By Sonal Gupta, Canada’s National Observer, Local Journalism Initiative Reporter

Empty condos and a housing crisis coexist in Metro Vancouver, and the federal and provincial governments believe they have a fix.

Under a new 10-year agreement, the Carney government says it will spend more than $5 billion across the province for housing, transit and related infrastructure through the Build Communities Strong Fund. Part of the deal is a plan to turn more than 2,200 of BC’s vacant condo units into affordable housing. In its June 18 announcement, the Prime Minister’s Office called it “one of the fastest and most efficient ways to increase housing supply.” 

But the plan is igniting debate about whether governments can turn expensive private-market condos into affordable homes or if public money will simply help developers and lenders clear units they couldn’t otherwise sell. 

Conservative Leader Pierre Poilievre is calling the plan a “bailout” for developers who built during a hotter market and are now stuck with unsold inventory. 

According to the Canada Mortgage and Housing Corporation (CMHC), the number of completed but unsold homes and condos in Metro Vancouver skyrocketed to 6,149 in May 2026. Condo apartments made up the bulk, rising 76 per cent from the same time last year. These are concentrated in several parts of the region, led by Richmond and the Tri-Cities, which include Coquitlam, Port Coquitlam and Port Moody and Central Park/Metrotown.

“Part of the reason unsold inventories have risen is due to the recent influx of supply,” Michael Mak, a CMHC economist, told Canada’s National Observer. Condo completions have climbed quickly over the past two years as projects started in the early 2020s are finished, he said. Over the last 35 years, the largest number of condo completions occurred in 2025 in Metro Vancouver. 

Many developers bought land and planned projects based on the market they saw in 2022, when interest rates were low, immigration was high and they expected rents and condo prices to keep rising, said Thomas Davidoff, director of the UBC’s Centre for Urban Economics and Real Estate. That changed as borrowing costs rose and population growth slowed, leaving some builders with finished units they cannot sell. “People take chances in business. They have to be open to taking losses when those bets go wrong,” Davidoff said.

Demand has also weakened, Mak said. Mortgage rates are high enough to limit what buyers can afford, while economic uncertainty and elevated unemployment may be causing some buyers to delay purchases. Higher rental vacancies, slower rent growth and new rental supply have also made condos less attractive to investors who would normally buy units to rent out.

The government plan could be both a way to support a weak condo market and make practical use of homes that are already built, but the plan only makes sense if governments can buy units at a discount, said Tsur Somerville, professor at UBC’s Sauder School of Business and real estate economist. 

If governments can buy multiple units from developers, lenders or receivers at prices below the cost of building new affordable housing, the idea could have merit. But “if all you’re going to do is buy a lot of stuff at a list price that people can’t sell, that looks very lousy,” Somerville said.

The greater risk may not be developers, but lenders, Davidoff said. If developers cannot repay loans, banks and other lenders can be affected. That can ripple through the broader economy and make future housing construction harder to finance.

“If banks are short of capital, we’re in big trouble,” he said.

That is one argument for government action, but there is a tradeoff: leaving condos on the market could push prices down and help some buyers, while a sharper drop could make builders scrap new projects and create another supply problem later. “If things don’t sell, nothing moves,” Somerville said. “Prices crash and then nobody starts building anything for 10 years.”

CMHC also expects new home construction to fall in coming years as weak new-home sales and presale demand make it harder for condo projects to proceed, Mak said.

The plan also raises concerns about how governments should use limited housing dollars. Brand-new condos are among the most expensive kinds of housing to subsidize and offering them at deep discounts could help only a small number of households, Davidoff said. 

Governments should also be clear about who the homes are meant to serve, he added. Helping a teacher or firefighter rent a new condo below market is not the same as helping someone sleeping in a car or struggling with addiction, said Davidoff. 

A better approach could be to treat the condos as public investments. If governments can buy them cheaply, rent them out and cover their costs, any revenue could be directed to people with deeper housing needs, including those who need addiction support or direct cash assistance because they are sleeping in cars or staying temporarily with relatives. “You don’t do redistribution to people in need by getting them brand new condo units,” Davidoff said.

But buying the units is only the first step, said Tony Gioventu, executive director of the Condominium Home Owners Association of BC. A government or non-profit owner would still have to pay monthly strata fees, insurance, property taxes, repairs and possible special levies, just like any other condo owner — and such costs could affect whether the units remain affordable over time. “It can enable more housing, but not affordable housing,” he said.

Gioventu said similar mixed-housing models already exist in BC, including developments where non-profit or social housing operates alongside market condos. Those arrangements can work, but only when housing providers understand the building’s rules, shared costs and long-term repair obligations before they buy. “The devil in the details still stands,” Gioventu said. “In concept, it’s a great idea… The details of how this looks just need to be worked out.”

Links of Interest:

• Articles about, of mentioning, affordable housing
• Articles about, or mentioning, PM Mark Carney
• Articles about, or mentioning, David Eby

Top image credit: Prime Minister Mark Carney and BC Premier David Eby announced a new housing partnership at a news conference in Vancouver on June 18, 2026. – Photo by Province of British Columbia/Flickr (CC BY-NC-ND 4.0)

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