Paper No. 01 · Housing & Affordability
BC's Housing Crisis: Adopt Intelligent Policy that Lowers the Cost of New Supply
BC's condo oversupply has produced a predictable but wrong policy reflex: bail out developers and low-income residents on the backs of taxpayers through rent-to-own schemes. That's not a solution — it's a one-time transfer that leaves the underlying problem untouched. And it would land on top of an existing subsidy: CMHC's Apartment Construction Loan Program, which has already committed more than $29 billion in below-market construction financing since it launched a few years ago. A better path exists: durable rather than one-time, and one that doesn't distort the market, pick winners among developers and buyers, or hand the bill to taxpayers.
The argument that developers "got the call wrong" and should just cut prices further also doesn't hold up. Foreign ownership bans, short-term rental restrictions, and a near-halt to immigration arrived in rapid succession — each individually defensible, but collectively a demand shock no developer could have anticipated when land was bought and financing committed years earlier. Governments benefited on the way up, too: federal, provincial, and municipal levels collected the property purchase taxes, development cost charges, and construction jobs that same demand generated for years, before it became politically necessary to disown it.
An unconditional ban on foreign ownership and short-term rentals is bad economic policy in its own right. BC's tourism and economic development ambitions depend on welcoming foreigners and their capital — telling wealthy visitors and high-income business owners they must stay in a hotel because ownership and short-term rentals are banned suggests a government that either doesn't understand what foreign capital does for an economy, or doesn't want it here at all. More fundamentally, the ban has the principle backwards: when foreign capital wants into a jurisdiction and the product isn't illegal or harmful, the goal should be to harness it for residents' benefit, not chase it away. The actual problem was never that foreign buyers existed — it's that they competed for the same housing stock, at the same prices, as local buyers with local incomes. The fix is separating those pools, not eliminating one of them.
Much of the current commentary — opinion pieces, press coverage, opposition politicians — shares a common flaw: cheap, opportunistic attacks on developers and government that skip over how this happened and what the real problem now is, namely that all-in development cost renders new housing unaffordable for the average family, without offering any durable policy in its place. To many British Columbians, it may feel good to watch wealthy investors and developers take the hit — but chasing away investor capital and beating on developers is exactly what creates the next housing crisis.
Neither a developer bailout nor a buyer subsidy fixes the core problem — both are lazy policy, a quick headline that transfers wealth from one group of citizens to another instead of solving anything. The all-in cost of a new home — land, construction, and government development fees combined — exceeds what lower- and middle-income earners can service. Subsidize today's vacant inventory and you clear a backlog, but almost no new project still pencils at a price families can afford. Within a cycle or two, we're back to a shortfall.
BC is one of the most beautiful places on earth, and the last housing frenzy proved something worth remembering rather than resenting: demand from foreigners seeking condo ownership, and from investors chasing short-term rental income from tourists, is tremendous, and both are willing to pay a real premium for it. That demand didn't disappear when the restrictions came in — it just stopped paying BC anything at all. The opportunity is to contain it within firm limits and turn it into a public revenue stream that supports local affordability instead of working against it.
Here is the proposal.
Create two certificate types: a Foreign Ownership certificate and a Short-Term Rental certificate. Each is a title-registrable right, separate from any specific unit. A buyer who wants both rights simply holds both certificates — there's no need for a separate combined product, since two certificates can be registered against the same title.
Auction them subregionally — Greater Vancouver, the Fraser Valley, the Interior, and so on — administered by a third-party entity with real market-auction expertise, under the direction of the housing ministry rather than municipal councils. Bidders submit what percentage of assessed value they're willing to pay; the province sets how many certificates of each type are available, and they go to the highest bidders — clearing either at the lowest accepted bid, so every winner pays the same rate, or at each winner's own bid, with the province also able to set a bid price floor. For illustration only, a market highly desired by foreigners and short-term renters, like Greater Vancouver, might clear around 20% per certificate, while a less sought-after market in the Interior might clear closer to 6%.
Certificates are portable within their subregion: a holder applies theirs to whichever qualifying unit they choose, paying the cleared percentage of that unit's assessed value at registration. At an illustrative 20% rate, applying a certificate to a $10 million penthouse would cost $2 million; applying it to a $500,000 condo would cost $100,000. The holder picks the unit; the price scales to what they buy.
The province would adjust certificate supply subregion by subregion, releasing more where housing stock can absorb the demand and fewer where the market is tight. Each building would carry a cap on the share of units that can hold certificates — 10–20% is a reasonable starting band — with new construction allowed a higher cap, since that demand often makes a project viable, and existing buildings held to a lower cap, so standing supply stays prioritized for locals.
Certificates register permanently on title, and 100% of auction proceeds fund first-time home buyer rebates and rent-to-own programs for low-income locals.
Here's why this beats the alternatives. It doesn't ask taxpayers to fund housing, or developers to eat a loss they didn't cause. Locals will often never realistically pay the premium prices foreigners and investors will for a tower's penthouse and premium units — units whose premium pricing is often what makes the entire project pencil in the first place. Under this model, a certificate holder can apply their right to that penthouse and pay a meaningful premium at registration, and that premium flows into first-time buyer and rent-to-own funding instead of disappearing into a developer's margin.
There's also a structural advantage that inverts what happened last time. Because the right being auctioned is the certificate, not the unit, competition among foreign buyers and local short-term rental investors bids up the price of the certificate — not the price of local housing. Last time, uncapped demand competed directly for units and hurt locals. This time, that same intensity of demand gets redirected into a fund that pays locals: the more foreign and investor demand wants in, the more locals benefit, instead of the more they get squeezed out.
None of the specific numbers here should be mistaken for the point. The clearing percentages, the building caps, the split between new and existing construction — none of it is fixed, and all of it needs real modelling before it becomes law. What shouldn't be up for debate any longer is the choice between two exhausted defaults: emotionally satisfying punishment of investors, or taxpayer-funded stopgap bailouts.
This is just one component of a comprehensive set of smart policy steps needed to make new housing affordable. Other steps will be needed, which may include province-wide limits on development fees so they aren't a source of municipal revenue beyond the incremental cost each project actually causes, and expanding the housing construction labour pool through smart immigration policy. It's time to turn the page toward durable policy that actually helps address the ongoing cost of new homes.