The provincial government officially announced a three-year-pilot project incentivizing the construction of secondary suites with the goal of providing more affordable rental homes for B.C. residents.
Starting on May 2, homeowners in most B.C. municipalities and regional districts can apply to Secondary Suite Incentive Program through B.C. Housing’s secondary suite website.
Premier David Eby officially launched the $40-million program Thursday near a hardware store in Greater Victoria. Housing Minister Ravi Kahlon and Children and Family Minister Grace Lore, MLA for Victoria-Beacon Hill joined him in the announcement.
The program first announced last year offers eligible homeowners forgivable loans covering up to 50 per cent of costs up to a maximum of $40,000 to add secondary suites or accessory buildings (garden suites, laneway houses) on the property of their primary residence.
They must rent out those units for five years at rates 40 per cent below market rates to see the loan forgiven.
Eby said this program will benefit both homeowners and landlords, creating thousands of affordable rentals.
“This is a win for homeowners, a win for renters and a win for communities throughout our province,” he said.
About 1,000 homeowners will receive forgivable loans each year, which will add 3,000 new rental units, according to government.
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Kahlon said the program will make it “easier and more affordable for homeowners to become part of the solution to the housing shortage,” calling it later a “triple-score word.”
Kahlon acknowledged that the rents will be significantly below market rates, but that is why government is offering incentives with the loan attached to title.
If properties are sold within five years, the province recoups its money, he added. Kahlon said the program will operate on a first-come, first-serve basis for three years.
“It’s an innovate new tool,” Kahlon said. “We are going to see how it rolls out and if it needs to be expanded, I will be knocking on the finance minister’s door,” he said.
B.C. United Leader Kevin Falcon is critical of the program. “We all want to see secondary suites built,” he said. But Falcon said he cannot imagine public support for a program that gives home-owners money for a secondary suite that will provide them decades of potential revenue when they are already in an “advantageous” position. Falcon said he would offer eligible repayable loans on “favourable terms to ensure that the taxpayers get their money back.”
Falcon said he would also create a province-wide standard for secondary suites to avoid
When asked about Falcon’s critique, Eby said this program is actually cheaper for government than handing out subsidizes to individuals, who must then compete for rental units charging market rates. “So it has the same effect of delivering below-market-rental housing (units), but it is adding more supply to the rental housing market,” Eby said. “
Eligible homeowners must obtain building and occupancy permits from their local government, have a combined gross annual income of less than $209,420 and have property assessment values below the homeowner grant threshold of $2.15 million.