{"id":759738,"date":"2026-06-25T07:27:00","date_gmt":"2026-06-25T07:27:00","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/759738\/"},"modified":"2026-06-25T07:27:00","modified_gmt":"2026-06-25T07:27:00","slug":"ottawa-should-bail-on-its-plan-to-bail-out-condo-developers","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/759738\/","title":{"rendered":"Ottawa should bail on its plan to bail out condo developers"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Prime Minister Mark Carney shakes hands with construction workers following a housing announcement in Vancouver on Thursday. The federal and B.C. governments plan to purchase more than 2,200 condos in the province to turn into affordable housing.Chad Hipolito\/The Canadian Press<\/p>\n

There are misguided policies, there are disastrously misguided policies, and then there are inexplicably disastrous misguided policies. The federal Liberals\u2019 plan to intervene in the British Columbia real estate market vaults well over that line. It may be the worst idea of Mark Carney\u2019s prime ministership.<\/p>\n

The idea is for the federal and B.C. governments to buy 2,200 condos in the province and turn them into affordable housing. While there is definitely a need for such housing, this is the wrong approach. Although the plan is still being worked out and there remain many questions \u2013 including how much it will cost \u2013 what is known about the concept sets off loud alarm bells.<\/p>\n

A primary concern is that the government is trying to solve a problem where it is not needed. The issue, we are told, is that there are thousands of condo units in B.C. that the development industry cannot sell. <\/p>\n

Opinion: Carney\u2019s ridiculous, myopic plan to bail out condo developers<\/a><\/p>\n

Ottawa to help finance program to buy unsold condo units in B.C. for affordable housing<\/a><\/p>\n

\u201cWith higher interest rates, weak investor demand, developers are stuck,\u201d Mr. Carney said in prepared remarks<\/a> for the announcement last week in Vancouver. \u201cThey do not want to sell at a loss, but they also cannot afford to hold the empty units indefinitely.\u201d<\/p>\n

To be clear, the industry is not \u201cstuck.\u201d They could sell these units, but they would have to lower the price to do so. Of course, selling at a loss would be a bad outcome for the developers. From a business point of view, they would prefer not to. But how does an unwillingness to do so become the government\u2019s problem?<\/p>\n

By stepping in, the government is allowing what is sometimes criticized as \u201cprivatizing profits and socializing losses.\u201d The development industry enjoyed a long boom time as real estate surged, particularly in Vancouver. If they overreached or failed to anticipate increases in interest rates, that is not the fault of government. If they built for an investor market that has since dried up, that was a gamble they made. Why should taxpayers across the country protect them from those choices? The moral hazard here is beyond obvious.<\/p>\n

Also, by preventing these condos selling at a loss, the government is artificially inflating the real estate market for everyone else. That\u2019s because lowering the prices of those condos enough to make them attractive to buyers would set a new standard for the market. Not doing so, by contrast, keeps asking prices buoyant.<\/p>\n

The government\u2019s plan actually creates a disincentive for any prospective investor thinking of renting out units. The cost of acquiring a unit would be higher than it would otherwise be, and rents \u2013 the income they\u2019d earn on it \u2013 lower because of government distortion of the market.<\/p>\n

Based on first-quarter data from the real estate consulting firm Zonda, The Globe and Mail calculated<\/a> that the average unsold newly built 500-square-foot condo in Vancouver was priced at around $455,000 for wood-frame construction or about $700,000 for a unit in a concrete building. If those are the sorts of units being bought and converted, that price tag could run from $1-billion to $1.4-billion for the acquisition alone.<\/p>\n

Opinion: In Canada\u2019s broken system, houses are too expensive to buy \u2013 and too expensive to build<\/a><\/p>\n

Which brings us to another concern. Last evening, Gregor Robertson, the Minister of Housing and Infrastructure, said on X<\/a> that the government would \u201cacquire units in bulk, at a discount to market value.\u201d How much of a discount? That isn\u2019t clear. What is clear is that the market is not buying. So anything more than what a private buyer would actually pay is a bailout to developers.<\/p>\n

An increase in affordable housing is needed in almost all Canadian cities. Particularly in Vancouver, which is the most expensive real estate market in the country. Taking homes the market isn\u2019t absorbing and turning them over to those who can\u2019t afford to pay the market rate can seem superficially attractive. <\/p>\n

In fact, the concept has found resonance beyond British Columbia. In Ontario, Premier Doug Ford announced<\/a> in March that his government would provide $300-million in loans to a real estate investor to buy unsold condos and convert them to rental units, some of them affordable.<\/p>\n

The people who end up in these affordable homes, whether in B.C. or Ontario, would be better off. But the downsides of the approach cannot be ignored. The Carney government would be wise to stop developing its plan to buy those 2,200 units in B.C. Instead of bailing out developers unwilling to sell at a loss, the Liberals should let the market do its job.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Prime Minister Mark Carney shakes hands with construction workers following a housing announcement…\n","protected":false},"author":2,"featured_media":746302,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[194295],"tags":[49,48,149489,20739],"class_list":["post-759738","post","type-post","status-publish","format-standard","has-post-thumbnail","category-ottawa","tag-ca","tag-canada","tag-no-promotion","tag-ottawa"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/759738","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=759738"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/759738\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/746302"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=759738"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=759738"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=759738"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}