B.C. government says drop in revenue from construction slowdown has forced changes
Jonathan Fowlie
Sun
Linda Soloshy, a strata council president in Victoria, says owners of 17 units in her 39-unit building have applied to the Homeowner Protection Office for loans needed for repairs. Photograph by: Debra Brash, Canwest News Service, Vancouver Sun
The provincial government said Friday it has put the brakes on leaky-condo repair loans because the revenue stream from new construction used to finance the loans has dried up.
Housing Minister Rich Coleman’s office confirmed that the home-building slowdown and the resulting drop in revenue have “limited” the government’s ability to make repair loans, but gave no details.
The confirmation came after some owners of leaky condos said they are being shut out by a provincial program set up specifically to help them, and that they’re having to resort to extraordinary means to finance expensive repairs.
The Homeowner Protection Office (HPO), which was established in the late 1990s following two public inquiries, offers interest-free loans to owners of leaky condos to do repairs, and on Friday, the government said it has approved more than $670 million in loans since it was formed.
But owners said the program has stopped handing out money, seemingly because B.C.’s recession has left it with little to give.
“I don’t understand. It’s a government program to help people in this time of need,” said Randy Barnes, 35, who lives in a leaky condo building in Victoria that needs $1.6 million in repairs.
“What are you paying your taxes for?” he asked.
Barnes, a military avionics technician, said he needs to come up with just under $40,000 to pay for his share of repairs to his 39-unit building, and that he contacted the HPO months ago about arranging a loan.
Barnes said the HPO stopped returning his calls in the last couple of months, and he has had to piece together the funds through a combination of a line of credit, his personal savings and a $25,000 military distress loan.
Barnes’ strata council president, Linda Soloshy, said Friday this is a common complaint from other people in the building.
She said of the 39 units, owners of 17 have applied for HPO loans to get the money needed for repairs.
She said some, like Barnes, have found other sources, but others have been turned down by banks and other traditional lenders and don’t know where else to go.
“Many have no other alternative,” she said. “They’ve exhausted all their other resources and I don’t know how they are going to come up with this money.”
Soloshy added that some residents are having extra problems because the HPO has not officially turned them down, but instead is keeping their applications in limbo.
She said this makes it difficult to re-approach other lenders, who will generally consider helping only after someone has been officially turned down by the HPO.
“I had a lot of difficulty proving to the military that HPO wasn’t returning my calls,” Barnes said of getting his military distress loan.
“All I needed was something saying they had run out of funding,” he said. “They wouldn’t even get back to me regarding that.”
HPO officials would not discuss the issue Friday, referring questions to Housing and Social Development Minister Rich Coleman.
Coleman was not available for comment, but his office sent an e-mail with general information about the situation.
The e-mail said the HPO gets its funds through a $750 levy charged on all new residential construction units in B.C.
“The combination of a recent slowing of residential construction with an ongoing program demand has limited the HPO’s ability to provide financial assistance to all applicants,” the e-mail said, adding that the office continues to take applications for loans.
It did not provide any further details.
New Democratic Party housing critic Shane Simpson responded that the government should either find other ways to help leaky condo owners or be clear about turning people away.
“I understand the problem the HPO has, I understand the revenue challenges they have, but they either need to tell people they’re not going to be available for the foreseeable future, or tell people, ‘We are going to find a way to identify another revenue stream,'” he said.
“What they are doing is leaving people in limbo.”
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