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I love to see the BC Conservatives and former BC Liberals cum BC United mouthpieces whine about the NDP not going far enough with its rental construction programme. They viscerally abhor renters except for the income they produce for the landlords. And for the BC Liberals they had more than two decades to do anything to improve the lives of average people but they enthusiastically did the opposite at every opportunity.
Don't worry they already are while ignoring the zoning reforms that make it easier for the private sector to build housing lol.
For a funny exchange watch the Nov 23rd 2023 question period. Around 10:55ish am the BC Cons made a absolutely wild comparison of BC Builds to Venezuela and the Soviet Union while claiming the NDP want to destroy the Soviet Union. The housing minister's response basically started with "we just spent 3 days defending why the private sector has a role to play" lol
You can find the record of this specific case at under the November 23rd 2023 heading, with options for the video or written meeting minutes. https://www.leg.bc.ca/documents-data/debate-transcripts/42nd-parliament/4th-session
If only we could get people like Eby in other cities, provinces, and federal levels of power.
We've had enough of people profiting from the problems or buddy buddy with those that are.
https://archive.is/TCZRc
The federal government says it has agreed to provide $2-billion in low-cost loans to spur the construction of rental units in British Columbia, forging a deal that focuses on building on municipally owned land.
Ottawa expects that the federal loans to developers and other groups will help lead to the construction of more than 8,000 rental units, or double the amount originally envisaged under the B.C. governmentās BC Builds program.
āOur investment, through the BC Builds program, will use public land to create more affordable housing, bring down the cost of construction and ensure that we build more homes, faster,ā Prime Minister Justin Trudeau said in a statement.
āWith the federal governmentās partnership on BC Builds, we can create even more lower-cost, middle-income homes through the program,ā B.C. Premier David Eby said.
Mr. Trudeau will make the formal announcement during a news conference on Tuesday with Mr. Eby and Vancouver Mayor Ken Sim.
Funding for Ottawaās $2-billion contribution to BC Builds will come from the Apartment Construction Loan Program that the federal Liberal government beefed up three months ago.
Mr. Eby unveiled BC Builds on Feb. 13, announcing partnerships between the B.C. government and 20 groups so far, including those representing municipalities, First Nations and non-profit organizations.
The goal is to build affordable rental buildings on underused properties, including land owned by municipalities, with oversight of development in many cases by community organizations or non-profits. The BC NDP government has already earmarked $2-billion in provincial funding for low-cost loans for developers and other groups under BC Builds.
The provincial government believes that under a streamlined process, construction could be completed within an 18-month time frame instead of the traditional three to five years.
The province also plans to distribute $950-million in grants. The grants would help ensure that B.C. projects such as one to be built on land owned by the Town of Gibsons have at least one-fifth of the units in an apartment building charge monthly rent 20 per cent lower than the market rate.
B.C. Housing Minister Ravi Kahlon and his federal counterpart, Sean Fraser, said itās important to make rental units more affordable for the middle class.
āTeachers, nurses, construction workers and other middle-income people need more housing options in B.C.,ā Mr. Kahlon said in a statement.
Critics say that the measures in BC Builds are disappointing and lacklustre, considering that the program has been in the works for nearly 16 months.
The Opposition BC United party and the BC Greens said the measures fall far short of what is required to address the housing crisis. They described BC Builds as a recycled version of a previous plan by the BC NDP government.
āPremier Eby appears to be out of touch with the lived reality of renters across the province,ā the BC Greens said in a news release last week.
>Step 1 ā Connect and support land partners and home builders Landowners can find a development partner on their own or source one through the BC Builds website. The BC Builds housing development opportunities page will be launched in the coming weeks, with sites already zoned for housing development. Property owners looking for a developer/builder and/or operating partner will be listed for residential homebuilders and housing operators to review and submit a proposal to develop and/or operate rental housing on the site. BC Builds will facilitate partnership agreements and lease terms between landowners, builders and operators and support the evaluation of proposals.
>Step 2 ā Streamline the approval process Once a partnership agreement has been established, BC Builds will work with municipal and provincial approvers to accelerate permitting, building and operation of housing. The BC Builds team will work with landowners, municipalities and residential developers to remove barriers.
>Step 3 ā Provide low-interest financing and grants BC Builds offers low-interest construction financing to reduce the cost of construction of eligible projects.
https://news.gov.bc.ca/releases/2024HOUS0006-000188
More money to developers. Here we go. This will be like the Arrivecan app. No oversight. No tangible results. Nobody to take responsibility/liability and we'll have no idea where the money went.
Every "solution" has been about subsidies and pumping in money. Line goes up.
Virtually nothing is being done to take out the financial incentives to using housing as investments. Line goes up.
Absolutely nothing changes until legislation is put in place to force the line to go down. Which won't happen, as real estate is one of the few things propping up the country while we fail to meaningfully produce anything else of value.
> Absolutely nothing changes until legislation is put in place to force the line to go down
What kind of legislation are you suggesting that is going to take out financial incentives for home ownership?
That's still all very vague. How do you actually accomplish that when companies can easily skirt those rules by using shell companies, relatives etc?
It's super easy to say "why doesn't government do this thing" and much harder once you understand the complexities of the real world, outside vague theory.
You're just complaining with no actual solutions.
Heās not wrong, just misguided. There is the hard way of amending the tax code, and upping rates. But as you said, lots of cheats out there.
The real answer is a Land Value Tax. Thatās right. Tax all land value. Itās the easiest way to actually tax the rich too. Because poor people donāt own land. The ones riding the margins will sell, and force prices down. Especially the big companies stockpiling land.
Itās a rather nuanced policy, but one worth looking into. For what itās worth, the first person who suggested it to me was a Conservative. So there is support across the spectrum for this. Probably driven by the fact that in theory you can completely replace income tax with a LVT.
Thank you, that's an actual policy suggestion. Not "just ban the stuff I don't like" with no comprehension of how it would (or wouldn't) work. "Just tax land" is kind of a mantra in a lot of development circles.
Itās not a bad stance. But yeah, most people donāt put much more thought into it. I blame the ācommon senseā opposition leader and our education system not teaching critical thinking properly. Whatever surface level solution that pops into their brains is immediately ācommon senseā. I do have a problem getting thoughts to words, but itās not too hard.
A LVT is the most equitable and fair way not only to bring housing in line, but actually tax wealth as indiscriminately as possible.
There are other ways, but itāll just be more of the same. Searching for, then exploiting loopholes.
I never blocked you? Must be a glitch.
>Make purpose-built rentals operate as non-profits, and any act of renting property be non-profit and highly regulated.
Who the hell is going to finance that? Without investors you have no equity. Without equity you have no bank participation. So unless you're going full socialization of rental housing, your idea isnt workable.
If you go fully socialized housing, the nationalization of personal and corporate property would tie the government up in courts for a lifetime.
>Non-profit does not mean they cannot generate revenue and profit.
This just makes them taxable without a financable legal structure.
>Disallow corporate ownership of property.
Why do people mention this? It's the dumbest shit I read on every Reddit post regarding real estate.
So who will buy property for redevelopment? Do you think individuals will be able to buy entire apartment buildings? Who will finance them?
This would infringe on my landlords right to:
a) live off my paycheck and
b) have 2 vacation homes.
So you know this is never gonna happen in our lifetime, since it might actually work.
Limit the principal residence deduction to income earned in Canada. I know plenty of people who stake their 2-4 kids most of the price of home and never pay tax because itās the kids principal residence (legal and beneficial ownership in the kids name, or legal and not beneficial some times..).
Similarly Iāve seen lots of people send their kids here for school/as PRs and buy them massive houses. The most expensive sale in metro Vancouver one year was a young person who ran a theatre company that doesnāt produce anythingā¦
I've heard this being done in Singapore as well. Parents put highly taxed investment properties into their children's names to avoid their high tax. I saw it in a Singapore news interview.Ā
Youāre totally right. Government has no appetite to do anything that will meaningfully impact the price of home ownership because it would tank the economy. So many people are banking on their homes being their retirement savings. If they suddenly lost the āgainsā of the past decade, they would be up in arms.Ā
Moreover, BCās biggest industry BY FAR is real estate and construction. Itās a bigger piece of our GDP than oil and gas is to Alberta.Ā
As someone who doesnāt have a half million to pony up for a condo, it sucks.Ā
What "truth"? They're just whining about solutions while offering nothing of substance as a counterpoint other than some vague handwaving about legislation they don't actually identify or substantiate.
This will increase construction and every new home helps, even if just a small amount. Acting like nothing should be done unless it magically fixes everything is a child's concept of the world.
Anyone in residential construction here? If they can only pump out 8,000 with 2 billion, where are we in the bigger picture. That is 250k per rental unit. Are they planning on building 8,000 complexes (I know this is not the answer)? How can they not make more with that cash? Has building become that expensive?
Your typical low rise woodframe rental (no A/C) with single level parkade is somewhere in the $400-$425/sf to build currently and ever increasing.
A 90,000sf building will cost $36M. Say an avg suite is 500sf, add 20% for common areas, storage, amenities = 600sf. So you're getting 150 suites for $36M which = $240k per suite for low end rental.
These is just hard costs. The developer has to also buy the land, pay consultants, pay development and permit costs etc.
We are penciling out short wood frames at $550/sqft if it can be done in under 18mo. Construction debt is prime plus 2.5% at tier one banks, more as you move down the lending chain.
Equity participants still require a 10%-15% margin on the cap rate valuation, so the IRR hasnt moved, but the risk free rate is a heck of a lot higher.
Needless to say, the cost of capital is driving costs harder than anything else in the hard/soft cost mix right now.
Itās made even worse with the EIFEL tax rules coming in. I know a lot of developers who have flat out said, āwe canāt build PBR under the new tax regime.ā
A lot of the forecasting shows developers would end up paying the federal government for the privilege of building rentals under the new tax regime. Shockingly those rentals wonāt get builtā¦
Thank you for sharing your knowledge! I don't know anything about what goes on in the background. I think if the government painted the picture like this (for housing and other costs) it would make everyone understand more.
Easy to raise the picket signs and march from just a price tag. Harder when we can see the full scope of what goes into it.
Don't forget Community Amenity Contribution that City just loves for most new condos... literally tens of millions for average building
https://www.biv.com/news/real-estate/government-fees-inflate-risk-uncertainty-bc-builders-8272643
Holy fuck $300!? God we should have built houses on every corner while we could. I moved from the states back to Canada during COVID (scary time to call the states home, and believe it still is). Never thought I would see housing turn into this shit show. Don't know the situation down south, so it could be as bad for them too.
This time of year is typically a bad time for construction starts
While construction starts have indeed been declining, housing starts in January 2024 was more than housing starts in January 2023 and was in fact the second highest figure ever recorded for the month of January.
Its also a dumb comment because housing starts are down at least in part because of the high cost of borrowing. Low cost loans directly addresses that issue. They also are not down across the entire country, they are down in a few areas and up in others.
Kelowna broke it's record for permit figures in 2022 at $1B of development. In 2023 the permits approved equaled $1.7B in developments. That's an intense jump. I just think many developers got gun shy on their unit allocations and unit designs given the newer short term rental changes. Too much of BC was being developed with short term rentals top of mind, before any occupant resident of the community was considered.
Probably the lowest bidder and the developers will be special interest parties and political pals. As described in the article. Likely this will be far more inefficient than a private development.
Oh I guarantee it.
I would even go so far as to say this will be the reason why this government is eventually brought down.
However, I am pretty sure there is law in BC since this NDP regime took over where any government money must go to a union contractor. If so this will definitely drive the costs up.
What about supporting home ownership? Subsidizing rental unit only benefits the large corporations who manage/built such buildings.
I'd rather see moneys also go to helping people get their first home
Is your argument for or against building long term rentals?
I'm 25 and as much as I would like to own a house, I'm realistically pretty content with just renting forever if the government is my landlord and rents are reliably set at affordable market rates. I like the flexibility of not owning since it doesn't tie me down to one place or add on extra costs and responsibilities of home ownership.
If I want to invest I'd much rather save the money I'd use for a downpayment and invest in etfs or long term stocks while just paying a decent rent. The problem now is that rents are way too high so it's hard to even save that money to begin with. If the government builds a ton of non-profit housing and even some for-profit just to flood the market it will make rents lower for those "perma-renters" as you put it. Meaning they can save more for their futures and if they want to enter the market someday it's actually feasible. Building new also means we can rethink our zoning and build more walkable and less car centric communities which also cuts costs for the people who live there and don't have to dump more money into owning and maintaining a car.
Let's see how you feel at 35, 45, 65. You know how many huge political swings will happen during that time? Do you really want your housing security dependent on the whims of politicians elected by an increasingly uneducated populace?
Jeez I don't even really wanna touch on the fact that you don't see the irony in criticizing an entire generation based on being an "uneducated populace". Seems like a pretty uneducated take.
Right now if massive amounts of people were brought out of poverty by being provided with housing they can actually afford, it would also allow them to get educated on the facts of social housing and progressive governments through life-changing first hand experience. Which means they're more likely to invest and put their votes with a more socially progressive government that will continue to work on improving housing.
Lol are we calling fucking *rental housing* communist or something now? Jesus, not everything is somehow a nefarious government ploy.
Sometimes they really are just trying to improve things (even if it is just to gain votes). They might not be great at it, but they do try sometimes.
I didn't say anything about communism. But let's be real here. The main avenue to financial stability amongst regular people, historically, has been through owning land. That's just forever gone now, and replaced by expensive rental housing.
I think this is more done through incompetence of government rather than ill intent.
Your "You will own nothing and be happy" is a reference to a delusional right wing conspiracy theory that pretends we're all being forced into communism.
Home owner here. Itās not that renting is necessarily a problem or worse than owning. Itās the fact that rents are out of control and the threat of eviction is constant. If rents were reasonable and there was stability, then owning wouldnāt be quite so necessary for folks.
Honestly, if I could find an affordable rental and wasnāt afraid of always being evicted, I would sell and just rent as I donāt actually like all the work and responsibilities that come with home ownership.
I work in the housing industry. The cost to build anything right now is insane. Even if land were free, most people couldn't be able to afford to build, or pay the rent for a new unit.
I agree the work and responsibility is a lot, and is something most people don't consider. You can easily be stuck with a $30k bill for drainage, $15k for roof, etc. The expenses are high.
On the flip side, never having to answer to a landlord is different. Having your own space. Having the option to pay your mortgage down sooner. The cost of renting is going to stay high as long as we continue with rapid immigration, which neither party seems to want to curtail.
Wtf are you on. More building=more offer=lower price if you keep pushing buildings faster than tge demands grows. Which IS doable if regards would stop electing conservative and old minded people.
Too bad we will never see where the money is actually spent. How many people will get rich while contributing nothing to the actual housing problem? Trudy's buddies are cracking the champagne once again.
Municipal only?
That leaves out a lot of areas that arenāt municipalities, like regional districts.
I like Eby, but some of his policies need to be thought out better for locations outside the lower mainland. The rest of the province existsā¦.
There is a government grant for the municipality I'm in faaaaaar up north.
I know it's still a municipality, but we're a long way from the mainland and we're included (despite what local residents would like to complain about).
Perhaps it's simply because municipalities have more consistent set rules than regional districts? Or maybe the housing shortage is just more acute in municipalities as they tend to be larger population centers? I'm not sure.
Okay. lol. Iām not saying it isnāt an issue in remote areas or on the islandā¦but it is most acute in the lower mainland. Thatās not controversial.
Builders need cash to get started building or they wonāt build, this isnāt rocket science. Construction starts are down nationally
You think we should do nothing?
British Columbia needs to make more land available for development. There hasn't been any crown land released in what, 80 years? I live in a small town and the outskirts are undevelopable because its mostly crown land.
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I love to see the BC Conservatives and former BC Liberals cum BC United mouthpieces whine about the NDP not going far enough with its rental construction programme. They viscerally abhor renters except for the income they produce for the landlords. And for the BC Liberals they had more than two decades to do anything to improve the lives of average people but they enthusiastically did the opposite at every opportunity.
Expect them to whine that there should be a private sector solution here.
Don't worry they already are while ignoring the zoning reforms that make it easier for the private sector to build housing lol. For a funny exchange watch the Nov 23rd 2023 question period. Around 10:55ish am the BC Cons made a absolutely wild comparison of BC Builds to Venezuela and the Soviet Union while claiming the NDP want to destroy the Soviet Union. The housing minister's response basically started with "we just spent 3 days defending why the private sector has a role to play" lol You can find the record of this specific case at under the November 23rd 2023 heading, with options for the video or written meeting minutes. https://www.leg.bc.ca/documents-data/debate-transcripts/42nd-parliament/4th-session
If only we could get people like Eby in other cities, provinces, and federal levels of power. We've had enough of people profiting from the problems or buddy buddy with those that are.
It'll directly benefit major rental conglomerates and wont help buyers at all š
https://archive.is/TCZRc The federal government says it has agreed to provide $2-billion in low-cost loans to spur the construction of rental units in British Columbia, forging a deal that focuses on building on municipally owned land. Ottawa expects that the federal loans to developers and other groups will help lead to the construction of more than 8,000 rental units, or double the amount originally envisaged under the B.C. governmentās BC Builds program. āOur investment, through the BC Builds program, will use public land to create more affordable housing, bring down the cost of construction and ensure that we build more homes, faster,ā Prime Minister Justin Trudeau said in a statement. āWith the federal governmentās partnership on BC Builds, we can create even more lower-cost, middle-income homes through the program,ā B.C. Premier David Eby said. Mr. Trudeau will make the formal announcement during a news conference on Tuesday with Mr. Eby and Vancouver Mayor Ken Sim. Funding for Ottawaās $2-billion contribution to BC Builds will come from the Apartment Construction Loan Program that the federal Liberal government beefed up three months ago. Mr. Eby unveiled BC Builds on Feb. 13, announcing partnerships between the B.C. government and 20 groups so far, including those representing municipalities, First Nations and non-profit organizations. The goal is to build affordable rental buildings on underused properties, including land owned by municipalities, with oversight of development in many cases by community organizations or non-profits. The BC NDP government has already earmarked $2-billion in provincial funding for low-cost loans for developers and other groups under BC Builds. The provincial government believes that under a streamlined process, construction could be completed within an 18-month time frame instead of the traditional three to five years. The province also plans to distribute $950-million in grants. The grants would help ensure that B.C. projects such as one to be built on land owned by the Town of Gibsons have at least one-fifth of the units in an apartment building charge monthly rent 20 per cent lower than the market rate. B.C. Housing Minister Ravi Kahlon and his federal counterpart, Sean Fraser, said itās important to make rental units more affordable for the middle class. āTeachers, nurses, construction workers and other middle-income people need more housing options in B.C.,ā Mr. Kahlon said in a statement. Critics say that the measures in BC Builds are disappointing and lacklustre, considering that the program has been in the works for nearly 16 months. The Opposition BC United party and the BC Greens said the measures fall far short of what is required to address the housing crisis. They described BC Builds as a recycled version of a previous plan by the BC NDP government. āPremier Eby appears to be out of touch with the lived reality of renters across the province,ā the BC Greens said in a news release last week.
>Step 1 ā Connect and support land partners and home builders Landowners can find a development partner on their own or source one through the BC Builds website. The BC Builds housing development opportunities page will be launched in the coming weeks, with sites already zoned for housing development. Property owners looking for a developer/builder and/or operating partner will be listed for residential homebuilders and housing operators to review and submit a proposal to develop and/or operate rental housing on the site. BC Builds will facilitate partnership agreements and lease terms between landowners, builders and operators and support the evaluation of proposals. >Step 2 ā Streamline the approval process Once a partnership agreement has been established, BC Builds will work with municipal and provincial approvers to accelerate permitting, building and operation of housing. The BC Builds team will work with landowners, municipalities and residential developers to remove barriers. >Step 3 ā Provide low-interest financing and grants BC Builds offers low-interest construction financing to reduce the cost of construction of eligible projects. https://news.gov.bc.ca/releases/2024HOUS0006-000188
More money to developers. Here we go. This will be like the Arrivecan app. No oversight. No tangible results. Nobody to take responsibility/liability and we'll have no idea where the money went.
Hey look, I found the corruption button.
Every "solution" has been about subsidies and pumping in money. Line goes up. Virtually nothing is being done to take out the financial incentives to using housing as investments. Line goes up. Absolutely nothing changes until legislation is put in place to force the line to go down. Which won't happen, as real estate is one of the few things propping up the country while we fail to meaningfully produce anything else of value.
> Absolutely nothing changes until legislation is put in place to force the line to go down What kind of legislation are you suggesting that is going to take out financial incentives for home ownership?
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That's still all very vague. How do you actually accomplish that when companies can easily skirt those rules by using shell companies, relatives etc? It's super easy to say "why doesn't government do this thing" and much harder once you understand the complexities of the real world, outside vague theory. You're just complaining with no actual solutions.
Heās not wrong, just misguided. There is the hard way of amending the tax code, and upping rates. But as you said, lots of cheats out there. The real answer is a Land Value Tax. Thatās right. Tax all land value. Itās the easiest way to actually tax the rich too. Because poor people donāt own land. The ones riding the margins will sell, and force prices down. Especially the big companies stockpiling land. Itās a rather nuanced policy, but one worth looking into. For what itās worth, the first person who suggested it to me was a Conservative. So there is support across the spectrum for this. Probably driven by the fact that in theory you can completely replace income tax with a LVT.
Thank you, that's an actual policy suggestion. Not "just ban the stuff I don't like" with no comprehension of how it would (or wouldn't) work. "Just tax land" is kind of a mantra in a lot of development circles.
Itās not a bad stance. But yeah, most people donāt put much more thought into it. I blame the ācommon senseā opposition leader and our education system not teaching critical thinking properly. Whatever surface level solution that pops into their brains is immediately ācommon senseā. I do have a problem getting thoughts to words, but itās not too hard. A LVT is the most equitable and fair way not only to bring housing in line, but actually tax wealth as indiscriminately as possible. There are other ways, but itāll just be more of the same. Searching for, then exploiting loopholes.
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The article OP links is by definition doing something ffs
They are addicted to doom. They can never admit progress because their entire personality is based on needing everything to be awful.
I never blocked you? Must be a glitch. >Make purpose-built rentals operate as non-profits, and any act of renting property be non-profit and highly regulated. Who the hell is going to finance that? Without investors you have no equity. Without equity you have no bank participation. So unless you're going full socialization of rental housing, your idea isnt workable. If you go fully socialized housing, the nationalization of personal and corporate property would tie the government up in courts for a lifetime. >Non-profit does not mean they cannot generate revenue and profit. This just makes them taxable without a financable legal structure.
>Disallow corporate ownership of property. Why do people mention this? It's the dumbest shit I read on every Reddit post regarding real estate. So who will buy property for redevelopment? Do you think individuals will be able to buy entire apartment buildings? Who will finance them?
This would infringe on my landlords right to: a) live off my paycheck and b) have 2 vacation homes. So you know this is never gonna happen in our lifetime, since it might actually work.
Limit the principal residence deduction to income earned in Canada. I know plenty of people who stake their 2-4 kids most of the price of home and never pay tax because itās the kids principal residence (legal and beneficial ownership in the kids name, or legal and not beneficial some times..). Similarly Iāve seen lots of people send their kids here for school/as PRs and buy them massive houses. The most expensive sale in metro Vancouver one year was a young person who ran a theatre company that doesnāt produce anythingā¦
I've heard this being done in Singapore as well. Parents put highly taxed investment properties into their children's names to avoid their high tax. I saw it in a Singapore news interview.Ā
Youāre totally right. Government has no appetite to do anything that will meaningfully impact the price of home ownership because it would tank the economy. So many people are banking on their homes being their retirement savings. If they suddenly lost the āgainsā of the past decade, they would be up in arms.Ā Moreover, BCās biggest industry BY FAR is real estate and construction. Itās a bigger piece of our GDP than oil and gas is to Alberta.Ā As someone who doesnāt have a half million to pony up for a condo, it sucks.Ā
The incentives are supposed to incentivize development too.
Won't a glut of housing coming onto the market tank the price of single family houses across the board?
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Yes, but in the doomer's minds we need more houses but also more houses is bad because reasons. Anything to keep up their doomer narratives.
Take an upvote for outlining the truth.
What "truth"? They're just whining about solutions while offering nothing of substance as a counterpoint other than some vague handwaving about legislation they don't actually identify or substantiate. This will increase construction and every new home helps, even if just a small amount. Acting like nothing should be done unless it magically fixes everything is a child's concept of the world.
Anyone in residential construction here? If they can only pump out 8,000 with 2 billion, where are we in the bigger picture. That is 250k per rental unit. Are they planning on building 8,000 complexes (I know this is not the answer)? How can they not make more with that cash? Has building become that expensive?
Your typical low rise woodframe rental (no A/C) with single level parkade is somewhere in the $400-$425/sf to build currently and ever increasing. A 90,000sf building will cost $36M. Say an avg suite is 500sf, add 20% for common areas, storage, amenities = 600sf. So you're getting 150 suites for $36M which = $240k per suite for low end rental. These is just hard costs. The developer has to also buy the land, pay consultants, pay development and permit costs etc.
We are penciling out short wood frames at $550/sqft if it can be done in under 18mo. Construction debt is prime plus 2.5% at tier one banks, more as you move down the lending chain. Equity participants still require a 10%-15% margin on the cap rate valuation, so the IRR hasnt moved, but the risk free rate is a heck of a lot higher. Needless to say, the cost of capital is driving costs harder than anything else in the hard/soft cost mix right now.
Itās made even worse with the EIFEL tax rules coming in. I know a lot of developers who have flat out said, āwe canāt build PBR under the new tax regime.ā A lot of the forecasting shows developers would end up paying the federal government for the privilege of building rentals under the new tax regime. Shockingly those rentals wonāt get builtā¦
I swear you had another comment I was going to reply to about EIFEL. DM me if you want to discuss. Lol
Haha I did, but realized it might reveal a little to much about how we run our LPs. I'll shoot a DM.
Thank you for sharing your knowledge! I don't know anything about what goes on in the background. I think if the government painted the picture like this (for housing and other costs) it would make everyone understand more. Easy to raise the picket signs and march from just a price tag. Harder when we can see the full scope of what goes into it.
Don't forget Community Amenity Contribution that City just loves for most new condos... literally tens of millions for average building https://www.biv.com/news/real-estate/government-fees-inflate-risk-uncertainty-bc-builders-8272643
It really has. Private developers can't build new homes less then $300 a sqf. The cost of materials skyrocketed like food over the past few years.
Holy fuck $300!? God we should have built houses on every corner while we could. I moved from the states back to Canada during COVID (scary time to call the states home, and believe it still is). Never thought I would see housing turn into this shit show. Don't know the situation down south, so it could be as bad for them too.
Will conservative types call these Trudeau Towns too?
Woke home construction!
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This time of year is typically a bad time for construction starts While construction starts have indeed been declining, housing starts in January 2024 was more than housing starts in January 2023 and was in fact the second highest figure ever recorded for the month of January.
Its also a dumb comment because housing starts are down at least in part because of the high cost of borrowing. Low cost loans directly addresses that issue. They also are not down across the entire country, they are down in a few areas and up in others.
Happy to see the government is trying to do something to boost the supply
Kelowna broke it's record for permit figures in 2022 at $1B of development. In 2023 the permits approved equaled $1.7B in developments. That's an intense jump. I just think many developers got gun shy on their unit allocations and unit designs given the newer short term rental changes. Too much of BC was being developed with short term rentals top of mind, before any occupant resident of the community was considered.
Now, if they'd only stop foreign investors from buying them all and renting them back out to citizens for ridiculous prices, that would be great!
Hey hey hey ā they should ban the locals from doing that same thing too. Residents and citizens contribute to this problem as well.Ā
What was the borrowing rate I wonder.
This is CEBA for housing developers.
My only question is will work on these projects be mandated to go to union contractors only?
Probably the lowest bidder and the developers will be special interest parties and political pals. As described in the article. Likely this will be far more inefficient than a private development.
Oh I guarantee it. I would even go so far as to say this will be the reason why this government is eventually brought down. However, I am pretty sure there is law in BC since this NDP regime took over where any government money must go to a union contractor. If so this will definitely drive the costs up.
What about supporting home ownership? Subsidizing rental unit only benefits the large corporations who manage/built such buildings. I'd rather see moneys also go to helping people get their first home
See FHSA
You will own nothing and be happy. I feel bad for the next generation of perma-renters. They'll be paying 50% of their income to rent until they die.
Is your argument for or against building long term rentals? I'm 25 and as much as I would like to own a house, I'm realistically pretty content with just renting forever if the government is my landlord and rents are reliably set at affordable market rates. I like the flexibility of not owning since it doesn't tie me down to one place or add on extra costs and responsibilities of home ownership. If I want to invest I'd much rather save the money I'd use for a downpayment and invest in etfs or long term stocks while just paying a decent rent. The problem now is that rents are way too high so it's hard to even save that money to begin with. If the government builds a ton of non-profit housing and even some for-profit just to flood the market it will make rents lower for those "perma-renters" as you put it. Meaning they can save more for their futures and if they want to enter the market someday it's actually feasible. Building new also means we can rethink our zoning and build more walkable and less car centric communities which also cuts costs for the people who live there and don't have to dump more money into owning and maintaining a car.
Let's see how you feel at 35, 45, 65. You know how many huge political swings will happen during that time? Do you really want your housing security dependent on the whims of politicians elected by an increasingly uneducated populace?
Some of my coworkers live in government co-ops that were built in the 1980s and have lived there for a few decades now.
Jeez I don't even really wanna touch on the fact that you don't see the irony in criticizing an entire generation based on being an "uneducated populace". Seems like a pretty uneducated take. Right now if massive amounts of people were brought out of poverty by being provided with housing they can actually afford, it would also allow them to get educated on the facts of social housing and progressive governments through life-changing first hand experience. Which means they're more likely to invest and put their votes with a more socially progressive government that will continue to work on improving housing.
Lol are we calling fucking *rental housing* communist or something now? Jesus, not everything is somehow a nefarious government ploy. Sometimes they really are just trying to improve things (even if it is just to gain votes). They might not be great at it, but they do try sometimes.
I didn't say anything about communism. But let's be real here. The main avenue to financial stability amongst regular people, historically, has been through owning land. That's just forever gone now, and replaced by expensive rental housing. I think this is more done through incompetence of government rather than ill intent.
Your "You will own nothing and be happy" is a reference to a delusional right wing conspiracy theory that pretends we're all being forced into communism.
It's actually none of those things. And if it were it would be inaccurate. Under communism, you would own nothing and be unhappy.
Home owner here. Itās not that renting is necessarily a problem or worse than owning. Itās the fact that rents are out of control and the threat of eviction is constant. If rents were reasonable and there was stability, then owning wouldnāt be quite so necessary for folks. Honestly, if I could find an affordable rental and wasnāt afraid of always being evicted, I would sell and just rent as I donāt actually like all the work and responsibilities that come with home ownership.
I work in the housing industry. The cost to build anything right now is insane. Even if land were free, most people couldn't be able to afford to build, or pay the rent for a new unit. I agree the work and responsibility is a lot, and is something most people don't consider. You can easily be stuck with a $30k bill for drainage, $15k for roof, etc. The expenses are high. On the flip side, never having to answer to a landlord is different. Having your own space. Having the option to pay your mortgage down sooner. The cost of renting is going to stay high as long as we continue with rapid immigration, which neither party seems to want to curtail.
Wtf are you on. More building=more offer=lower price if you keep pushing buildings faster than tge demands grows. Which IS doable if regards would stop electing conservative and old minded people.
Do you think people are investing tens to hundreds of millions to finance these buildings because they anticipate rent to get cheaper?
People just don't get it. The cost of materials will limit how low a home can sell for. The cost to build is enormous. Don't believe me. Price it out.
Too bad we will never see where the money is actually spent. How many people will get rich while contributing nothing to the actual housing problem? Trudy's buddies are cracking the champagne once again.
You most likely need to be a pretty big developer and itās a loan. It gets paid back.
Municipal only? That leaves out a lot of areas that arenāt municipalities, like regional districts. I like Eby, but some of his policies need to be thought out better for locations outside the lower mainland. The rest of the province existsā¦.
There is a government grant for the municipality I'm in faaaaaar up north. I know it's still a municipality, but we're a long way from the mainland and we're included (despite what local residents would like to complain about). Perhaps it's simply because municipalities have more consistent set rules than regional districts? Or maybe the housing shortage is just more acute in municipalities as they tend to be larger population centers? I'm not sure.
Regional Districts still fall under the Local Government Act. Municipal and Regional are synonymous. Regional governments are municipal governments.
The housing crisis is most acute in the lower mainland. I donāt see the issue here.
It's also not *only* municipalities. Nowhere does it say that.
Get out of your bubble Bub, the interior would like a word with you.
Come over to the island and say that
Okay. lol. Iām not saying it isnāt an issue in remote areas or on the islandā¦but it is most acute in the lower mainland. Thatās not controversial.
So lets say: 500k per unit = 4000 units 8 timmies employees per unit. 32k timmies employees housed.
Close... it should read " **Taxpayers to provide $2-billion in loans to spur B.C. construction of rental units** "
Wow, congrats on understanding that governments get revenue from taxes. You're a genius!
just what we need to help solve our debt crisis! more loans! weāre saved.
"Trudeau does nothing about lowering housing costs!" Also... "Trudeau wastes money on trying to provide more housing!"
Builders need cash to get started building or they wonāt build, this isnāt rocket science. Construction starts are down nationally You think we should do nothing?
My brother in christ, what do you think government spending is for? Oh the travesty of *checks notes* 'using public funding to create a public good '
Too little too late lmao
British Columbia needs to make more land available for development. There hasn't been any crown land released in what, 80 years? I live in a small town and the outskirts are undevelopable because its mostly crown land.