The bail-out

Days ago the PM, the leader of the BC government and various poohbahs announced a plan to inject five billion into the local property market, where few can afford to buy. When it comes to housing its locals, Vancouver has become a global disgrace. Prices are nuts.

Part of the plan was to bulk-buy over two thousand empty, new condos that developers have been unable to flog and eventually resell them at affordable prices. The inventory of vacant new-builds soared 76% in the past year as projects started years ago came to market in a housing bust.

Lots of buyers bailed. Deals failed. It’s a mess. Heavy losses have pushed some builders towards, or into, insolvency. Thousands of construction jobs are affected. And builders going paws-up in 2026 means fewer homes coming to market in, say, 2030 – when Trump is a bad memory and the world stabilizes.

Anyway, enough people thought sucking up these units was a good enough idea to birth the “Canada British Columbia Partnership on Condo Conversion” – announced last Friday.

Details were nebulous – which was the first mistake made. In the absence of facts, the conspiracists, nihilists, critics, Lib-haters and enemies of the entire real estate complex will just make them, up. So they did.

Fanned by the great opportunist and ‘Canada-is-broken guy (who jumped on a plane to YVR immediately), Pierre Poilievre, the fires raged. Social media lit up. Why, he asked, are we bailing out developers, subsidizing bad business decisions and not letting the free market crush them? PP mined the animus. Soon we heard that Ottawa would spend $3.2 billion to buy 2,200 condos for an outrageous sum of $1.45 million each that would become social housing units. Developers would be paid in full by taxpayers for condos nobody wanted to buy, because they’re dog crates and suck. Plus hard-working Canadians with big mortgages would see others being given identical homes for basically nothing.

Outrage.

So, what do we actually know?

The Condo Conversion plan has no budget attached to it yet.

The $3.2 billion referenced is to build out local infrastructure in BC over the next ten years, reducing the amount developers pay for as-yet unbuilt homes – which should reduce the cost of each by about $40,000. Nothing to do with unsold condos.

The bulk-buy vacant condo deal is being negotiated, will be rolled out in the autumn and make use of ‘innovative financing tools’. That could be loans. It could be tax credits. It’s unlikely to be a cash bailout – since Carney ain’t that dumb.

The condos, once bought and remarketed will not be social housing. They will be sold as ‘affordable’ housing. In Van these days that’s something akin to $800,000.

This is not just a federal initiative, of course. Half of the deal – whatever it is – will be covered by the BC government. The premier asks why new two-bedroom condo units should sit empty when there’s a housing shortage and people are screaming at government to ‘do something’.

Carney and BC’s Eby also say repurposing vacant condos is the fastest way possible to create more affordable housing without waiting four or five years for it to be designed, approved, financed and built. After all, PP has been yelling for a year and a half that Carney has done nothing. Here’s something.

Critics say this move establishes an artificial taxpayer-funded price floor and doesn’t allow real estate to crash. But if a collapse were to happen, it would be here by now. Instead, sales levels are creeping back and price declines abating. If now-expensive condos are forced back on the market at affordable prices, the price ceiling for similar units is automatically dropped. In this case the feds would be a driver of cheaper, not more expensive, housing.

Do people not figure this out on their own?

And what about the developers who built units they can’t sell? Is this a bail-out? Don’t they deserve to be destroyed and drown in the swamp of their own failed avarice?

Of course it’s a bail-out. Like when the feds saved the Canadian auto industry during the Credit Crisis – and with it tens of thousands of jobs. Allowing the construction business to go down would put a lot of trades out of work, halt construction on new projects and pretty much guarantee a housing shortage – and higher prices – once the dust clears in a few years. That seems pretty obvious. It’s called ‘planning’.

Was this bad politics? Lousy optics? Did these guys blow it by announcing something they had yet to noodle out and explain fully?

Duh. That’s obvious. The banker-boy took a hit.

About the picture: “A pic attached for your consideration, to send Zoey into blog fame,” writes Erin. “She found these beauts at work.  I got them back to the truck for her.  Now proudly displayed on the lawn at home as treasure, to be chewed on occasionally.  Thank you for the blog.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2026/06/24/the-bail-out/