On the latest episode of Never Bored of Trade, Jaipaul and I dove headfirst into the federal government’s controversial new plan to bulk-buy unsold Vancouver condos. At first glance, it screams “developer bailout”, but we acknowledged that it comes down to implementation.
Because details were scant when we recorded, we mapped out the thin line between a good public policy and a total disaster:
Good Policy: The government capitalizes on a depressed real estate market, using its massive purchasing power to snap up these condos at rock-bottom, below-market prices. Instead of waiting years for slow, expensive new builds, they convert existing inventory into deeply affordable housing immediately.
The Disaster: The government steps in with a rescue package but leaves the units tethered to private ownership. Without permanent nonmarket stewardship, these condos will simply be held until the market rebounds, allowing private entities to profit off taxpayer-backed appreciation all over again.
Since recording, the actual shape of the plan has begun to emerge. The federal and B.C. governments intend to purchase over 2,200 unsold, vacant, or “distressed” condominium units across British Columbia, targeting regions like the Fraser Valley, Okanagan, and Vancouver Island where the math works. The total potential spending sits at $1.45 billion, with Ottawa covering roughly 10% ($145 million) and the B.C. government roughly matching that, while financing covers the rest. The plan aims to purchase units at below-market rates, below the cost of construction, or via bankruptcy proceedings, to deploy them as affordable housing under a rent-to-own framework.
A Brampton Man’s Take on B.C. Housing Policy
I want to reserve final judgment on a policy whose finer details are still unfolding (though that messy rollout is precisely the problem), but my current assessment centres on a few key economic friction points.
First, the upside of this policy boils down to a stark economic reality: soaring labour, energy, and material costs make new housing incredibly expensive to build from scratch. Investing public funds into existing structures uses capital more efficiently than building out net new inventory. Furthermore, while critics dismiss these unsold units as too small, the demand from low-income, one- and two-person households is staggering. The core issue isn’t the layout size; it’s the massive chasm between speculative market rents and what working-class tenants can actually afford. Government bulk-buying could bridge that gap instantly. And while Prime Minister Carney’s original phrasing made the plan sound like an industry lifeline, strict execution could turn the tables—forcing developers to sell at cost and well below market value, completely wiping out their profit margins.
But here’s the rub. In a normal market correction, builders sitting on stranded assets must aggressively slash prices themselves, naturally resetting the market floor for regular buyers. By stepping in, government intervention risks artificially insulating these builders from necessary losses, creating a classic case of moral hazard. This non-interventionist approach—letting the market clear its own excesses—is the hallmark of the Austrian school of economic thought.
Furthermore, the proposed rent-to-own model raises serious red flags. While rent-to-own initiatives target individuals who cannot qualify for conventional financing due to burdensome down-payment requirements, they do not permanently disentangle these units from the speculative market. True nonmarket stewardship, like a community land trust or a co-op model, does.
Comparing to Ontario’s HST Rebate
Lastly, it is worth looking at how this compares to Ontario’s Enhanced New Housing Rebate. Critics of the Ontario scheme rightly point out that the government foregoes billions in provincial and federal HST revenue while retaining absolutely zero equity in the real estate it subsidizes. The homes remain entirely inside the private, speculative market, leaving taxpayers footing the bill to lower the entry cost of a private asset that someone can simply flip a few years later for a massive profit.
I don’t disagree with this framing, but my counterargument is that the government wouldn’t collect tax revenue on unsold, unbuilt units anyway. More importantly, Ontario’s rebate isn’t masquerading as a low-income housing subsidy—it is explicitly a market incentive designed to spur economic activity. By offering full or partial tax breaks on homes valued up to an astonishing $1.85 million, it isn’t trying to solve deep affordability. While B.C.’s policy aims to deliver truly affordable, below-market housing to low-to-moderate-income renters, Ontario’s policy strictly intends to stimulate new construction sales and relieve the tax burden for middle-to-high-income homebuyers. We should therefore judge these policies by the specific problems they actually try to solve.
Ultimately, the choice between these two approaches comes down to a trade-off between social impact and execution. B.C.’s policy offers a massive potential upside for affordable supply and could transform how we scale public housing if we can figure out the implementation. Ontario’s policy, by contrast, provides a model of administrative simplicity, but it does absolutely nothing for deeply affordable housing.
So here’s my take on how to stick the landing on the B.C. policy:
- Ensure developers pay a price: Wring out the profit margins or ensure developers take an explicit loss. This is necessary to avoid the moral hazard that the Austrian approach protects against.
- Disconnect from the market permanently: Discard the individual rent-to-own structure in favour of a community land trust, co-op, or permanent stewardship under a non-profit housing provider. This is the only way to ensure these taxpayer-funded units stay affordable for the long haul.
With building costs sky-high and the federal government facing a 30-year deficit in affordable housing supply, I am cautiously optimistic about B.C.’s bulk-buy policy. The reality is simple: private corporations will scoop up this distressed condo inventory to rent it out at speculative market rates. I would much rather see the government outbid them, secure the stock, and guarantee these units remain deeply affordable for the long haul.
Do you hope a similar policy comes to Ontario?