Municipalities are realizing the value of infrastructure and planning investments they have already made.Chris Young/The Canadian Press
Glen Murray is the former mayor of Winnipeg and a former Ontario MPP and cabinet minister. He helped establish the Collaborative Housing Accelerator Platform (CHAP).
The debate over governments purchasing unsold condominiums is asking the wrong question.
Critics are right to warn against governments becoming the buyer of last resort for failed condominium projects. That would socialize private losses, reward speculation and encourage developers and lenders to take greater risks, knowing taxpayers may absorb them.
But allowing thousands of approved housing projects to remain stalled is equally short-sighted.
Across the Greater Toronto and Hamilton Area alone, tens of thousands of homes have already received planning approvals, servicing agreements and, in many cases, have begun construction. These projects are not stalled because communities do not need them. They are stalled because the financial assumptions that supported condominium development no longer work.
Canada’s housing challenge is increasingly one of delivery, not planning approvals.
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The real question is not whether governments should bail out developers. It is whether we can rescue valuable housing projects without rewarding the business decisions that caused them to fail. That question led to the development of the Collaborative Housing Accelerator Platform (CHAP).
CHAP is not a government program. It emerged from a collaboration between Four Doors (an affordable housing non-profit), municipal planning and housing professionals, experienced development and construction managers, financial experts and a former municipal and provincial elected official – all of whom have confronted different aspects of Canada’s housing crisis.
Together, we reached the same conclusion: the fastest and most cost-effective way to create affordable housing is often not to build something new. It is to rescue projects that have already been approved, serviced and substantially de-risked.
That work is no longer theoretical. CHAP is now being applied through pilot projects with municipal and non-profit partners to demonstrate how stalled developments can be restructured into affordable and attainable rental housing while protecting taxpayers. CHAP succeeds because it preserves market discipline while creating public value.
With CHAP, developers are not guaranteed profits. Governments do not purchase units at inflated prices. Instead, lenders, municipalities, non-profit housing providers, institutional investors and governments work together to restructure distressed projects.
The market still works. Land values adjust to today’s reality. Lenders negotiate losses where necessary. Equity investors absorb appropriate risk. Public investment creates public benefit rather than private windfalls.
The result is a better outcome for taxpayers, municipalities, lenders, construction workers and, most importantly, families waiting for homes.
Municipalities finally realize the value of infrastructure and planning investments they have already made. Construction resumes instead of leaving fenced excavation sites and unfinished buildings sitting idle for years. In the process, projects are redesigned for affordable rental housing using lean construction, modular building techniques and smarter, more sustainable building systems that reduce costs, improve productivity and deliver higher-quality homes.
Workers remain employed. Lenders recover more value than liquidation would produce. And most importantly, families move into homes years sooner than if governments were forced to begin entirely new projects from scratch.
Every stalled development represents years of planning, engineering, environmental review, community consultation and public investment that have already occurred. Allowing those approvals to expire wastes scarce public resources while doing nothing to solve the housing shortage.
CHAP recognizes those approvals as public assets that should be put to work. It also recognizes an economic reality too often ignored in housing policy.
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Condominium projects and affordable rental housing operate under entirely different financial models. Simply adding grants or subsidies rarely makes an ownership project as viable as affordable rental. The land value, financing, ownership structure and long-term operating model must all be restructured.
That is where many existing housing programs fall short. They attempt to subsidize projects without fundamentally changing the economics.
CHAP begins by fixing the economics. By placing long-term ownership with experienced non-profit housing organizations, affordability is protected for decades rather than for a few years. Public investment is leveraged alongside private and institutional capital, multiplying the impact of every taxpayer dollar while creating lasting community assets.
Canada faces a choice. We can spend billions attempting to preserve yesterday’s condominium market. Or we can transform today’s stranded developments into tomorrow’s affordable communities.
One approach rescues balance sheets. The other rescues neighbourhoods.
Housing policy should reward successful delivery, not failed speculation. CHAP offers a practical alternative that protects taxpayers, restores market discipline, accelerates housing construction and creates permanently affordable homes.
It rescues communities without bailing out failure. That is responsible public policy.