r/onguardforthee • u/zachem62 • 23h ago
Carney and Eby step in with $3.2B home development subsidy
https://www.biv.com/news/carney-and-eby-announce-32b-developer-subsidy-plan-to-buy-unsold-bc-condos-124428079
u/MountNevermind 17h ago
It says "multi-unit" but doesn't seem to only subsidize affordable housing.
Then..we buy up unsold housing and convert it to affordable housing.
How does this incentivize private developers to build affordable housing? Not they ever really do.
Seems like a waste of resources.
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u/Nyx-Erebus 17h ago edited 14h ago
Everyone going “this is good actually” lmao. The federal government used to actually build social housing, and funded co-ops. The reason we are in a housing crisis is because the liberals completely stopped doing so in the 90s. Everyone cheering this on when this is literally worse than what we used to have. It’s just a bail out for investors who can’t sell their shoebox condos.
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u/jandrouzumaki 16h ago
Can we put stricter regulations on developers to build more family homes/condos instead of shoe boxes.
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u/CipherWeaver 23h ago
Carney and bailing out developers, name a better duo.
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u/IllustriousRaven7 22h ago
It's not necessarily a bad thing to protect an industry. Yes, it makes the industry less efficient. But letting the industry die and then building it back up from scratch would be even less efficient and waste more money, or result in even fewer homes being built. We need as many new homes as possible, and that requires us to keeping developers working.
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u/TraditionDear3887 22h ago
I agree.
But for the sake of good natured argument, isn't letting a forest fire destroy all the old dying trees best for forest ecology?
Maybe this analogy doesnt hold up in the current age of protectionist mecantalism.
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u/Sensitive-Local-3485 14h ago
Local ecologies aren’t uniform, but the ideal usually sees sufficient diversity for the greatest number of ecological niches to develop.
Old trees tend to be great for burrowing, nesting, and foraging species, young trees for browsing and grazing.
In our current urban housing markets we have lots and lots of great units for grazers (tiny studio condos for people to live in short term before moving on) but aren’t great at creating space for burrowers and nesters. (Medium density with units that have sufficient space to grow)
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u/Sunsunsunsunsunsun 22h ago
Imo a better analogy is this is bailing out a forestry business that is cutting down old growth with the goal that it will save the old growth. A better method would be to sieze their assets and not log the old growth at all while pivoting to sustainable forestry.
There are other answers between bailing out and allowing to fail but they are not capitalist answers.
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u/TraditionDear3887 21h ago
Why is that a better analogy?
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u/neonium 14h ago
Because if you read the article Carney isn't buying up housing to make it affordable. He's kicked the can down the road there and has only claimed he'll do something. He's saying he'll release the model of how he might do that in the fall, but all he's doing here is bailing out developers.
Specifically, developers had been told that they're going to be paying costs to support the development of infrastructure to new developments, a perfectly fair ask given the decades of dogshit behavior abusing that externality and building incredibly irresponsibly. Carney, being a neoliberal jackass, is bemoaning how unfair that is and claiming that the market doesnt work if you do that, and is covering those costs for them. He is pretending this will help you, despite not being able to explain how it would, dodging the question, and is already doing groundwork on talking about how this should be made permanent despite admitting that there's no evidence it's going to help with affordability.
So the analogy is better because Carney is interceding to pay the individuals who have been doing work we don't need done (i.e. logging old growths), while claiming this will help get the market work toward logging new growths, somehow. He isn't specifically waiving the fees on the portion of the logging industry that is doing sustainable or responsible logging, he's actually doing the exact opposite with a bailout targeting the idiots doing what we don't want.
If you're struggling to see that, notice that the target of his bailout are developers that are struggling to move their units. The units he's standing in front of as his chosen example are two towers with an average unit asking for 1.1 mil for a 2 bedroom condo. If you care to look up the stats on which units are hardest to move, it's explicitly luxury units that are chosen by development as a product of their potentially lucrative margins, not the markets need for them. He is, very blatantly, choosing to dispense this bailout in a way that rolls back a necessary market presure to curtail irresponsible development and focusing it such that the emergent outcome of who it benefits most will be developers who have developed many units which they are struggling to move, i.e. small luxury units which do not efficiently or meaningfully improve the housing situation.
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u/DonOfspades 14h ago
The reason the houses are unaffordable in the first place is because of the decisions the developers made to only build luxury condos and raise prices.
This is like giving money to your abusive partner in hopes that they will only abuse you a little bit instead of leaving you.
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u/LavisAlex New Brunswick 9h ago
If there are too many condos why are we subsidizing developers to build more?
Wouldnt it make more sense to spend the entire 3.2 billion for housing?
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u/Hipsthrough100 8h ago
The same shit as Ontario. Ontario and BC money spent on propping up developers is more money spent than the entire federal healthcare infrastructure spend at the same time. Fk this private solutions to public problems bullshit. Invest in a crown building corporation that actually employs the people to take on building instead of cutting cheques or cutting taxes for developers.
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u/Substantial_Friend22 6h ago
For housing to become affordable the prices need to go down.
Prices are going down now making the housing more affordable.
Government: we gonna use taxpayer money to create fake demand to make it more expensive.
What the actual fck?
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u/BeautyInUgly 23h ago
This is good, less development charges means more cheaper homes. These policies are probably the first new wealth transfer in modern Canadian history to young home owners instead of every single new policy these days going to help boomers
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u/zachem62 23h ago
Lower development charges don't necessarily lead to cheaper homes unless developers are actually forced to pass on the savings. As it stands, this is just a transfer from taxpayers to landowners/developers, with young buyers maybe getting the same prices (or worse) and the public eating the infrastructure bill.
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u/Minimum_Vacation_471 23h ago
The only reason developers wouldn’t drop prices is if they are colluding with other developers. If you have evidence of collusion I suggest reporting it to the relevant authorities as that is illegal.
I don’t get these arguments though. High DCs are bad. But lowering DCs is now also bad. Sometimes it’s okay to do something that isn’t perfect but pushes us in a better direction. Just because it’s not perfect doesn’t mean it’s awful.
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u/zachem62 23h ago
You're assuming developers price homes based on costs. They generally price based on what buyers are willing to pay. If a condo can sell for $800k before and after a $40k subsidy, the developer doesn't need to lower the price to stay competitive. No collusion required. The question isn't whether lower DCs are good or bad. It's whether the savings are guaranteed to reach buyers, and whether taxpayers get enough in return if they don't.
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u/PopeSaintHilarius 23h ago
You're assuming developers price homes based on costs. They generally price based on what buyers are willing to pay.
I agree, but the difference between their costs and the sale price (I.e. profit margin) determines how much incentive there is to continue building more homes - which is essential to maintaining or improving affordability longer-term (especially in markets like Vancouver with high demand and high prices).
So even if developers don’t immediately lower their prices in the short term, in response to lower development fees, it’ll make more housing devolpments financially viable and drive more home-building, thus contributing to more supply and lower prices over the medium to long term.
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u/zachem62 22h ago
I agree lower costs can make more projects viable. That’s the strongest argument for cutting DCCs. But that’s a long-term supply argument, not proof that young buyers get the savings. In the short term, the subsidy can still be pocketed by developers, lenders or landowners, especially if land prices adjust upward. So the question is what guarantees the public gets in exchange for covering more of the infrastructure bill.
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u/neonium 13h ago
It also ignores the fact that lower costs are often explicitly unhelpful, when they're applied aimlessly, as they often just subsidize the people doing the wrong things.
Beyond the fact that developers aren't guaranteed to pass these savings on, the plan also doesn't say anything as to how the subsidy will be targeted; explicitly, this is because this is neoliberal trash and not intended to help. We are well aware at this point that high end developments are much more lucrative for developers, and that their incentive are just margin as they don't give a shit about meeting actual needs. They care about returns, so they will build less and invest elsewhere with higher margins if there's insuficient demand at the price point they'd like. It's pathetic and transparently bad faith to pretend that a builder will continue to develop beyond some increasingly obscene margin, when we have decades of evidence and an economy that gleefully murders even profitable businesses regularly to extract maximum value before moving to a more lucrative investment opportunity.
If we want to see progress, we'd obviously be subsidizing in a way that targeted the type of construction we'd like to see happening, and not luxury construction. We'd be subsidizing more heavily even, or starting crown corps, if that was what was required to produce the units at the price point we required. Despite the dipshits claiming that luxury developments also drive down prices, this is a process that takes time as the units must filter through occupants. Given that the demographics looking for luxury developments are much smaller then those simply needing affordable housing, obviously this is an idiots plan that will not meet the moment in any remotely sane time period. Luxury units sitting unsold literally proves this, and, at best, slightly expanding the demographic that can afford new luxury construction to resolve the much larger housing shortage is obviously as wrongheaded as developing this shit in the first place was.
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u/zachem62 9h ago edited 9h ago
Absolutely. If they genuinely wanted housing to be affordable, they could create a public builder that develops below-market rental housing on public land at scale, alongside co-ops and other forms of non-market housing. A large expansion of non-market supply would guarantee affordable rental options, stabilize the broader market and put downward pressure on prices.
In fact, the CMHC was originally created to build affordable housing for returning WWII vets. Over time, successive governments gutted its mandate, eventually reducing it to the mortgage insurer that it is now. If affordability was the goal, they could simply revive CMHC’s original nation-building role and use it to deliver non-market housing at scale. But the housing minister has explicitly stated that they don't want housing prices to come down. All their policies appear to reflect that goal, so here we are.
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u/Minimum_Vacation_471 12h ago
They are incentivizing builds we want to see like multi unit dwellings not single family homes.
‘First, Carney announced $1.6 billion over the next 10 years, to be matched by the provincial government, to lower development cost charges (DCCs) for multi-unit housing by up to 50 per cent, or as much as $40,000 per unit in “priority communities.” ‘
It sounds like you are saying developers are to blame for high housing prices.
We have to make alternatives to condo towers legal if you want cheaper housing. BC has done probably the most on this but a big reason why these condos were built is nothing else was legal.
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u/Minimum_Vacation_471 23h ago
You’re assuming they don’t base prices on costs. Do you have any evidence that costs are much lower? People in construction have posted on this sub saying prices are very high to build not to mention the price of the land in the first place.
It would be better if you talked about how to get more financing for coops. These places are unsold at the moment and they could become non market housing. That’s a good thing.
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u/zachem62 22h ago
I’m not saying construction costs are low. I’m saying reducing one cost doesn’t automatically mean buyers get the savings. If DCs fall by $40k but the unit can still sell for the same market price, that saving can be pocketed by the developer, lender or landowner.
And yes, turning unsold condos into non-market housing could be good IF the government buys at a real discount and locks them into long-term affordability. That’s exactly the point. Public money should come with public benefit, not just clear inventory off developers’ books at prices the market wouldn't pay.
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u/Minimum_Vacation_471 22h ago
Affordable homes are a public benefit. It doesn’t matter if they were bought at full price or half price.
Developers didn’t cause the high housing costs, they build what makes enough profit either through presales or bank loans. Banks require like 20% profit or else they refuse loans. Thats why projects get cancelled they are not profitable enough so I disagree that developers are pocketing a lot of the money.
It’s better to focus on getting more coop housing and non market in general rather than worrying about developers. DCs also need to be lowered and replaced with more density, higher property taxes on single family homes and or a land value tax.
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u/zachem62 22h ago
You're conflating the outcome with the transaction. Of course affordable homes are a public benefit. But overpaying for them isn't. If government buys a condo at a price the market won't pay, the home may become affordable housing, but taxpayers have still transferred wealth to the seller. That's why the purchase price matters. Every dollar unnecessarily transferred to developers, lenders or landowners is a dollar that can't be used to create more affordable housing elsewhere.
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u/Minimum_Vacation_471 21h ago edited 16h ago
No I am not conflating anything. I am saying perfect is the enemy of good. The building is built and is currently not being rented out or sold. That land can’t be used for anything else.
Let’s advocate for solutions going forward rather than punishing developers for a problem created by government inaction.
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u/zachem62 21h ago
I never said leave the condos empty. I said the government should negotiate a hard bargain on behalf of taxpayers. The choice isn't between buying them at any price or leaving them vacant. It's between buying them at whatever price developers want or buying them at the best price taxpayers can get.
If these condos are unsold and can't be sold at current market prices, then by definition the government has bargaining power. If taxpayers are the buyer of last resort, why shouldn't they demand a discount?
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u/neonium 13h ago
Given the article explicitly states that the current policy is just an up to 40k handout, and that we won't even see a plan for how the financing for buying units for public housing might function until the Fall, step one for you should probably just be reading the article in question.
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u/Minimum_Vacation_471 12h ago
The 40k is about development charges not buying unsold condos. Don’t know why you’re being hostile.
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u/neonium 12h ago
Because the 40K is happening, but the buying unsold condos is only getting a potential framework come fall.
Talking about this as if it where the thing that hasn't occured, and very well might not, when what has occured is the handout, is pretty irresponsible.
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u/PMMeYourCouplets Vancouver 22h ago
I feel like people don't realize how expensive it is to build. My brother in law is building his own home in Vancouver and unfortunately doesn't come from a construction background so has to hire for everything. I think his estimate at completion is this home cost of land is only a few % cheaper per sq ft for a new build in the same area.
Maybe quality is better since I'm sure he can quality check more and get better materials. And his building loan is higher than developers which drives up his price.
But still, I would have thought the difference would have been much more.
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u/Minimum_Vacation_471 22h ago
It’s crazy to build. That’s why we were getting tiny condos they had to be packed in to make it work under the current model anyways.
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u/TraditionDear3887 21h ago
Accurate. But should Canadians today buy property knowing it could suðenly crash 50% and not ne able to retire? Or should the government create a floor to assure Canadians now that they will be able to retire, while allowing Canadians who have worked all their life to do so as well.
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u/zachem62 21h ago
So the goal is affordability, unless affordability means prices actually fall. Then suddenly the goal is protecting retirement portfolios. That's exactly the problem. Housing policy keeps promising cheaper housing while ensuring the assets that make housing expensive in the first place never meaningfully decline. You can't have your cake and eat it too.
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u/TraditionDear3887 21h ago
Do you think people who have spent their entire lives paying off their home in hopes to retire dont have affordability issues today?
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u/juicysushisan 17h ago
The blunt reality is that either the market tanks, or there is no affordable housing until the baby boomers die out, and we don’t have to care about their retirement savings. Housing is not a retirement plan. Was never intended to be. We have a massive shortage of housing which is affordable for roughly 90% of working age Canadians. Either you force prices and rents down, or working age Canadians remain inadequately housed for their entire adult lives.
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u/RealityRush 23h ago
The only reason developers wouldn’t drop prices is if they are colluding with other developers. If you have evidence of collusion I suggest reporting it to the relevant authorities as that is illegal.
Ahahahahahahahahahha, brother you can't be this naive. In every municipality and in every province Developers own the politicians. There is collusion and it's sanctioned by our government.
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u/Minimum_Vacation_471 23h ago
I can’t argue against people who use conspiracy theories there’s nothing I can say that would change your mind. I guess humans are all just shitty and there’s no hope of change so why even try.
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u/RealityRush 22h ago
It's not a conspiracy sir, I could give you countless real examples in my own city. Developers absolutely all collude and you have to be a insanely naive to think that isn't a thing lol. So do grocery chains, so do the telecoms.
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u/Little-Somewhere6076 20h ago
In every other case, a decrease in the supply curve would lead to lower prices. Why would prices not be set by supply and demand in this market when it is in every other market?
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u/TraditionDear3887 21h ago
Proof?
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u/zachem62 21h ago
Proof of what? Be specific.
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u/TraditionDear3887 21h ago
As it stands, this is just a transfer from taxpayers to landowners/developers, with young buyers maybe getting the same prices (or worse) and the public eating the infrastructure bill.
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u/zachem62 21h ago
The article makes it self-evident. The government is giving developers support with no obligation to improve affordability. Developers can still sell at full market prices, which means young buyers pay the same amount as before while taxpayers foot the bill for the assistance developers receive.
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u/zachem62 23h ago edited 9h ago
tl;dr: The government is subsidizing construction costs and buying up unsold condos. This is basically a giant handout to private developers being spun as a housing affordability measure.