Vacant units would be converted into affordable homes
The federal and British Columbia governments are defending a proposal to buy more than 2,200 unsold condo units and turn them into affordable homes, as completed inventory continues to build in parts of the province.
Prime Minister Mark Carney acknowledged that the plan had not been clearly explained after critics, including Opposition Leader Pierre Poilievre, described it as a bailout for developers.
"I don't think we've done—myself included—a particularly good job of rolling this out," Carney said at a news conference in Ottawa.
Carney and B.C. Premier David Eby announced the proposal last week as part of a wider housing and infrastructure agreement. The governments said they would use Build Canada Homes and BC Housing to convert vacant condo units in priority growth areas into affordable housing.
The proposal comes as ownership supply, particularly in the condo segment, remains under pressure. Canada Mortgage and Housing Corporation said in its spring housing supply report that that rising unsold inventories suggest some new supply may not be aligned with prospective homebuyer demand.
In the Vancouver census metropolitan area, CMHC data for May showed 6,149 completed and unabsorbed homeowner and condominium units across all dwelling types. Apartments accounted for 4,376 of those units. CMHC defines an unabsorbed unit as a completed housing unit that has not yet been sold.
Metro Vancouver resale data also points to softer apartment demand. Greater Vancouver Realtors said residential sales in the region fell 3.5% year over year in May, with apartment sales down 7.2%. The benchmark apartment price was $697,800, down 7.9% from a year earlier.
For the mortgage industry, the issue is not only whether the program can add affordable housing quickly, but how the purchases are structured. Buying unsold condos in bulk and below market value could affect project financing, valuations and how quickly developers can clear inventory. The rent-to-own details will also matter, especially for buyers who can afford monthly payments but have not saved enough for a down payment.
Opposition Leader Pierre Poilievre has called the plan a "bailout" for big developers and "a transfer of wealth from the have-nots to the have-yachts."
Carney said the proposal would help young families and people without down payments "build in" equity through a rent-to-buy program. Ottawa would contribute about $145 million, or 10% of the roughly $1.45 billion in potential spending. Eby later said B.C. would roughly match that amount, bringing public funding to about $300 million, with the rest coming from financing.
The federal Ministry of Housing said the units would be purchased below market value. Carney framed the proposal as a provincial initiative, adding that no developer had asked him for it directly.
The plan would involve buying "distressed condos" at a discount "at the right time," though he did not say whether all units would be offered through a rent-to-own model.
Eby also acknowledged that the program should have been announced after more details were available, but rejected criticism that it would amount to a developer "bailout." He said the plan would not work for units in the City of Vancouver, where prices remain too high, but could apply in regions such as the Fraser Valley, Okanagan and Vancouver Island.
"Ultimately we'll be buying below the cost of construction. No developers will be profiting from this,” Eby said.
Further details have not been released, including buyer eligibility, price points, financing terms and project criteria.
