3/6/2023 0 Comments Andrey pavlov![]() ![]() Take the current de-facto moratorium on redeveloping most rental properties in Vancouver as an example. Still, the province can easily pass legislation that imposes tight limits on development approval timelines and outlaws unreasonable and arbitrary requirements and restrictions. Regrettably, this falls mostly within the mandate of the municipal governments, who have shown no interest in doing so. If we are serious about helping home buyers, we should take steps to allow a vast increase in housing supply in the Lower Mainland.įirst, we should greatly simplify and speed up the development approval process. taxpayers into the real estate market, whether they like it or not. The loan exposure de facto invests all B.C. This creates a taxpayer liability that has the potential to come back and haunt us. This means they will experience losses first in case a borrower defaults. The new loans will be registered as second mortgages. This comes at the worst possible time, just when interest rates are clearly on the increase and many real estate markets in B.C., especially in the Lower Mainland, appear to be just past their peak and forecasted to decline from here. It will push people to stretch themselves even further financially and to take on even more debt. ![]() The negative side effects of the new program, on the other hand, stay with the buyers. Therefore, the benefits of the new program will flow to current owners and developers, not to the buyers. In a market with highly constrained new supply, any financial subsidy for buyers would get reflected in higher sale prices. So what does this have to do with the new loan program? Everything. All these factors eliminate any possibility for a meaningful supply increase that would normally occur given our housing needs. Our transportation infrastructure is among the most inadequate in North America, our development approval process borders absurdity, and we have chosen to make large areas of land unavailable for development. Some of this is due to our geography, but most of it is because of the choices our municipal governments are making. Greater Vancouver is a highly constrained market. Read more: Despite rising home prices, millennials intent on staying in Vancouver region Read more: The dark side of the housing boom to offer loans to first-time buyers as Bank of Canada issues debt warning ![]()
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