Leader of BC NDP part David Eby has announced his party’s ambitious plan to help middle-class people buy their dream home. He says that if elected, his government will help thousands of middle-class families break into the housing market every year by financing 40% of the purchase price and allowing people to buy units at 60% of market value
The Opening Doors to Homeownership plan will enable thousands of families who otherwise wouldn’t be able to buy a home.
Everywhere I go, families tell me they dream of buying their first home – but decades of rampant speculation in the market has put it out of reach for too many,” said Eby. “Our plan will make that dream come true for thousands of first-time, middle-class homebuyers by substantially reducing the listing price and the mortgage you will pay.”
Eby’s plan would support middle-income families to purchase new homes while adding to housing supply. Land and pre-construction contributions from the provincial government will allow people to buy units at 60% of market value. The provincial contribution is repaid along with a share of the appreciation when the owner sells the unit, or after 25 years, financing the next generation of homeowners.
Using the same model as the Heather Lands partnership with xʷməθkʷəy̓əm (Musqueam), Sḵwx̱wú7mesh (Squamish), and səlilwətaɬ (Tsleil-Waututh) Nations, the plan will enable people throughout the province to buy a home at prices 40% lower than market rates.
David Eby’s plan commits to guarantee up to $1.29 billion per year in financing to home owners to support the development of up to 25,000 new homes for middle-class families over five years. The BC NDP will partner with non-profits, local governments, First Nations, and market partners to identify land and projects for development.
Government financing at the start of the project and the use of no or low-cost land allows builders to offer the units for sale at 40% below market prices.
Buyers only need to secure financing for 60% of the market price. This would mean a two-bedroom condo that would normally cost $1 million would be accessible at a price of just $600,000.
In exchange for the upfront contribution, the Province registers a second mortgage – at no cost to the buyer – for the remaining 40%.
When a buyer sells their unit, the provincial contribution is repaid, plus 40% of the appreciation in the value of the home. This allows the province to recover the full capital costs, as well as all financing costs, and a small return, without imposing costs on the seller.
Roughly one-third of people who buy a condo unit resell them within ten years as their life circumstances change. As people resell their units and repay the government financing, this will create funding that can then be used to support more families to get into affordable homes.
The new program will provide financing for up to 25,000 units over the next five years through partnerships with the non-profit and private sectors. It’s part of Eby’s larger action plan experts say will deliver 300,000 middle-class homes over the next decade. The plan includes action to take on speculators, break down barriers to construction, build more homes and protect renters.
