Ep. 37 New Federal Program to Help Home Owners Build More Housing

Navigate the ebb and flow of the Vancouver real estate market with me, Jacquie McCarnan, as we explore a landscape that promises both opportunities and challenges for savvy buyers. Discover why detached homes in North Vancouver are seeing a spike in sales while condos and townhomes remain stubbornly stagnant, despite an abundance of listings. This episode brings you the latest insights and strategies to help you make informed decisions in a saturated market, including an exciting federal announcement from Ottawa about a transformative loan program to boost housing construction starting in 2025.

Our conversation extends beyond market trends to tackle the pressing issue of affordable housing in Canada. Reflect on the historical context and the current efforts by leaders like David Eby and the Trudeau government, who are making strides with initiatives on public land usage to address housing shortages. I share personal insights on the importance of constructive dialogue over blame, drawing from my own experiences with misplaced criticism. Plus, get a sneak peek into the upcoming Canadian Women in Real Estate Foundation, a groundbreaking initiative aimed at empowering women and shaping future policy in the real estate sector. Engage with us in this dynamic discussion and contribute your thoughts on overcoming housing challenges together.

Federal Gov Press Release: https://www.canada.ca/en/department-finance/news/2024/10/deputy-prime-minister-announces-new-actions-to-build-secondary-suites-and-unlock-vacant-lands-to-build-more-homes.html

Public Lands Mapping tool: https://experience.arcgis.com/experience/4adde6c3403a4793bbf262d55a6983de?locale=en

125 E. 10th: https://cityhallwatch.wordpress.com/2024/08/26/125-e10th-housing-site-canada-public-land-bank/

Where it all went a bit sideways: https://thetyee.ca/Analysis/2022/04/22/Why-Cant-We-Build-Like-1970s/

Chapters

• 0:00 Federal Government Housing Accommodation Program
• 11:30 Affordable Housing Initiatives in Canada

Transcript

Speaker 1: 0:00

Hey everybody, welcome back to Keeping it Real, the Vancouver-in-area residential real estate podcast that aims to keep it real. My name is Jackie McCarnon and I am your host for Keeping it Real. I am a North Vancouver residential realtor who basically just loves to dig into all things real estate and figure out what's going on, and on today's program, I've got something really cool to talk to you about, as always. I'd like to just throw in my little disclaimer to say that anything you hear on this podcast is my opinion based on my research and my experience, and there are going to always be a lot of different opinions out there. This one has definitely some strong opinions that not everybody is going to agree with regarding federal housing accommodations, but we'll get into that in a minute. There's actually kind of a big announcement that came out of Ottawa this week and I'm excited to share that with you. So, without further ado, let's get into it. Okay, I teased you that I would actually start this with a federal announcement, but instead I'm going to give you just a very quick update on what's going on in the North Vancouver real estate market at the moment. If you are like me and you've been driving around, you're seeing a whole lot more sold signs than we have seen in the past. So I thought, oh my gosh, I guess things are turning around. But then the numbers didn't exactly bear that out. So just to give you an idea, the current number of condominiums available for purchase in North Vancouver is 372. And last month, in September, 66, there were 66 sales of condos and in August there were 67. So it's not like we're. You know, things are picking up super fast. So far in October there have been 22 sales of condos, and for townhomes there are currently 123 available, and there were only 20 sales in September and there were 21 in August. So you know, usually we see a kind of a good size leap happening in the fall, which we haven't quite seen yet. So far in October five townhomes have sold. So again, that's not. I mean that might put us on track for 20 again this month. So it's not a huge jump in sales activity over the last couple of months.

Speaker 1: 2:37

As far as detached homes go, there are currently 307 detached homes available in North Vancouver. In August there were 38 sales, and then this is where we're seeing a bit of a bump. So in September there were 52 sales, but so far in October. There are only five. So what we're seeing is the market activity that has increased, has increased in the detached market, the detached home market, and we are not seeing a ton of increased activity in the uh, condo and townhome market.

Speaker 1: 3:13

And, like I've said a couple of times on the podcast over the last couple of months, the market is super saturated with listings at the moment. So of course you know there's probably some, there are probably some deals to be had out there. If you have a savvy realtor or you're talking to me, we might be able to find you a deal if you're looking for a condo or townhouse and even a single family home. But I think people are sitting on those prices that they've, they've listed at and they're waiting. They're just waiting for the buyers to turn up and start buying like crazy. Just hasn't happened yet, but I think it's going to All right with that out of the way.

Speaker 1: 3:53

I want to talk to you guys about an announcement that came out of Ottawa, a press release that came out of Ottawa this week, on October 3rd, and it is the federal government has announced that a new program has been put in place to help building additional homes easier for Canadians. So if you guys have been listening to the podcast, you know that I have talked a lot probably too much about Bill 44, which is a provincially guided program where single family lots have been changed, the zoning has been changed to multifamily and you can build up to four units on that, and now the federal government is saying we're going to make that just a little bit easier to do. The deputy prime minister and also she's also the minister of finance, chrystia Freeland, and a couple other federal government folks introduced a technical guidance for lenders and insurers to offer mortgage refinancing for homeowners to add secondary suites to their homes starting in January 2025. Clear as mud right. These guidelines, coupled with the Canadian Secondary Suite Loan Program, should make it easier for homeowners to add additional homes to their properties. So that's kind of that's what the press release said, and I needed to dig into that to see exactly what that means to regular people. So I guess I always find with all these government announcements that it it is a little bit confusing to lay folk like me. So it takes me a little while to really dig deep and figure out exactly what's happening with this one. Um, it took a little longer than I normally would. Just so I don't mess it up. I made notes so you might hear the paper rattling around a bit. Don't worry about that.

Speaker 1: 5:48

Normally if you want to refinance your home you can only get 80% of the loan to value ratio. With the new program you can now get 90% loan to value ratio with a cap of $2 million. So if you have a home with a mortgage, you can take out a loan against the value of your home so an equity loan basically and use the money Well more. I guess it's more than an equity loan because it's anyway. You can use that money to build a secondary suite, but it's capped at the final. The final value of the property has to be $2 million, so that loan is capped at $1.8 million. So basically you take out the $1.8 million to cover the existing home's mortgage and the cost of building a new suite.

Speaker 1: 6:39

These mortgages will be insured, which I'm guessing comes with mortgage insurance costs. These mortgages will be insured, which I'm guessing comes with mortgage insurance costs. I couldn't find where it said that exactly. But insured mortgages. Here in Canada you have to pay extra to get your mortgage insured. So I'm sure that is the case here. I just didn't see it. I'm going to put a link to the program in the show notes with a couple of other links so that you can take a look at this yourself.

Speaker 1: 7:05

But anyway, there's some parameters, of course. You know there's some rules around this. So you or a close relative have to be living on the property, which makes sense. You must intend to construct additional units on the property with that money. You can't just take out this big loan and not build something there. The new units can't be used for short-term rentals. The new suites have to be legal and registered, which means the municipality will get the tax from that, which makes sense. Of course, maximum number of units is four, which is what we saw in bill uh, bill 44, but I don't know how that applies to places that can actually are actually permitted to build six units. I think there probably will be. Well, I guess that I guess if it was six units then the value of the property would be over 2 million. So maybe that's just a loss leader. Um, uh, what else? And a 30 year amortization period, so interesting. And again, I'm going to put a link to that press release in the show notes so you can go and take a look at that.

Speaker 1: 8:14

I'm not sure that this is going to apply to too many homes in the lower mainland, since the cap is 2 million once you're finished. So I mean there aren't very many homes, single family homes, left here in the Lower Mainland, like in the Vancouver North Vancouver, that would be worth less than two million if it had a primary dwelling and then a secondary suite. But I mean I'm sure there are a few and you know, if this applies to you, give me a call and we can discuss it and we can dig into it together, but I'm not sure how many that's going to apply to down here. However, the rest of British Columbia or the rest of Canada, I'm sure there are lots of opportunities there.

Speaker 1: 8:59

Another point that they brought up in this press release is that the federal government is saying to the provinces hey, you had a lot of vacant land around. Maybe we should, maybe you should, because the federal government can't do this at the federal level. It has to be provincial. So maybe you should look into a vacant land tax, which would be very similar land or vacant land tax. The idea here obviously is to encourage owners of land toused federal properties have been added to the Canada Public Land Bank. So this is really cool. I actually never even heard of this until I read this press release today. I guess the federal government, as Canada's largest landowner, has identified 70 provinces across Canada that home builders can build homes on to create 250,000 new homes, and I'm going to include a link to the land bank's interactive map that shows where these are.

Speaker 1: 10:43

And obviously I was super curious about this. So I went and I took a look and there are two in the Lower Mainland, one in Port Moody and one at 125 East 10th in Vancouver, which is Mount Pleasant. That's an old service Well, I don't want to say old, old service Canada building but it only closed in September of 2024. So if you search it up, you're going to come across some info about what can be done on that land, and I'm going to add a link for that as well. Lots of links in the show notes this week, guys. Anyway. So they say that a 20-story rental unit property can be built there, or another option is to convert the existing offices into residential dwellings, which is what they did at the Electra building downtown a number of years ago.

Speaker 1: 11:30

I don't know if you're familiar with the Electra building it's at Berard and I don't know. I can't remember what the other street is. Yeah, I don't remember. Anyway, it's near that big new butterfly building. Yeah, I don't remember. Anyway, it's near that big new butterfly building.

Speaker 1: 11:49

Anyway, I thought this was very interesting because I think, you know, we hear so much negative feedback about affordable housing in Canada, and whenever the province or the federal governments try to take some big swings at fixing the issues, there are always a whole bunch of people that poo-poo that and say what terrible ideas they are, without offering up any other ideas. And I think that our government is working to fix the affordability issue that we got into a long time ago, in the 90s. So I don't know, I think watching David Eby on the provincial level and the Trudeau government at the federal level take these big swings is, I find, it very interesting. I hope it's going to work. I'm not an economist, I don't really know if it's going to work, but I do hope so. And a lot of them make sense, like using these public lands for affordable quote, unquote affordable housing. So we'll see, I guess.

Speaker 1: 12:47

On that same note, though, I mean, did our government, the government of Canada, totally screw up in the 90s when they stopped building affordable housing A hundred percent? They did and did they take? Did it take a full crisis of of a full housing crisis for them to actually make it a top priority? Yeah, it really did. But I think people need to stop griping about about what the government's doing now, and it actually because it's. It's a problem that started long before any of these people were in politics. Any of the people, any of these people, were in politics. Any of the people in our current government were in politics. So I think, blaming current governments for the sins of the former ones, it actually reminds me of a story. I know how you guys like my stories. I haven't been doing them much, but here's this story.

Speaker 1: 13:41

Many, many years ago well, not that many years ago, like maybe 10 years ago my kids belonged to a cheerleading club and it was very competitive and the coach was very strict and often, in my opinion, quite unreasonable with the way she spoke to the kids, and one day, when I was dropping my girls off, I was also dropping off one of their teammates. I was also dropping off one of their teammates and this coach, when she saw that not very many of the team were there, started screaming at the kids that were there. She was super mad because several of the teammates had gone away for March break. Now, first of all, these kids are, you know, between 10 and 15. It's not like they made the decision themselves to go away from arch break, but, regardless, the kids that were not there were not the ones getting yelled at. I could never understand how it made sense to yell at the kids who showed up Like they were. They were, they had no response, they had no control over the behavior of their teammates that didn't show up yet they were the ones getting screamed at.

Speaker 1: 14:49

And I think this, you know, yelling and screaming at the current governments about the initiatives that they're trying to put into place to help with affordability for housing in Canada is very similar to that situation. Like, stop yelling at the current government. Similar to that situation. Like stop yelling at the current government, unless you have some really brilliant ideas, you know. But I think yelling for the sake of yelling, just because you think it's right to argue with what the government's doing, is kind of, you know, immature. And so, like I said at the beginning of this podcast, this one was going to have some big opinions, and that is my big opinion. I do really honestly believe that the governments of Canada and the province are really working hard to do something about affordability for Canadians in housing, and if you have another opinion about that, absolutely shoot me off an email or give me a call. I'm happy to talk to you about that. You can even come on the show and tell me what you think. Tell everybody what you think, but unless you have some other solutions, I don't know what another solution would be.

Speaker 1: 15:59

Once again, thanks so much for listening to Keeping it Real. If you were looking at the High Five Fridays last week, you would have seen my new initiative that is coming out the Canadian Women in Real Estate Foundation. I will be launching that toward the end of this month. I hope I have to wait for a couple of things to happen first, which are very important, but I'm very excited about this initiative. It's going to really help build women up who work in this industry and help put us in positions where we are making some of the policies that surround real estate in Canada. So stay tuned for more news on that and again, thanks very much. Have a wonderful weekend. You can get Keeping it Real anywhere. You get your podcasts, including spotify and apple music, or you could just head on over to my website at northvanhomesalescom slash podcast and on that website you will find all kinds of really awesome stuff, like a buyer's guide or a seller's guide that include everything you need to know about buying or selling a home in british columbia. See you next week. Thank you.