The Government Will Have to Overpay to Save the Day

Why Buying Doomed Condos and Funding Rentals Might Be the Only Way Out

Let’s be honest—this wasn’t the plan. Not for the developers. Not for the investors. And definitely not for the bureaucrats now faced with a choice: let a wave of half-built condo corps rot in silence or step in, write a cheque with too many zeroes, and pretend this was all part of a bold affordable housing strategy.

From my seat—high up in the precarious perch of a Toronto real estate developer watching the entire condo market get caught with its pants down—it’s clear: many of these projects aren’t going to make it. Pre-sales are frozen. Construction costs didn’t get the memo about the rate hikes. And interest carry? It's the horror story devs whisper to each other over lukewarm beers at industry events.

So what’s the government to do?

Buy them.
Every. Last. One.

Buy the land. Buy the hole in the ground. Buy the zoning, the plans, the foundation forms that haven't seen concrete in six months. Pay too much—because you’ll have to. Then hand the keys back to the same developers (yes, even the ones who got us here), but this time, lend them the money at 0%, tell them to build rentals, and for the love of housing, get out of their way while they do it.

Now, I know what you're thinking: "Why reward failure? Why bail out over-leveraged developers who gambled and lost?" But here’s the thing—we're way past the stage where market discipline solves anything. If these projects collapse, so does the dream of ever hitting our housing targets. That 1.5 million new homes figure? It becomes the punchline of a cruel joke.

You know, this reminds me of a time I bought a beat-up house in the Bridle Path. I thought I was getting a deal. Turns out I was just the sucker with the deepest pockets and the biggest renovation budget. The place had mold, asbestos, raccoons in the attic—the whole HGTV nightmare package. But guess what? We turned that money pit into gold—because I knew what it could be, not what it was.

The government is in the same boat now. They’re going to look like fools paying top dollar for carcasses. But in five years, when there are thousands of new rentals instead of lawsuits, bankruptcies, and abandoned scaffolding, they'll look like visionaries.

Here's the part no one wants to say out loud: rental math works if you don’t have to pay market land prices and you get financing cheaper than a Costco hot dog. Remove those two barriers, and voila—you can actually build affordable rentals that cash flow.

The feds and the province need to stop pretending the market will course-correct on its own. It won’t. Not fast enough. And every month they delay, more projects die, more skilled trades leave the industry, and more Canadians move back in with their parents.

So yeah, they’ll have to overpay. But sometimes overpaying today is cheaper than the cleanup tomorrow.

Besides, it’s not like they haven’t blown money on dumber things.

See: the ArriveCAN app.

And if you’re reading this thinking, "Well, what now?"—here it is:

If you're a voter, call your MP. Tell them you're tired of watching zombie condos and runaway rents tag-team the housing market into oblivion.

If you're a policymaker, put your cape on. This is your hero arc. You don’t need another study, you need a chequebook and a spine.

And if you're a developer like me—dust off your spreadsheets, because if the government's dumb enough to overpay, be smart enough to actually build. Rentals. Not dreams of rate drops. Not 2-bed, 2-bath speculative Swiss bank accounts. Just housing people can actually live in.

It’s going to be messy. It’s going to be expensive.
But you either overpay now, or explain later why you let the whole thing collapse.

And trust me: that press conference will cost you more.