Thoughts on a generational leap in co-op housing:
- The Federal Government has committed $25 billion to support housing construction.
- In the short term, ~27,000 condos in Toronto and Vancouver will be unsold or delivered to market.
- There are currently 92,000 co-op homes in Canada.
Many developers won’t survive the debt burden tied to this unsold inventory. Losing some equity is better than losing everything. So what if—rather than waiting years for new builds—the Federal Government embarked on a mass acquisition strategy? Buy up these homes at 85 cents on the dollar, well below replacement cost. Yes, some will take a loss, but it’s better than systemic failure—and we need home builders to survive for the future.
If the government acquired all 27,000 units at $600,000 each, that’s $16.2 billion—within the scope of the current commitment. They could then convert these homes into new co-ops, increasing Canada’s co-op housing stock by 30% in just two years.
As these co-ops come online, they could begin making payments on the homes, either backed by CMHC or transitioned to traditional lenders.
I’m sure there are dozens of reasons why this might not work—but here’s what it would accomplish:
1. Addresses the housing crisis now, not 5–10 years from now.
2. Mitigates economic losses for homebuilders, lenders, and investors.
3. Acts counter-cyclically: buy low, stabilize the market, lower future public costs.
4. Delivers a generational expansion of non-market housing.
5. Reduces pressure on market rents across the board.
Thoughts?