equal to no more than 30% of the earnings of a middle-income household, with overall rents equal to or lower than market rents.

BC Builds has set a goal of cutting the time between concept and construction to 12 to 18 months, down from a typical three to five years.

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