Federal-Provincial Plan to Convert Vacant B.C. Condos Sparks Debate Over Intent and Impact

Prime Minister Mark Carney stated on Thursday that developers did not "directly" request the creation of a federal-provincial program to purchase empty condominiums in British Columbia and convert them into affordable housing. Carney emphasized that the initiative was not pursued to benefit the real estate industry, but rather to address the province's affordable housing needs.

The proposed program has drawn criticism from opposition parties and some housing analysts, who have characterized it as a potential bailout for developers having difficulty selling condominium units, particularly in Vancouver and the Lower Mainland. When asked at a press conference in Ottawa about developer lobbying for government support, Carney responded, "No developer asked for this from me directly. We start, as we always do, with Canadians. We don’t start with developers. Yes, it’s great that there are developers and they build condos. What we care about is affordable housing, enough affordable housing, in this case, for the people of British Columbia."

Carney acknowledged shortcomings in the rollout of the plan, conceding that the federal and B.C. governments have "not done a particularly good job of rolling this out and explaining exactly what it is." He noted that further details about the mechanics of the program would not be available until the fall. Carney described the primary goal as converting "distressed" condos into "rent-to-own" opportunities for renters, allowing them to accumulate savings toward a future down payment to purchase the unit.

The financial structure of the plan would see governments provide about 10 per cent of the "overall dollar value contemplated" for financing available units, which Carney estimated at approximately $1.4 billion. Transactions under the program would be pursued only "at a discount at the right time," with specific transaction structures yet to be determined. "There’s no specific transactions, no specific contemplated transaction at this stage, but there is an opportunity," Carney said. He added, "I think the issue will be, if and when there are transactions, then judge those transactions on the basis of the economics of that, not on the concept."

Last week, Carney described the approach as leveraging "innovative financing tools from Build Canada Homes to convert thousands of vacant condos into affordable homes." According to Carney and provincial officials, there are about 2,200 vacant condominium units in B.C. priority growth areas. They argue that converting these units would represent the fastest and most efficient method to increase the province’s housing supply.

B.C. Premier David Eby also defended the plan during a press conference in Vancouver, clarifying that the program would not apply in Vancouver and the Lower Mainland because "the numbers don’t work" and "the market is going to correct." Instead, Eby indicated that the program would target purchases in regions such as the Fraser Valley, Okanagan, Vancouver Island, and other areas experiencing housing shortages. He stated, "At the end of the day, this will not be a net cost to taxpayers, it will give people an opportunity they never had, it will not give profits to developers who are in over their head. In fact, we expect to be buying buildings at below the cost of construction … (and) we expect developers to be taking losses on many of these initiatives."

Eby also addressed proposals from the development sector itself, saying, "The proposal being advanced by the developers themselves is that we eliminate the GST on people who already own homes and are seeking to buy another home, and that’s just not our priority. That would be a bailout. It would be giving a tax cut to developers in order to avoid them having to take a cut to their profits in selling their buildings."

The premier acknowledged the possibility that the program announcement was premature, noting that it may have been preferable to wait until financing and purchasing structures were finalized.

Conservative Leader Pierre Poilievre renewed his criticism of the plan on Thursday, describing it as a bailout that would "make home ownership even more difficult by forcing taxpayers to pay through their taxes, to bid against themselves when they try to buy a home." Poilievre argued, "The government inflated the housing market into a bubble, and now the bubble burst. So who’s going to pay the price? Mark Carney wants you — the welder, the waitress, the barber, the small business person — to pay through your taxes to bail out his developer friends. Mr. Carney says he wants an innovative financial solution to make expensive, empty condos into affordable, occupied ones. I have that innovative solution. Let the prices drop."

Eby characterized Poilievre’s position as "a different perspective" that would not address the immediate needs of families or individuals seeking housing. He urged that the program be given an opportunity to be evaluated on its specifics once fully developed. "If we crunch the numbers and bring it forward and people don’t like it, then that’s fine, but I would like the opportunity to be able to bring forward the program," Eby said.

The debate occurs against the backdrop of ongoing concern about housing affordability and supply in British Columbia. The government’s proposal seeks to address the issue by acquiring and converting vacant units and offering pathways to ownership for renters. The specifics of the program, including criteria for transactions, the extent of discounts, and the mechanics of rent-to-own arrangements, remain to be disclosed in the coming months.

As the policy’s details await finalization, the initiative faces scrutiny from those warning of potential unintended benefits for developers, as well as from those arguing for more direct market corrections. The program’s future impact on both housing supply and taxpayer cost will depend on the structures ultimately adopted and the market conditions at the time of implementation.