Rustad would slam the door on 300,000 middle-class homes by ripping up B.C.’s Homes for People action plan

SURREY – David Eby unveiled his Opening Doors to Homeownership plan to help thousands of middle-class families break into the housing market every year by financing 40% of the purchase price. This builds on the actions the BC NDP is already taking, which experts say will deliver 300,000 in the next decade.

“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.

When John Rustad launched his campaign, he said it’s not the government’s job to deliver affordable housing. Rustad also promised to rip up B.C.’s country-leading Homes for People action plan–which would block the construction of new townhomes and fourplexes, and lead to 300,000 fewer homes being built in BC.

“John Rustad wants to return to the old status quo that got us into the housing crisis in the first place,” added Eby. “His plan will make speculators richer while raising the cost of housing for families across B.C. At a time when we’re finally starting to see rents come down and homes getting built, this is a risk no one can afford.”

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.

Backgrounder: Opening the Door to Homeownership

The Opening Doors to Homeownership plan will enable thousands of families who otherwise wouldn’t be able to buy a home.

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 Opening Doors to Homeownership plan will provide a ladder into home ownership for thousands of families.