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NDP Sticking With ‘Bizarre’ First-Time Homebuyer Program For Now

Fate of BC Liberal program will be decided as part of broad housing strategy says minister.

By Andrew MacLeod 20 Oct 2017 | TheTyee.ca

Andrew MacLeod is The Tyee's Legislative Bureau Chief in Victoria. Find him on Twitter or reach him here.

A program that loans money to first-time homebuyers that the NDP called “completely bizarre” in opposition has survived the party’s first three months in government.

Selina Robinson, the minister for municipal affairs and housing, said the NDP minority government has not decided whether to kill the program.

“Everything is under review and consideration,” said Robinson. “Together with the minister of finance, [we’re] putting together a comprehensive strategy to address the housing crisis, so we’re taking a look at all programs.”

Former BC Liberal Premier Christy Clark and then-housing minister Rich Coleman, now the interim BC Liberal leader, announced the B.C. Home Owner Mortgage and Equity Partnership in December 2016. It loans first-time homebuyers up to $37,500, with no interest or payments required for five years, to help them afford a down payment on homes worth up to $750,000.

At the time, the NDP’s housing critic David Eby, now the attorney general, called the program “completely bizarre.” The loans would further inflate home prices as the government subsidized more people to take on more debt and compete for a limited number of units, he said. “It’s an incredibly poorly thought out policy.”

Green Party leader Andrew Weaver, whose party now holds the balance of power in the B.C. Legislature, in December called the program “a Band-Aid solution that will build an even bigger housing crisis down the road.”

The program is still described as a “featured Government of B.C. service” on the province’s website.

BC Housing continues to administer the program. The most recent publicly available numbers say that by April the program had received some 1,200 applications. A ministry spokesperson didn’t provide updated figures by publication time.

Robinson said the government is looking at the program’s effectiveness.

“Because there are some concerns about it, then we need to make sure it is doing what it was supposed to do, and that’s part of our assessment going forward,” she said. “We’re taking a look at it. Is it hitting its mark, is it doing what it’s supposed to, and that’s really what we’re looking at right now.”

The program is part of a wider review of housing policy Robinson said. “We’re looking at all options,” she said. “I’m not interested in playing... more whack-a-mole, which was the previous government’s style. We’re taking the time to make sure we can do a comprehensive plan that addresses the housing crisis and moves this forward in the right direction.”

This week, the federal government’s Office of the Superintendent of Financial Institutions Canada announced it was tightening lending rules, including a new “stress test” to ensure borrowers would be able to make their payments if interest rates rise.

Federal officials had privately criticized B.C.’s loans to homebuyers saying they would “lure the most vulnerable Canadians” into the Vancouver housing market and make the affordability crisis worse.

Asked how the new federal mortgage requirements would affect the provincial loan program, Robinson said, “All these things bang into one another, so that’s part of taking a careful look and making sure that whatever programs we have are hitting the mark and doing the things that we need them to do in order to address the housing crisis.”

The overall goal is to make sure both renters and owners have housing security, she said.

Finance Minister Carole James said the review of provincial housing programs is part of the preparation for the February 2018 budget.

“A lot of work [is being done] on housing over the fall so that we’re ready for the February budget on all housing options,” she said. “We’re reviewing all of the ideas that are coming forward right now, whether it’s taxation, whether it’s supply, whether it’s demand, we’re reviewing all of those for the February budget.”

As for the loan program, she said, “It’s under review as part of the review package.”

Neither BC Liberal housing critic Sam Sullivan nor Green Party housing critic Adam Olsen was available for an interview Thursday.

Update, Oct. 20, 2017 at 11:00 a.m.: According to government figures provided after this story was published, there have now been 1,395 mortgage loans approved and funded through the program.  [Tyee]

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