The article you just read was brought to you by a few thousand dedicated readers. Will you join them?

Thanks for coming by The Tyee and reading one of many original articles we’ll post today. Our team works hard to publish in-depth stories on topics that matter on a daily basis. Our motto is: No junk. Just good journalism.

Just as we care about the quality of our reporting, we care about making our stories accessible to all who want to read them and provide a pleasant reading experience. No intrusive ads to distract you. No paywall locking you out of an article you want to read. No clickbait to trick you into reading a sensational article.

There’s a reason why our site is unique and why we don’t have to rely on those tactics — our Tyee Builders program. Tyee Builders are readers who chip in a bit of money each month (or one-time) to our editorial budget. This amazing program allows us to pay our writers fairly, keep our focus on quality over quantity of articles, and provide a pleasant reading experience for those who visit our site.

In the past year, we’ve been able to double our staff team and boost our reporting. We invest all of the revenue we receive into producing more and better journalism. We want to keep growing, but we need your support to do it.

Fewer than 1 in 100 of our average monthly readers are signed up to Tyee Builders. If we reach 1% of our readers signing up to be Tyee Builders, we could continue to grow and do even more.

If you appreciate what The Tyee publishes and want to help us do more, please sign up to be a Tyee Builder today. You pick the amount, and you can cancel any time.

Support our growing independent newsroom and join Tyee Builders today.
Before you click away, we have something to ask you…

Do you value independent journalism that focuses on the issues that matter? Do you think Canada needs more in-depth, fact-based reporting? So do we. If you’d like to be part of the solution, we’d love it if you joined us in working on it.

The Tyee is an independent, paywall-free, reader-funded publication. While many other newsrooms are getting smaller or shutting down altogether, we’re bucking the trend and growing, while still keeping our articles free and open for everyone to read.

The reason why we’re able to grow and do more, and focus on quality reporting, is because our readers support us in doing that. Over 5,000 Tyee readers chip in to fund our newsroom on a monthly basis, and that supports our rockstar team of dedicated journalists.

Join a community of people who are helping to build a better journalism ecosystem. You pick the amount you’d like to contribute on a monthly basis, and you can cancel any time.

Help us make Canadian media better by joining Tyee Builders today.
We value: Our readers.
Our independence. Our region.
The power of real journalism.
We're reader supported.
Get our newsletter free.
Help pay for our reporting.

BC’s Interest-free Loan Offer for New Homebuyers ‘Bizarre,’ Says NDP Critic

Move comes amid fears of high personal debt, and as feds tighten mortgage rules.

By Andrew MacLeod 15 Dec 2016 |

Andrew MacLeod is The Tyee’s Legislative Bureau Chief in Victoria and the author of A Better Place on Earth: The Search for Fairness in Super Unequal British Columbia (Harbour Publishing, 2015). Find him on Twitter or reach him here.

The British Columbia government has announced it will loan first-time homebuyers up to $37,500 with no interest or payment necessary for five years to help them afford a down payment on homes worth up to $750,000.

The move to match what buyers have saved for a down payment comes amid worries that many Canadians already carry too much debt, and while the federal government has been tightening mortgage rules in hopes of cooling off the housing market. Critics say B.C.’s plan moves in the opposite direction.

“I firmly believe that the dream of home ownership must remain within the reach of the middle class here in British Columbia,” Christy Clark said Thursday in an announcement made at a townhouse sales centre in Surrey.

“We must make sure it is easier for first time homebuyers to find their way into a really tough housing market right here,” she said. “People need a partner in scraping up that first down payment and our B.C. government wants to be your partner if you want to buy your first home.”

To qualify for the program, people will have to have lived in B.C. for at least a year and have been a Canadian citizen or permanent resident for at least five years. Their household income will have to be below $150,000 a year and they will need to demonstrate they’ve paid taxes for at least two years.

The loans will be for 25 years, with interest set at prime plus half a per cent after five years. With the loans available starting in February 2017, the government is not putting a cap on participation but expects some 42,000 households to take advantage over the following three years and estimates it will loan about $700 million through the program.

A spokesperson for the Canadian Mortgage and Housing Corporation, a federal agency that has warned about the danger of high housing prices in Vancouver, avoided commenting directly on Clark’s announcement.

“Our concerns with particular housing markets are well known,” spokesperson Karine LeBlanc said in an email. “Our Housing Market Assessment has identified strong evidence of problematic conditions in Metro Vancouver. Continued price growth is of particular concern.

“While the CMHC is committed to helping Canadians meet their housing needs,” she cautioned, “We encourage all aspiring homebuyers to make informed and responsible homebuying decisions that don’t put their financial futures at risk, especially in a market that is showing signs of overvaluation.”

NDP housing critic David Eby called the province’s announcement “completely bizarre.”

He said the loans would push prices up as more people would be able to compete for a limited number of units. “It’s an incredibly poorly thought out policy,” he said. “This announcement does nothing about supply... No additional housing has been created.”

He said that while many buyers will likely welcome the announcement, it really is a gift to condo developers, real estate agents, mortgage brokers and lenders.

A recent report from the OECD warned that high indebtedness, particularly related to the Vancouver and Toronto housing markets, threatened the Canadian economy, Eby said. “Our provincial government’s response is to encourage people to take on more debt and to subsidize that debt. It’s bizarre.”

Green Party leader Andrew Weaver called the policy short-sighted and irresponsible in a prepared statement, and observed that the larger problem is that homes cost too much in the province. “Instead of tackling the real problems that are causing out of control housing prices — like deregulation and speculation — the government is announcing a band-aid solution that will build an even bigger housing crisis down the road.”

When reporters asked Clark about contributing to already high debt loads, she said, “We should all be concerned about the level of debt overall in the country. We’re one of the most indebted nations in the world, we need to pay attention to that, but in the meantime we should also pay attention to making sure British Columbians can own a home.”

Nor did she expect the loans would inflate prices further, she said, “Our analysis tells us that it won’t because everybody who’s going to be eligible for this program will have to have been accepted for a mortgage already. They’ll all be people who can afford to buy a home.”

Ken Dreger, an accountant with Joseph Lea and Associates in Nanaimo, said, “I think it’s foolish.”

Enabling people to take on more debt means many more people will be vulnerable if there’s a correction in the housing market. “We’re in a terrible pickle and this just pushes it further,” he said. “It’s a terrible decision.”

The federal government has been taking steps to make it more difficult for people with small downpayments to qualify for a large mortgage, Dreger said. “This goes counter to the whole federal changes,” he said. “It just undermines it. Why is a province undermining something that’s supposed to stabilize the housing market?”

The Globe and Mail recently reported that in 2015, residential construction and real estate services made up 21 per cent of B.C.’s GDP and that since 2011, 35 per cent of the province’s GDP growth has been from the two sectors.

Observed Dreger, “The B.C. housing market’s become too big to fail.”  [Tyee]

Read more: BC Election 2017

Share this article

The Tyee is supported by readers like you

Join us and grow independent media in Canada

Facts matter. Get The Tyee's in-depth journalism delivered to your inbox for free


The Barometer

Tyee Poll: Are You Preparing for the Next Climate Disaster?

Take this week's poll