Don’t Call It a Condo Bailout. It’s Rent-to-Own and It Can Work

Julie is the name I’ll give a nurse I know at St. Paul’s Hospital. She earns a good salary and pays her rent on time. She has never missed a payment in her life. She is exactly the kind of person any society would want to see become a homeowner: stable, responsible, rooted in her community.

But Julie cannot buy a home, because she cannot save a down payment fast enough in a city where rents consume everything she earns above her basic expenses. She is not asking for charity. She is asking for a path to ownership — a first rung on a ladder that, right now, does not exist for her.

That is the person I believe B.C. Premier David Eby and Prime Minister Mark Carney had in mind when, on June 18, a federal government press release pledged a “Canada-British Columbia Partnership on Condo Conversion.”

Eby has said he wished the idea could have been shared with more nuance a bit later. But the announcement offered a preliminary peek at a proposal to buy slow-selling condos at below market prices and convert them to rent-to-own affordable housing.

If it’s implemented, Julie and thousands more would be provided opportunities to become not permanent renters of government-owned units, but future owners.

You would not know that from the political debate that ensued. Conservative Leader Pierre Poilievre called the federal-provincial condo conversion initiative a bailout. The commentariat proclaimed the program would “privatize profits, socialize losses.”

Here is the pragmatic reality: if it’s done badly, the critics are right. A government that buys distressed housing at prices close to what developers paid does socialize private losses. But that is not an argument against this program. It is an argument about how to build it.

As a person who works in real estate finance and housing capital formation in British Columbia, allow me to offer my view of the proposal and address some key questions raised about it.

Doesn’t Britain’s flawed experiment offer a cautionary tale?

I do not currently own a condo or invest in any condo development in this province, although I have had such investments in the past. I say that not as a legal disclaimer but because it matters for what follows. I believe housing is the medium by which a lot of structural injustice is perpetuated, so my interest in this specific policy framework is strictly structural and motivated by my desire to live in a more just and less polarized society.

I have no direct personal or corporate investment stake in the condo inventories under discussion. I serve on the board of a non-partisan think tank and have shared my views on occasion with policymakers at all levels of government: federal, provincial and municipal.

I have also spent years volunteering in Vancouver's Downtown Eastside, including serving on the board of Union Gospel Mission — ultimately as vice-chair — working alongside people for whom the failure of housing policy is not an abstraction but a daily reality. I am also an immigrant who lost my father at a young age and grew up in a household with financial precarity, including being part of a 10-person household living in a small three-bedroom, one-and-a-half-bathroom townhouse in our family’s early years in Canada. That experience shapes how I read what is being proposed here.

The “socializing losses” critics may point to cautionary lessons provided by Britain nearly two decades ago. When the U.K. government bulk-bought unsold developer stock after the 2008 crash, its HomeBuy Direct scheme funnelled 64 per cent of the money to the four largest house-builders, propped up inflated prices and left buyers who purchased in 2008 reselling at a loss of more than 20 per cent three years later. That was a bailout.

But Ireland did the opposite: its National Asset Management Agency bought distressed property at an average discount of 57 per cent, kept developers fully liable for what they owed and ultimately returned billions to the public purse. Same instrument, opposite outcomes — and the difference was transaction strategy and price discipline.

The question for British Columbia is not whether to act. It is whether it acts like Ireland or like Britain.

Start with who actually bears the loss in this transaction. The government has said it intends to negotiate below developers' asking prices — and, in a glutted market, to acquire many units below what they cost to build. There are currently more than 4,300 completed but unabsorbed condo units across Metro Vancouver — up 76 per cent from a year ago. Developers holding that inventory are not in a strong negotiating position. A purchase at below replacement cost is not a rescue. It is an acquisition. The developer crystallizes a loss. The public gets an asset.

As Premier Eby has put it, the plan “doesn’t provide a cent of profit to developers that are in over their head.” That is the opposite of socializing losses; it is the government acting as a disciplined buyer in a distressed market — and developers bearing the consequences of their own decisions.

This distinction matters enormously, and the market is already confirming it. Private investment firms are bulk-buying condo inventory at discounted prices in both Vancouver and Toronto right now. Sophisticated private capital is clearly seeing durable value in acquiring residential real estate at today's prices. The government is recognizing the same opportunity. The difference is where the benefit flows: to private investors, or to British Columbian families who have been shut out of ownership. That is the government’s own stated test. As the prime minister put it, Ottawa did not “start with developers”; it started “with Canadians.”

Isn’t it better to just let the market decide?

The "let the market correct itself" argument deserves a direct answer, not a dismissal. Yes, if the government did nothing, some developers would eventually go into receivership. Units would be auctioned off at lower prices. Someone would buy them, probably an investor, and someone would eventually live in them. The market would clear. The problem is the timeline. In B.C.'s regulatory environment, a receivership cycle routinely takes years. And the person who emerges on the other side able to buy at the corrected price is far more likely to be a capital-rich investor than Julie, our nurse at St. Paul's.

Market corrections are not morally tidy instruments that punish only the deserving and reward only the virtuous. They tend to reward whoever has the most liquidity when prices bottom. Telling Julie to wait for the market to clear is telling her to stay shut out of home ownership until whoever shows up with the most cash gets there first.

Sophisticated institutional investors have the balance sheets, access to credit and market insight to move to the front of the line to perpetuate the financialization of the housing market in Canada during times of market softness. We are already seeing signs of this. Earlier this year, the founders of Minto REIT partnered with a division of the $160-billion CC&L Financial Group to privatize their REIT at a 32 per cent premium — they clearly saw an opportunity that retail investors did not.

The federal and provincial governments, by contrast, have the best access to capital of any buyer in the market — they are the best-equipped purchasers precisely when markets seize up, the patient, counter-cyclical buyers that disciplined stewardship of public money is supposed to produce.

The bailout framing also assumes that doing nothing has no cost. It does. The cost to produce new housing has not meaningfully declined even as demand has softened — permitting delays, financing costs and construction labour all remain expensive. The pipeline of future supply is collapsing precisely when it should be building. If the government can acquire finished, ready-to-occupy homes for less than what it would cost to build them — without the multi-year development cycle, and with zero risk of cost overruns — it is acquiring a real asset at a discount. And it is putting families into homes years before a conventional development cycle would.

Won’t the government be stuck as permanent landlord?

One more misreading requires correction, and it may be the most consequential of all: this program is not a plan to make government a forever landlord. That framing, whether it comes from critics on the right or skeptics on the left, fundamentally misunderstands what is being proposed.

The types of ownership models that should be considered are rent-to-own and co-ownership structures in which government holds a share of equity alongside the buyer, functioning as a silent partner (like what we have already seen with the Attainable Housing Initiative that is being piloted on Vancouver’s Heather Lands).

These are specifically designed to move people toward ownership, not to make them permanent renters of state-owned units. Under a rent-to-own model, a portion of each monthly payment builds equity. The government’s stake shrinks over time as the resident’s grows. The end point is not a tenant; it is an owner.

Here is how that could work in practice. A qualifying buyer — Julie, our nurse — enters into a rent-to-own agreement with the government. She pays a monthly housing charge, structured like rent, but a defined portion of every payment is credited as equity toward the purchase price of the unit.

The government retains a co-ownership stake, functioning as a silent equity partner: it does not collect rent in the traditional sense, and it does not profit from the arrangement in the near term.

Over time — typically five to 10 years — Julie’s accumulated equity credits, combined with any appreciation in the unit’s value, grow her ownership share. She can exit the arrangement in one of two ways. She exercises her option to purchase the unit outright, using her built-up equity as her down payment and financing the balance through a conventional mortgage she can now qualify for. Or, if circumstances change, she can exit the agreement and recover the equity portion of what she paid in.

The government’s stake does not disappear — it is either bought out when Julie purchases, or it remains as a shared-equity interest that is recycled into the next qualifying household.

From Julie’s first monthly payment, she is an owner in progress. The equity structure is the point. It solves the precise problem that locks Julie out: not her income, not her credit, not her work history, but the impossibility of accumulating a down payment while paying rent in one of the most expensive housing markets in the world. Rent-to-own removes that barrier without requiring buyers to take on mortgage debt they cannot carry from Day 1. It meets people where they are — employed, reliable, creditworthy, and simply unable to bridge the gap between renting and owning.

Why promote ownership over other ways of housing?

There is a fairer critique, and it comes from the left: Why ownership at all? Why not direct the same acquisition dollars toward non-market rental, co-operatives or community land trusts?

It is a serious question, and the honest answer is that this is not an either-or. Nothing about a rent-to-own stream precludes directing a portion of acquired units into permanent non-market housing — a well-designed program should do both. But the shared-equity model is not a privatization of public assets.

When Julie eventually buys out the government’s stake, the public capital comes back — carrying its share of any appreciation — and revolves into the next qualifying household. The public dollar is not spent; it is recycled. And security of tenure — the ability to put down roots and build a stake in the place you live — is a good that renters in this market are systematically denied.

A housing system serious about fairness should offer non-market homes for those who need them, and also an on-ramp to ownership for those who have been locked out of one.

What this program attempts to create — imperfectly, incrementally, with details still to be filled in — is something Canada does not currently have at meaningful scale: a government-backed pathway to home ownership for middle-income earners. Not traditional social housing. Not market condos at peak prices. Something in between — a structured on-ramp to ownership for the teacher, the paramedic, the nurse who earns too much to qualify for subsidized housing and too little to save a down payment in this market.

Housing policy in this country has long had programs for the very poor and a market that works reasonably well for the wealthy. The missing middle — people with good incomes, stable employment and no equity — has largely been left to fend for itself. This program, if structured correctly, is the beginning of a serious answer to that gap.

Why am I optimistic this can succeed?

I know a version of this can work, because I grew up inside one. I was born in Singapore, where near-universal home ownership was achieved not by the market alone, and not by social housing as Canadians conceive it, but by a state that assembles land, builds at scale through its Housing and Development Board and acts as a patient financial partner while families buy in.

Singapore is not Canada; its land regime and its politics do not transplant here. But the principle underneath does: government-enabled home ownership, delivered with discipline, is not a fiscal indulgence. It has been a cornerstone of social stability and middle-class formation in one of the most successful nation-building projects of the past 60 years.

When I first immigrated to Canada from Singapore with my family in the mid-1970s, Canadian per capita income was three or four times Singapore’s. Today, the average Singaporean enjoys more than twice the per capita income of the average Canadian on a purchasing power parity basis. And Singapore has virtually no homelessness — and a 90 per cent home ownership rate.

If the program is delivered with discipline — acquisition below replacement cost — it deserves support. If not — if the government pays above market prices, buys units that don't serve middle-income buyers, or structures the program in ways that protect developer margins rather than maximizing public value — the charge will be fair, and the program should be condemned on those grounds.

But that conversation requires engaging with what is actually being proposed.

The nurse who cannot save a down payment is not a theoretical construct. Julie represents the tens of thousands of British Columbians — nurses, teachers, firefighters, tradespeople — who work hard, hold good jobs, pay their taxes and help build the communities the rest of us depend on, but who have been systematically shut out of ownership by a housing system that was never designed with them in mind.

A government rent-to-own program, built with that discipline, changes that. It gives Julie not a handout but a structure: monthly payments that build her equity, a government partner whose stake shrinks as hers grows, and a finish line that is ownership rather than indefinite tenancy. Done right, it is a rung to home ownership for those who have been locked out of the market. That is what it should be judged on. Not whether a slogan applies. Whether she gets a home — and a stake in the place she already calls hers.