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United to Fix Housing

BACKGROUNDER

Rent-to-own

Rent-to-own models allow buyers to press “pause” on the housing market while they save up for a downpayment. Over a period of three years, 100 percent of a buyer’s rent payments would go towards purchasing the home they live in, at the price agreed on at the beginning of the rental contract. Owners will bear the risk or benefit of price changes after signing the Rent-to-Own contract. The following are illustrative examples based on a $600,000 and a $900,000 unit, with a 12 percent downpayment:

Rent-to-Own has been used by local developers but needs a bold and supportive provincial government to truly expand the model as an affordable housing option. A successful example is 50 Electric Avenue in Port Moody, constructed by Panatch Group. This project saw roughly 10 percent of the units in a 358-unit project marketed as Rent-to-Own. To ensure widespread participation in the program, government financing will cover carrying costs to ensure homebuilders stay whole financially during the rent-to-own period. BC United will partner with homebuilders using this model by further leveraging the borrowing power of the province to do so at a larger and more affordable scale. The Rent-to-Own program will require 15 percent of all eligible units to be rent-to-own.

Property Transfer Tax Relief

With sky-high housing prices, too many first-time homebuyers don’t qualify for any tax relief. To fix this, BC United will expand the first-time homebuyer’s incentive to apply to the first $1 million on a home purchase. This will ensure that nearly all first-time homebuyers get a break on starting their first home and save up to $18,000 in Property Transfer Taxes. A recent report from RE/MAX found that there are only 43 properties in all of Vancouver that would qualify for the current first-time buyer’s incentive. As a result, sky-high housing prices are driving families out of the province, with many young families and retirees leaving for Alberta.

BC United will also launch a thorough review of the current PTT thresholds to ensure they reflect current market realities going forward.

99-Year Leases on Government Land

Government should make land available to fight the housing crisis. BC United would partner with a spectrum of market and non-market housing developers to deliver affordable rental housing on both vacant and underutilized government land. In exchange for a 99-year lease at the nominal price of one dollar per year, BC United will require rental housing to be built at below-market prices. The land will remain in public ownership while delivering housing for multiple generations.

PST Relief on New Home Construction

While PST is not charged at the point of sale for new housing, it accumulates on the cost of materials while a home is built. In Vancouver, which has the highest construction costs in the country, PST relief would save over $2 million on the cost of a 350-unit apartment tower and over $150,000 for a six storey wood-frame condo. BC United will enable homebuilders to apply for a PST rebate on their construction costs after homes have been occupied.