Real Estate discussions

[WarrenC12]

Originally Posted by chowhou

The only scheme I can think of that makes sense is the government proposing to buy condos in bulk for Costco discounts to then rent/sell on their own.

What other "innovative financing tool" is there other than bulk discount?

They can also sell later when the market rebounds. I don't know what this looks like in the context of half sold strata developments though.

[WarrenC12]

Originally Posted by ecbin

I prefer the term homebuyer bailout considering these fees reductions are nearly entirely passed through to the buyer.

More like a tax cut. Instead of paying $100k in municipal "fees" as a part of your $500k condo, you pay $50k instead.

[kikin]

the market is already at rock bottom and isn't sustainable, a moderate rise in prices over the next decade is necessary and taxpayer money shouldn't be used to try to manipulate it

[whatnext]

Originally Posted by Chirpythecougar

With development charges the burden is placed solely on the home purchaser/renter. If the gov begins subsidizing the charges then the burden is spread out across all forms of taxpayers, hence lessening the burden on home purchasers/renters. Seems pretty obvious to me what the difference is.

Maybe we just need to go back to the days when municipalities didn’t rely on selling condos to fund a huge chunk of their activity. It wasn’t always so.

The model they’re trying to preserve lead to a huge chunk of Canadians being priced out of housing. It isn’t a model worth saving.

[WarrenC12]

Originally Posted by whatnext

Maybe we just need to go back to the days when municipalities didn’t rely on selling condos to fund a huge chunk of their activity. It wasn’t always so.

Your property taxes would go up significantly. I'm sure you'd be fine with that and we wouldn't hear an ounce of complaint.

[whatnext]

Originally Posted by WarrenC12

Your property taxes would go up significantly. I'm sure you'd be fine with that and we wouldn't hear an ounce of complaint.

Would they? Note the argument is always that these fees fund new parks and sewers etc for new residents. If you throttle back new residents you eliminate the need for those. They just need to cover the cost of maintaining existing infrastructure.

Ultimately this is just another half-assed measure that assumes the private sector will provide affordable housing if just given the right incentive. It hasn’t worked and it won’t work with this program.

[chowhou]

Originally Posted by whatnext

They just need to cover the cost of maintaining existing infrastructure.

I've got news for you about what the fees cover. Not to mention replacing old infrastructure with new infrastructure is also something that does normally need to be funded from property taxes but if you continually replace them to support new development you get rid of that cost.

[Migrant_Coconut]

Originally Posted by whatnext

... They just need to cover the cost of maintaining existing infrastructure.

Narrator voice: They did not cover the cost of maintaining existing infrastructure.

Also note that said infrastructure is inadequate for the city's long-term needs (e.g. Granville Connector) and/or requires outright replacement (e.g. Aquatic Centre).

[whatnext]

Originally Posted by chowhou

I've got news for you about what the fees cover. Not to mention replacing old infrastructure with new infrastructure is also something that does normally need to be funded from property taxes but if you continually replace them to support new development you get rid of that cost.

But didn’t you say this upthread?

Originally Posted by chowhou

Tying infrastructure spending to new development was always short sighted and bad policy.

It seems to me this just continues this only it is the Feds handing the money over to municipalities instead of developers.

[whatnext]

This sure sounds like a developer bailout if they will be buying condos that are actually built. Developers could just lose money like every other entity in a capitalist economy.

Critics slam government plan to 'bail out' sagging condo sector in B.C.
Feds and B.C. government to use up to $3 billion to buy vacant condo units, turn them into affordable housing
Katie DeRosa · CBC News · Posted: Jun 19, 2026 6:32 PM PDT | Last Updated: June 19

B.C. is facing a glut of empty condos. Thousands of Metro Vancouver units are sitting empty and some developers are facing insolvency.

Now, some housing experts are questioning a plan by the federal and provincial governments to buy some of those vacant units and turn them into affordable housing.

They say it amounts to a multibillion-dollar bailout for developers who refuse to lower prices to reflect a sluggish real estate market…

… from the Canada Mortgage and Housing Corporation shows that as of last month, there were 4,376 completed condos sitting empty in Metro Vancouver, a 76 per cent increase from the year before.

Yan has crunched the numbers, with his analysis showing that a third of all condos without owners in Metro Vancouver cost over $1 million. He questions how deep a discount the governments can get to make those units truly affordable. …

https://www.cbc.ca/news/canada/british-c...-bail-out-sagging-condo-sector-9.7242851

[ecbin]

Originally Posted by whatnext

This sure sounds like a developer bailout if they will be buying condos that are actually built. Developers could just lose money like every other entity in a capitalist economy.

That seems like evidence-free knee jerk conclusion jumping - nothing in the announcement says they're trying to make developers whole. It reads just as much as an opportunistic investment into the affordable housing market by taking distressed assets off the hands of developers.

It could very well be the case that it's a pure bailout but the article reads like a hit piece rather actual journalism (a habit Katie DeRosa seems to have when it comes to housing policy) - Andy Yan is not a credible housing expert and Jill Atkey's post on LI misrepresents a complex supply/demand problem we're facing to push her own agenda.

The gov't being involved in the "affordable" housing market is what they should be doing and if there's an opportunity to buy distressed assets that also keep a few more developers solvent then I'm for it - everyone benefits if it's done well.

I hope "done well" looks something like:

- the feds make some form of development fee "credit" - the feds pay some portion of the fees on behalf of the developer while the develop discounts the unit an equal amount. Money has already been set aside for this type of thing.
- local gov't forgive some portion of of the fees as their contribution to making these units "affordable". Most local gov'ts are trying to do this anyways so likely have budget for this.
- the feds help developers refinance some portion of the loans the developers have on these units and the developers give another discount for those savings. The gov't being the lender is easy peasy stuff.
- After discounting the development fees and refinancing the developments we're probably looking at 20-35% savings on the price of an unit which credibly gives the gov't a way to create units that can rent at below market rates (or be turned into some form of affordable units to be re-sold).
- There's enough distressed units that the feds can play some degree of hardball on the purchase of these units.

Developers get rid of a distressed asset without taking a huge bath (staying solvent), the gov't buys a bunch of units at lower than "market" prices through tools they control, and the public gets more "affordable" housing units right away versus a gov't project that'll take 8-10 years to make happen.

Everything I listed as the ideal has been openly discussed by housing advocates and they are entirely feasible today. Whether Carney or Robertson does all of this is unclear but it makes easy sense to do it - I have little faith in Robertson and some faith in Carney on this topic.

[whatnext]

Originally Posted by ecbin

…Developers get rid of a distressed asset without taking a huge bath (staying solvent), the gov't buys a bunch of units at lower than "market" prices through tools they control…

And thus avoiding a true price correction in the housing market. That’s a problem, not a feature.

[Migrant_Coconut]

Hey, so long as the builders are still building. We want to avoid a slump in construction that leads to more incoming residents fighting over less homes.

The big concern would be if the large developers use this subsidy to keep making overpriced shoeboxes and hoping for a second boom (knowing that the feds will bail them out again) instead of correcting and shifting to family-sized units.

[ecbin]

Originally Posted by whatnext

And thus avoiding a true price correction in the housing market. That’s a problem, not a feature.

If the price of getting the govt to fund more "affordable" housing units is that we see a slightly smaller housing correction then I'm not going to pearl clutch over it. If it means a few builders might avoid bankruptcy and live to start some unsubsidised housing projects then I'm game.

We need more "affordable" housing unit and we need thousands and thousands of them - this is a category of housing the gov't abandoned for for the past 30+ years. If the gov't is going to get into it again by buying up pre-existing, ready to move in housing units that aren't selling - units that are built to a higher standard that typical "affordable" housing (like liveable sizes for one thing) then I'm happy about it.

(I keep putting "affordable" in quotes because we're not seriously going to be doing truly affordable housing here - it's just going to be housing that's going to be more financially approachable.)

[WarrenC12]

Originally Posted by whatnext

Would they? Note the argument is always that these fees fund new parks and sewers etc for new residents. If you throttle back new residents you eliminate the need for those. They just need to cover the cost of maintaining existing infrastructure.

Ultimately this is just another half-assed measure that assumes the private sector will provide affordable housing if just given the right incentive. It hasn’t worked and it won’t work with this program.

You really need to educate yourself on where this money goes.

[GenWhy?]

"Yan has crunched the numbers, with his analysis showing that a third of all condos without owners in Metro Vancouver cost over $1 million"

When writing about real estate, and I'm not sure if this is a direct quote from Yan, but using the word "cost" is pretty loose journalism.

[chowhou]

Originally Posted by whatnext

But didn’t you say this upthread?

What exactly do you find inconsistent in what I said? Believe it or not, even with no new development we probably want to build new schools every so often, replace playgrounds, dig up and replace old sewer lines, etc. None of this should be predicated on new development.

[whatnext]

Originally Posted by ecbin

If the price of getting the govt to fund more "affordable" housing units is that we see a slightly smaller housing correction then I'm not going to pearl clutch over it. If it means a few builders might avoid bankruptcy and live to start some unsubsidised housing projects then I'm game.

We need more "affordable" housing unit and we need thousands and thousands of them - this is a category of housing the gov't abandoned for for the past 30+ years. If the gov't is going to get into it again by buying up pre-existing, ready to move in housing units that aren't selling - units that are built to a higher standard that typical "affordable" housing (like liveable sizes for one thing) then I'm happy about it.

(I keep putting "affordable" in quotes because we're not seriously going to be doing truly affordable housing here - it's just going to be housing that's going to be more financially approachable.)

As you point out, it isn't truly "affordable". And by denying the correction to find a true bottom millions will be impacted vs a few thousand who might get cheap rental on gov't units and a handful of developers who get bailed out.

And how is this going to work? Developer A has a project that's 45% sold -will the gov't buys the other 55% of the units? Do the Feds then rent them out? Do they control the strata council? Or do they palm it off to some charity (god forbid like Atira)? What happens if 10 years down the road a more conservative government decides to go full Thatcher and privatize thousands of these units, thus removing official affordable housing once again?

[Changing City]

Originally Posted by whatnext

As you point out, it isn't truly "affordable". And by denying the correction to find a true bottom millions will be impacted vs a few thousand who might get cheap rental on gov't units and a handful of developers who get bailed out.

And how is this going to work? Developer A has a project that's 45% sold -will the gov't buys the other 55% of the units? Do the Feds then rent them out? Do they control the strata council? Or do they palm it off to some charity (god forbid like Atira)? What happens if 10 years down the road a more conservative government decides to go full Thatcher and privatize thousands of these units, thus removing official affordable housing once again?

If the province and federal government buy a few condos that have already been built, it won't have any impact on the overall market at all. Even if it was 1,000 units, which seems a stretch, it's a tiny part of the market, and the 'correction to find a true bottom' will still play out with the tens of thousands of already built pre-owned homes that are offered for sale every year.

There probably aren't any projects that have already been built that are only 45% sold - usually the developer wouldn't have been able to get financing with that low a sales number.

[ecbin]

Originally Posted by whatnext

As you point out, it isn't truly "affordable". And by denying the correction to find a true bottom millions will be impacted vs a few thousand who might get cheap rental on gov't units and a handful of developers who get bailed out.

At least use numbers that are real rather than make stuff up. There are 17m homes in all of Canada and last year about 24k homes were sold in the GVRD (288k in the last 10 years). The CMHC estimates we have a housing shortage that requires an additional 3.5-6m additional homes to be built above our normal rate of construction in the next 10 years.

The feds stepping in to buy a couple thousand condos over the next couple years will, with any of these data points, be a mere drop in the bucket in the wholesale market correction that is happening right now.

Originally Posted by whatnext

And how is this going to work? Developer A has a project that's 45% sold -will the gov't buys the other 55% of the units? Do the Feds then rent them out? Do they control the strata council? Or do they palm it off to some charity (god forbid like Atira)? What happens if 10 years down the road a more conservative government decides to go full Thatcher and privatize thousands of these units, thus removing official affordable housing once again?

That's my whole point - you were making an evidence free knee jerk reaction to an announcement with no information beyond "innovative financing". This could totally be nothing more than a developer handout OR it could be a chance for the feds to play some hardball with the developers and end up with a bunch of distressed assets that they can use for "affordable" homes. There's absolutely NOTHING in the announcement that tells us which they plan on doing - all we can do now is put out an opinion on what we think it should/could be rather than form some hasty, illogical, and irrational conclusion.