Carney defends condo-buying plan panned by critics as bailout

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials HomeNewsReal EstateCarney defends condo-buying plan panned by critics as bailoutThe PM said the overall dollar value of transactions contemplated by the condo conversion program is around $1.45 billionAuthor of the article: You can save this article by registering for free here. Or sign-in if you have an account.Opponents of the policy have highlighted the prospect of using taxpayer cash to underwrite business risk and socialize private losses, and the troubling incentive that may create. Photo by Jason Payne/PostmediaPrime Minister Mark Carney sought to explain a government plan to acquire vacant condos and convert them into affordable housing, which was slammed as a bailout for real estate developers after he announced it last week.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Subscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountorCarney and British Columbia Premier David Eby revealed on June 18 a plan for the federal and provincial governments to acquire and convert more than 2,200 vacant apartment units using government financing, without further details.It was immediately attacked by industry observers, as well as Carney’s main political rival, Conservative Leader Pierre Poilievre, as an unfair special favour for developers and banks.SUBSCRIBER EXCLUSIVE: FP West: Energy Insider brings you behind the oilpatch’s closed doors with exclusive insights from insiders every Wednesday morning.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of FP West: Energy Insider will soon be in your inbox.We encountered an issue signing you up. Please try againAt a news conference Thursday, Carney said he and the federal government had done a poor job of announcing and explaining the idea, and emphasized that the policy is still in an early phase.“There’s no specific contemplated transaction at this stage,” he said, adding that “if and when there are transactions, then judge those transactions on the basis of the economics of that, not on the concept.”Both Vancouver and Toronto are awash with unsold condos after a pandemic-era building boom was followed by rising interest rates and a cap on immigration. Weaker demand has forced developers to cancel projects, offer incentives or cut prices, and in some cases, see towers go into receivership.Carney said the overall dollar value of transactions contemplated by the condo conversion program is around $1.45 billion, and the federal government would provide “about 10 per cent of the financing.” The federal and BC governments would acquire distressed condos and buy “at a discount.”“We don’t care about the developer, but we care about the person, the family that can potentially move into the home,” Carney argued. The program would focus on rent-to-own, a model that allows people to build home equity or a down-payment folded into rental payments.Carney also said the idea was brought to the federal government by the BC government. Gregor Robertson, Carney’s housing minister and former Vancouver mayor, said on Wednesday that media had misreported the financial commitment, but only said he’d share more details “in the coming months.”Opponents of the policy have highlighted the prospect of using taxpayer cash to underwrite business risk and socialize private losses, and the troubling incentive that may create.“Carney’s condo bailout is the latest example of Liberals taking care of themselves and their friends, with your money,” a Conservative fundraising email said, painting it as a helping hand to B.C.’s influential real estate community.Critics have pointed to a February fundraiser Carney held in Vancouver that was attended by top B.C. developers.“No developer asked for this from me directly,” Carney said Thursday.The Urban Development Institute, which represents BC developers, came out against the plan on Wednesday, arguing instead for “long-term affordability requires policies that support the delivery of substantially more homes” such as a sales-tax rebate on new home purchases. Join the Conversation This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.