On June 18, while visiting Vancouver for the FIFA World Cup, Prime Minister Mark Carney announced a new package of federal housing and infrastructure funding for British Columbia. He also spoke of a new housing policy tool: the Canada-British Columbia Partnership on Condo Conversion—the only detail of which was to “leverage innovative financing tools to convert more than 2,200 vacant condo units in priority growth areas into affordable homes.”
Observers on both the left and the right instantly pilloried the new partnership. Commentators on the right want market forces to do their work so that condo prices fall, while those on the left see justice in letting greedy developers eat dirt. Opposition leader Pierre Poilievre called for the House ethics committee to investigate this “condo bailout.” One wonders why the two governments didn’t wait until they had something more concrete to offer the public.
Subsequent remarks to the media clarified that this is primarily a BC government initiative to purchase condos that would go into a new rent-to-own program. Each of the BC and federal governments will put up $150 million in cash. Another $1.15 billion is notionally allocated for financing or loans though how this breaks down between BC and the feds is not clear. BC Premier David Eby wants to buy units below the cost of construction, while BC Housing minister Christine Boyle emphasized that the government intends to “negotiate a good price” by buying in bulk. That’s about all we know at this point.
The Partnership on Condo Conversion is clearly a bailout—in the sense that it would help the balance sheets of distressed developers, put a floor on condo pricing and prevent losses in the banking system. On the other hand, Metro Vancouver is lacking genuinely affordable housing for ordinary working people and if there’s an opportunity to use the current moment to improve that situation, we should at least consider it. Obviously, paying $1 million for a vacant one-bedroom is a non-starter, but arguably, there is a price point where buying housing assets in bulk could make sense. The difficulty is the great divergence between home prices and incomes that has occurred over the past couple of decades.
Let’s review the details on the inventory of unsold condos and crunch a few numbers based on what we know about incomes and affordability. While the BC government could thread the needle on this program, much depends on price, which units are acquired and for whom. A better option for the province would be to restore the similar amount of funding for non-profit housing that was abruptly cancelled in February’s BC budget.
Absorb this
As of May 2026, CMHC reports that there were 5,849 “completed and unabsorbed apartments” (i.e. new empty condos) across BC, of which 4,376 units were in Metro Vancouver. Within Metro Vancouver the distribution of unsold condos is concentrated in four cities: Burnaby (1,179 units, 27 per cent of the total), Richmond (961 units, 22 per cent), Coquitlam (602 units, 14 per cent) and Vancouver (457 units, 10 per cent). Premier Eby also remarked that condos in the City of Vancouver were too expensive so the focus will be on the inner suburbs in Metro Vancouver. Politics may tempt the government to extend purchases to other parts of the province.
With a headline number of 2,200 units, the proposed BC-federal condo bailout thus represents about half of the unsold Metro Vancouver inventory. As the figure below shows, the number of unabsorbed units shot up dramatically over the past couple years to new all-time highs. In May 2024, there were only 1,262 “unabsorbed” units in Metro Vancouver.
In light of the currently weak housing ownership market overall, this situation is going to continue. As developers complete new projects, their empty units add to the total number of unabsorbed. As of May, there were about 30,000 condo apartments under construction. The majority of these would have already been pre-sold but if 15 to 20 per cent remain unsold, then some 4,500 to 6,000 units could be added to the glut of new condos within a couple years.
Thus far, developers with unsold units have been holding out from major price cuts, hoping for a housing market rebound that has yet to materialize. Interest rate cuts they anticipated in 2026, which would have boosted home sales, have been waylaid by the surge in inflation arising from the U.S. war on Iran. For developers, unsold inventory has the carrying costs of property taxes and interest on financing. At some point, they will have to lower prices so that empty units move. Policy makers are also concerned that new housing starts will plummet, affecting construction employment, although this has yet to happen as most new apartment projects are rental not condo projects.
According to the CMHC data, more than one-third (35 per cent) of the unabsorbed units across Metro Vancouver were listed above $1 million, rising to 58 per cent with asking prices above $800,000. Another third (34 per cent) are listed between $600,000 and $800,000, while only eight per cent are below $600,000. The data do not tell us the numbers of studios, one- and two or more bedroom units, their size, nor do we know the price per square foot.
Afford this
The gap between current price points and anything remotely “affordable” is quite large. In 2024 Vancouver, median total income for individuals was $47,000. For economic families, median total income in 2024 was $135,400. Families, of course, necessarily need more space so smaller units are not going to be of interest.
A common threshold of affordability is for households to spend less than 30 per cent of gross (pre-tax) income on housing. The table shows some stylized scenarios of how different condo prices translate into associated monthly mortgage, strata fees and property taxes. Then it calculates the minimum income required, with housing costs set at 30 per cent of gross income. The bigger the discount the government can negotiate with developers, the further down the income ladder the program could reach.
With a purported budget of $1.45 billion, buying 2,200 units would average almost $660,000 per unit. At that average price, the bailout smell of the program would be too hard to ignore. Much depends on how much a haircut developers are willing to take for a guaranteed price in the short term versus the costs and risks of holding out for a better price.
At heart, the proposed rent-to-own program is just another first-time homebuyer program. That is not necessarily a bad thing, but we have also seen many iterations of first time buyer programs from both the feds and BC governments. Over the past decade there have been a plethora of tax incentives and exemptions, savings accounts, shared equity mortgages, and most recently, a no GST for new builds, for first-time buyers.
The core idea is the same: rather than cooling the housing market, these programs assist a narrow range of households to get into the home ownership market. In doing so, this inevitably props up real estate prices.
To narrow down the field, the government would need to impose some criteria on who is eligible to buy these units, and terms about any future resale, so that these units themselves don’t become another speculative investment. The devil is in the details of any such program and careful design considerations would be needed.
Notably, two first-time buyer programs had similarly challenging financing and eligibility requirements as would the proposed rent-to-own program, and both have been shelved. The federal First-Time Home Buyer Incentive shared-equity mortgage, which began in 2019, offered to take on between five and 10 per cent of a mortgage, was ended in 2024. The 2017 BC HOME partnership program provided a provincial loan matching the buyer’s down payment up to a total of five per cent, and was wound down a couple years later.
While the BC government could walk this knife edge, there’s good reason to be skeptical. Even if the government can step in as a middleman to buy supply in bulk, on the distribution side at best we have 2,200 lucky households that would be winners. All for a program that has enormous potential pitfalls structurally and politically.
Just fund non-market housing
The mess before us is largely the result of a failed investor-driven model of housing development, which relied on presales to investors and rising prices each year, juiced by a period of ultra low interest rates. In capitalist economies, euphoria often leads to over investment and a crash. This is BC’s turn for a correction.
If anything, the BC government should lean into those market forces. Currently, unsold inventory is exempted from BC’s Speculation and VacancyTax, which was brought in seven years ago specifically to address a perceived problem of empty condos. Exemptions could expire after one year, for example, and the rate on domestic owners (0.5 per cent of assessed value) could be raised in line with the higher rate for foreign owners (two per cent). Others have noted that additional public resources for the legal system to accelerate foreclosures and court-ordered sales would also speed up price declines.
Some commentators have accused the left of shadenfreude in regards to the liquidity and solvency squeeze being felt by developers. In reality, housing advocates have been arguing for decades that federal and provincial governments need to get seriously back in the game of developing new non-market housing. This includes cooperatives and other non-profit rental housing, which was widely supported from the 1960s to early 1990s, and still comprises a lot of the existing affordable housing stock.
The huge tragedy in all of this is that the newly announced condo bailout is the same size as the cut to non-profit housing made just a few months earlier in the BC Budget. BC had been slowly making progress in funding new non-market housing through its Community Housing Fund, which was created in 2018. Jill Atkey of the BC Non Profit Housing Association sums up the moment and comments:
Last year, non-profit housing providers responded in good faith to calls for proposals under key provincial housing programs. 89 projects were submitted under the 2025 Community Housing Fund, totaling roughly 7,700 homes and at least $38 million in pre-development costs. Zero projects were awarded and the call was cancelled. The deferral of Indigenous Housing Fund projects that were awarded in 2024 adds significantly to that total. This is to mention nothing about years of lost momentum toward delivering desperately needed affordable homes.
The most sensible thing to do is to drop the condo bailout, and redirect those funds back into the non-market Community Housing Fund while letting the private condo market find its own equilibrium. If the BC government is to intervene in the condo mess, it should be refocused around increasing the supply of non-market housing rather than trying to midwife home ownership. Even clarifying who this intervention is intended to help would put some parameters on the price point, unit size and locations.
Another possibility is expanding BC’s Rental Protection Fund, which was created a couple of years ago with $500 million for non-profits to acquire private market rentals. In this case, purchased condo units would go into a pool of non-market housing (whether managed by BC Housing or non-profits). This would make the most sense for buying entire buildings, where there’s integrated management and cleaning and so forth, rather than buying only the 20 to 30 per cent of units in a building that might be unsold. Again, much depends on what is available at what price, and purchased could be justified based on the future rental income.
Federal and BC officials should have known better than to drop this half-baked trial balloon. It was a rare political mis-step for Prime Minister Carney and I suspect it was just part of the bigger negotiation for BC to agree to a new bitumen pipeline from Alberta to the West Coast. At this point, it would probably be easiest politically to just walk away and drop the condo bailout, er, partnership. And come better prepared next time.
About the author
Marc Lee
Marc Lee is a Senior Economist with the Canadian Centre for Policy Alternatives. Marc joined the CCPA’s British Columbia office in 1998, and is one of Canada’s leading progressive commentators on economic and environmental policy issues. From 2009 to 2015, Marc led the CCPA’s Climate Justice Project (CJP), which published a wide range of research on fair and effective approaches to climate action through integrating principles of social justice. Marc continues to write about climate and energy policy, strategies for affordable housing, federal and provincial budgets and macroeconomics. Marc has an MA in Economics from Simon Fraser University and a BA in Economics from the University of Western Ontario. Marc is a past chair of the Progressive Economics Forum, a national network of heterodox economists. He also served as a Visiting Professor at Simon Fraser University’s School of Public Policy in 2024 to 2025.
