Another day, another plan from a provincial government to do something, anything, to build more homes.
What happened: The federal government is chipping in $2 billion worth of loans for B.C.’s new BC Builds program, aimed at boosting the construction of affordable rental housing for middle-class renters. The province had already set aside $2 billion of its own for financing.
- The $2 billion helping hand from Ottawa comes from the national Apartment Construction Loan Program — which the feds will bolster by $15 billion starting next year.
Big picture: BC Builds aims to spur the creation of up to 10,000 new units within its first five years by offering loans to developers and other groups. It also aims to drastically reduce building times by building on underused properties, some of which are owned by municipalities.
- As home to the city with the country’s least affordable rent (no shade, Vancouver, we love you), B.C. should be an interesting testing ground for this type of program.
Why it matters: B.C.’s new program targets two of the top impediments to increasing the housing supply: the fact that building is flippin’ expensive and it takes a long time. The province hopes that generous loans and expedited approvals will help alleviate these issues.
- Building a home in Canada is more expensive than ever, with the average cost of building residential housing up ~58% between the start of 2020 and the end of 2023.
Yes, but: The program unfortunately can’t address the root causes of why building is so expensive, namely severe labour shortages, rising materials costs, and government fees.—QH
To learn more about why the cost of building is so high and what can be done about it, listen to our chat with construction sector expert Russell Hixson on Free Lunch by The Peak.