Province launches incentive for homeowners to build secondary suites to address housing crisis

The B.C. government has launched a three-year pilot program aimed at increasing the supply of secondary suites in a bid to address the province’s housing crisis.

The new Secondary Suite Incentive Program is intended to encourage homeowners to build a secondary suite or unit on their property to rent it out below market value.

Premier David Eby says one of the main barriers keeping more basement suites or laneway homes from being built is the cost of opening them.

“There are people out there who say, we should let the market deal with housing, we should let people fend for themselves on these kinds of things,” Eby said.

“But this opportunity to support people in opening rental housing that is badly needed is another example of why government needs to be actively involved.”

Under the program, the government says it will offer up to 50 per cent of the total cost of renovations, to a maximum of $40,000, to add a secondary suite to a primary residence.

The loan can then be forgiven if the new suite is rented out at below-market rates for five years.

The program is intended to provide around 1,000 homeowners with the loans, with the expectation that 3,000 new below-market rate rental suites will be built.

B.C. Housing Minister Ravi Kahlon says the program has “checks and balances” in place to support and assist homeowners who wouldn’t normally be able to offer a rental property.

“Part of the measures that we’re doing with this program is also helping educate these new landowners [on] how to be landlords, what are the rules that they have to follow?,” Kahlon said.

“We’re providing guidance [about] how to go through your local governments to get these permits.”

The new program is part of the Homes for People action plan and a $19 billion housing investment through the provincial government.

As of Thursday, homeowners in most municipalities and regional districts across B.C. can apply to the program through BC Housing’s secondary suite website. Applicants must still obtain building and occupancy permits and have a BC Assessment value on their property below the current homeowner grant threshold, which in 2024 is $2.15 million. As well, the gross annual income of homeowners on the title of the home must be below $209,420.

This launch comes as B.C.’s new short-term rental rules impacting businesses such as Airbnb and VRBO came into effect as of Wednesday.