British Columbia‘s new initiative to build more homes is getting a big influx of federal cash — and it could get yet another boost later this year if a drop in inflation paves the way for an expected drop in interest rates.
The province’s newly announced “BC Builds” initiative for middle-income earners is getting a $2-billion boost from the Canadian government, announced on Tuesday.
“This will support, at a minimum, 8,000 to 10,000 new homes over the next few years,” Prime Minister Justin Trudeau said at a press conference.
The program unveiled by B.C.’s Premier David Eby earlier this month commits nearly $1 billion in funding and another $2 billion in loans to build affordable “middle-class” rental housing.
The federal government cash will double the low-cost loans to $4 billion with the goal of approving BC builds’ projects in 12 to 18 months.
“On our end, we are working to reduce permitting wait times and eliminating unnecessary red tape that has hampered home building to date,” Vancouver Mayor Ken Sim said.
So far, 20 sites are being developed under BC Builds, four of which are “shovel-ready.”
UBC professor Tom Davidoff sees this as a useful step to help turn government land into much-needed housing.
“The rental market is terrible for middle-income families, particularly (it is) hard to find large-size units,” he told Global News.
“These units will certainly be helpful to middle-class households looking for homes but it won’t provide a home for everybody or even close to it.”
While prices are still rising, inflation slowed last month much closer to the Bank of Canada’s target rate of two per cent.
“We are optimistic that the Bank of Canada will start bringing down interest rates,” Trudeau said.
The Consumer Price Index rose 2.9 per cent in January, following December’s 3.4 per cent hike.
Mortgage costs are up 27.4 per cent and groceries have soared up 3.4 per cent.
“Yes, we’re going to get lower rates. The consensus among analysts is that we’re going to have to wait till June or July,” Michael Campbell said, a Global News financial analyst.
Eby was asked if he has or will call for the Bank of Canada to cut rates.
“They really need to pay attention to what’s happening in B.C. and how families are being hurt here, … what is driving costs here, because I can tell you right now, it’s housing,” Eby responded.
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