Taking Back Housing Stability: Why Public Acquisition and Takeover of Stalled Developments is a Game-Changer
Housing affordability in Metro Vancouver and across BC is one of the most urgent crises of our time. The high cost of rent and the scarcity of affordable options push many middle-class families to the brink, often forcing them to choose between paying rent and other essentials. Traditional affordable housing plans—while helpful—have limitations when it comes to stalled or bankrupt developments, which now represent a significant barrier to increasing housing supply.
Our proposal offers a unique and powerful solution: the government steps in to acquire stalled or bankrupt housing projects, completes construction with cost-effective “austere” finishes, and operates these buildings as subsidized rental housing where rent is pegged directly to tenants’ incomes, not volatile market prices. Here’s why this matters—and why it’s different from other housing strategies.
The Unique Strengths of Our Proposal
1. Acquisition and Public Ownership of Stalled Projects
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Stops the bleeding: Instead of letting stalled developments rot, become eyesores, or be sold off piecemeal, the government takes full control.
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No inflated restart costs: Private developers restarting stalled projects often face higher construction costs due to delays, changing codes, and financing premiums. Our public takeover removes those profit-driven layers and risk premiums.
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Preserves affordable housing potential: By acquiring at current land and debt values, the government controls project costs and keeps pricing predictable.
2. Income-Linked Rent Policy — Stability for Middle-Class Families
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Rents are set at a flat 30% of gross income, unlike typical programs tied to market rates or CMHC benchmarks.
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This guarantees predictable and fair housing costs for tenants, shielding them from rent spikes linked to market inflation or speculation.
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It especially helps the “missing middle” — those who earn too much for social housing but struggle with market rents.
3. Austere But Durable Construction
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Focuses on functional, durable finishes that minimize upfront and ongoing costs without sacrificing quality or safety.
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Enables maximizing the number of units within fixed budgets, increasing supply efficiently.
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Simplifies future maintenance and lowers replacement costs.
4. Centralized Asset Control and Long-Term Planning
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Government ownership of both land and building means permanent affordable housing stock.
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The city/province can decide how to allocate units based on changing community needs—whether middle-class rentals, seniors’ housing, or supportive units.
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Rental income can be reinvested to maintain and upgrade buildings, ensuring sustainability.
5. Mitigating Construction and Financial Risks
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Public ownership brings access to lower-cost financing and longer amortization periods unavailable to many private or non-profit developers.
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Direct project management allows better control of construction timelines, reducing costly delays and overruns.
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Avoids the pitfalls of private bankruptcies, stalled construction sites, and abandoned developments.
6. Social and Neighborhood Benefits
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Revitalizes blighted sites, improving safety, aesthetics, and local economies.
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Maintains stable occupancy, preventing the negative impacts of empty or half-built properties.
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Helps retain middle-class families in their communities, reducing displacement and social strain.
7. Flexibility for Future Use and Adaptation
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Buildings can be designed or retrofitted for evolving needs, such as family housing, seniors’ units, co-op housing, or emergency shelters.
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Long-term asset management allows for adaptive reuse, responding to future demographic or policy shifts.
8. Streamlined Management and Reduced Overhead
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Centralized management of multiple projects simplifies tenant services, maintenance, and compliance.
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Reduces administrative complexity compared to a patchwork of private owners, non-profits, or co-ops.
Problems Our Proposal Addresses Better Than Other Housing Plans
| Problem Area | How Our Proposal Solves It |
|---|---|
| Stalled construction sites remain undeveloped, wasting valuable land | Government acquisition prevents abandonment and costly restarts, turning projects into finished homes. |
| Rising market rents force displacement | Income-linked rent at 30% of gross income stabilizes housing costs, protecting middle-income families. |
| Private developers face financial and regulatory hurdles causing delays | Public ownership uses better financing and management to reduce risk and keep projects on track. |
| Affordable housing often depends on subsidies tied to volatile market rents | Decoupling rent from market rates ensures consistent, predictable affordability long-term. |
| Neighborhoods suffer from blighted, unfinished developments | Revitalizing stalled sites restores community vitality and encourages investment. |
| Fragmented ownership leads to inconsistent maintenance and tenant experience | Centralized ownership enables uniform standards and efficient management. |
| Limited long-term housing stock in public hands | Our approach creates permanent affordable rental assets, not temporary subsidy programs. |
Local Sample Scenario: 1045 Haro Street & Thurlow Development
Consider the stalled high-rise project at 1045 Haro Street and 830–850 Thurlow Street in Vancouver’s West End—a 55-storey tower with 516 planned residential units, currently in receivership with a debt of approximately $82 million and assessed land value near $98 million.
Our proposal:
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The city acquires the site outright for around $90–100 million, settling outstanding debts.
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Completes construction using austere, durable finishes for approximately $350–400 million, keeping costs controlled.
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Operates the completed building as fully publicly owned subsidized housing, setting rents at 30% of tenants’ gross incomes.
Outcomes:
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The city gains control over a large-scale housing asset permanently dedicated to affordability.
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Provides over 500 units of middle-income housing in a central location.
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Stabilizes rents against market volatility, protecting tenants from displacement.
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Revitalizes a critical urban site, improving the neighborhood and local economy.
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Avoids the costly, inflation-driven restart process private developers would face.
Why This Matters for Policymakers and Communities
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It’s a long-term, sustainable investment in housing stock that benefits generations.
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Offers predictable budgeting since rent revenues are tied to income, reducing volatility.
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Creates a reliable tool for dampening overall rental market pressures.
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Demonstrates proactive leadership by turning stalled projects from liabilities into community assets.
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Enables flexible housing policies adapted to changing social needs.
Call to Action
Housing crises require bold solutions. Policymakers and city leaders must consider strategies that:
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Stop allowing stalled projects to drag down communities.
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Use public resources wisely by acquiring and completing these developments.
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Ensure housing affordability for the often-overlooked middle class.
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Build a durable, flexible housing stock that supports community stability.
If you’re a policymaker, advocate, or concerned resident, support efforts to implement public acquisition and operation of stalled housing projects. Together, we can reclaim housing stability and build more equitable cities.
Addressing Common Criticisms and Why This Proposal Still Stands Out
While acquiring and completing stalled housing projects as publicly owned, income-based subsidized housing has many advantages, it’s important to acknowledge some common criticisms and understand why this approach remains the best long-term strategy.
1. Higher Upfront Costs and Capital Intensity
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Criticism: Requires large upfront investments—often hundreds of millions—making it seem risky or inefficient compared to subsidy programs or private sector leverage.
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Response: This is a capital investment in a permanent public asset that will generate long-term social and financial returns, unlike subsidies which are ongoing expenses without asset creation.
2. Slower Delivery of Units
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Criticism: Delivering fewer units more slowly compared to programs that fund many smaller projects simultaneously.
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Response: While speed matters, permanence and stability of affordable housing are more critical for long-term community well-being.
3. Management and Operational Complexity
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Criticism: Large-scale public housing management requires ongoing capacity and funding, and governments may face challenges in consistent upkeep.
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Response: Centralized ownership reduces fragmented management, enabling more consistent standards and tenant services than scattered subsidy programs.
4. Political Risk and Public Perception
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Criticism: Large capital projects can trigger political backlash or be portrayed as wasteful government spending.
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Response: Transparent communication emphasizing asset creation, middle-class affordability, and neighborhood revitalization can build strong public support.
5. Opportunity Cost of Capital
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Criticism: Tying up large amounts of capital in real estate reduces government flexibility to respond to emerging needs or invest elsewhere.
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Response: The asset portfolio itself can be leveraged, refinanced, or partially redeployed over time, providing long-term financial flexibility.
6. Risk of Market Fluctuations and Asset Depreciation
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Criticism: Real estate markets can be volatile, and poorly managed assets risk depreciation or become burdensome.
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Response: Careful site selection, modern building standards, and strong governance minimize risks and ensure assets remain valuable community resources.
Why This Proposal Remains the Best Long-Term Solution
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It creates permanent housing assets rather than temporary aid.
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It directly controls affordability by owning and managing the buildings.
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It revitalizes stalled developments that otherwise become community liabilities.
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It helps dampen rental market volatility through stable, income-linked rents.
In short: While other housing strategies offer certain short-term benefits, only this proposal ensures lasting housing affordability, community stability, and asset building for future generations.
Subject: Proposal: Government Acquisition/Takeover of Failed Housing Projects to Provide Middle-Income Social Housing in Burnaby
Dear Mayor [Last Name],
I would like to respectfully offer a housing proposal for your consideration that may help address both stalled developments and the housing pressures on Burnaby’s middle-income residents.
When private housing projects fail, as we’ve seen in the Siena project and others, the result is often years of costly litigation, abandoned sites, and little to no recovery for the original stakeholders. This creates not only financial loss but also social and visual harm to the surrounding communities.
My proposal suggests that the City of Burnaby (or a related housing authority) could directly take over such failed projects—either by acquiring them at reduced value or by accepting ownership from stakeholders ready to walk away. These projects could then be rapidly completed as durable, affordable homes targeting middle-income families and workers.
Key features:
Rent tied to income to keep units affordable as tenant incomes rise, with voluntary overpayment helping to fund the project over time.
Minimal government subsidy needed compared to traditional affordable housing.
Debt-for-density swap option to allow private developers to take on failed project debt in exchange for density bonuses on other sites.
Spartan, durable units that are not directly competitive with luxury or commercial developments.
A potential path to financial sustainability or surplus over time.
This approach differs from typical affordable housing models by focusing on middle-income tenants, creating stable communities without displacing existing residents or concentrating disadvantage.
The enclosed appendix, developed with the support of research and analysis provided by ChatGPT, an AI language model created by OpenAI, offers a detailed breakdown of the concept, potential risks, financial strategies, and anticipated challenges. I take full responsibility for assembling this proposal, but the research, structural analysis, and key comparisons are drawn from ChatGPT’s assessments.
I leave it to your office to assess whether this proposal may be of interest to other members of Council or relevant city departments.
I understand you may already receive many proposals, but I hope this one offers a unique and practical pathway for Burnaby’s housing strategy. I am not seeking further contact unless you wish to explore the idea.
Thank you very much for your time and your ongoing leadership.
Warm regards,
[Your Full Name]
[Optional: Contact Info]
Appendix: Detailed Proposal for Government Acquisition/Takeover of Failed Housing Projects Targeting Middle-Income Social Housing in Burnaby
1. Background and Rationale: The Problem With Failed Housing Projects
Typical Outcomes of Failed Private Developments
When private housing projects collapse (due to bankruptcy, financing gaps, or market shifts), the aftermath is typically:
Years of costly legal proceedings between developers, investors, creditors, and presale buyers.
Minimal recovery for stakeholders after legal fees and debt restructuring.
Abandoned construction sites that depress nearby property values and community confidence.
Example:
The Siena project in Burnaby (2023) is a recent case where buyers were left in limbo, and the project's future remains uncertain. Without intervention, these sites can stay inactive for years, becoming safety hazards and visual blights.
The Missed Opportunity
Instead of extended legal and financial gridlock, government intervention can:
Take over the project quickly.
Complete construction in a cost-effective, socially beneficial way.
Provide affordable housing in a tight market.
Stakeholder Incentives
For investors and presale buyers:
Walking away now may recover more in the long run.
Government takeover can offer:
Partial financial recovery through a shared-profit structure.
Public recognition for contributing to an innovative social project.
Compared to likely zero recovery after drawn-out litigation, this is a pragmatic, potentially reputation-enhancing exit.
2. Proposal Outline: Government Acquisition/Takeover and Middle-Income Social Housing
Acquisition Pathways
The government can:
Purchase the land and incomplete structure at reduced post-failure market value.
Accept a full ownership transfer from stakeholders who prefer to write off their losses.
Offer debt-for-density swaps:
Example: Developer B takes over Developer A's failed debt (e.g., $50M) in exchange for enhanced density or other incentives on a nearby project. This enables a smoother restart without direct government cash outlay.
Key Project Features
Maximized Density:
The government can pursue higher-density designs where zoning allows, making the most of the site’s potential.Spartan, Durable Units:
Interiors focus on durability, not luxury.
Finishes prioritize easy maintenance and long-term cost savings.
Optional use of repurposed hotel furniture for affordable, furnished rentals—helping new residents (especially out-of-town workers) settle quickly.
Integrated Daycare (Optional):
A free daycare for residents, helping working families.
Can be located in contiguous vacant suites to scale flexibly or be phased out if demand falls.
Income-Pegged Rent Model
Affordable Rent Tied to Income:
Rent is fixed to a percentage of household income, ensuring affordability while allowing natural rent increases as income grows.Voluntary Overpayment:
Tenants with rising incomes may eventually pay above market rent. If they choose to stay, this overpayment directly helps fund the project.Cumulative Savings Tracking:
Monthly rent statements will include:Current market rent
Actual tenant rent
Running total of "subsidy received" (cumulative savings)
Example Statement:
- Market Rent: $2,000/month Your Rent: $1,200/month Monthly Savings: $800 Cumulative Savings to Date: $9,600
This encourages tenants to stay as long as they need, while providing a subtle, self-managed incentive to eventually transition to market housing.
3. Eligibility Criteria and Tenant Selection
Tenant Profile
Middle-income households:
Estimated income thresholds: $60,000–$100,000 annual household income.Singles, couples, small families matched to unit sizes (studios, 1-2 bedrooms).
Priority to local workers and residents.
No wealth or asset testing (simplifies administration and encourages uptake).
Income Monitoring
Annual or biennial income checks.
Rents automatically adjust with income growth.
Tenants can stay even if their incomes exceed eligibility, but they will contribute more to project costs.
4. Financial Sustainability and Cost Recovery
Revenue Streams
Income-pegged rent from all tenants.
Overpayment from tenants who exceed the income threshold but choose to stay.
Optional rental of daycare spaces to non-residents if demand exceeds internal needs.
Cost Reductions
Government borrowing at low (possibly Bank of Canada) interest rates.
Lower construction costs by:
Reusing existing infrastructure.
Spartan interior design.
Potential for donated or low-cost furniture.
Debt-for-Density Swap Mechanism
Developers can acquire density bonuses or other planning concessions by absorbing the debt of the failed project.
This reduces upfront government spending and can create mutually beneficial public-private outcomes.
Break-even Timeline (Estimated)
Conservative Estimate: 15–20 years to break even, depending on:
Final construction costs
Average tenant income levels
Tenant turnover rates
This compares favorably to traditional affordable housing, which often requires perpetual subsidies and rarely moves toward financial self-sufficiency.
5. Market Impact and Social Outcomes
Market Impact Comparison: Government Takeover vs. Private Restart
Private Restarts:
Often shift projects toward luxury units to recover losses.
Frequently lead to higher prices per square foot, fewer affordable units, and neighborhood price inflation.
Government Takeover:
Maintains affordable, durable units.
Provides immediate supply in a housing-constrained market.
Avoids contributing to local rent inflation.
Social Stability Benefits
Middle-income tenants with stable jobs:
Lower social service demands.
Reduced policing and emergency housing needs.
Increased community cohesion and safety.
No Concentration of High-Needs Tenants:
This prevents creation of social housing “pockets” that can sometimes stigmatize or destabilize neighborhoods.
6. Operational Considerations
Day-to-Day Management
Government or existing municipal housing agencies will:
Manage tenant selection.
Administer income checks and rent adjustments.
Maintain building operations.
Community Engagement
Exteriors will be visibly presentable and well-maintained to integrate with the surrounding neighborhood.
Interiors will remain spartan but functional to control costs and subtly encourage natural turnover as tenants’ incomes rise.
7. Risk and Challenge Mitigation
Government Restart Failure Risk
Mitigated by:
Reusing existing work.
Simplified, durable design.
Lower financial exposure due to discounted acquisition and low-interest borrowing.
Market Pushback
Developers may initially resist due to fear of downward pricing pressure.
Can be addressed by:
Emphasizing that these units target middle-income tenants who cannot currently access market housing.
Highlighting that spartan, low-cost units are not in direct competition with market or luxury developments.
Pointing to stabilized communities as a long-term value-add for surrounding property values.
Legal and Financial Complexity
Reduced by:
Accepting ownership transfer from failed projects as assets with little or no remaining market value.
Offering debt-for-density trades as a faster, lower-bureaucracy pathway.
8. Impact on Municipal Budgets and Taxes
Property Tax Implications
Government-owned buildings typically pay reduced or no property taxes.
However, this is standard for all social housing projects and not unique to this proposal.
Broader Economic Impact
Stable tenants increase local consumer spending, supporting municipal revenue streams indirectly.
Economic multiplier effects may offset small reductions in property tax revenue.
Grant Opportunities
Provincial and federal housing programs may offer grants to support this initiative, especially if aligned with social housing targets or rapid supply boosts.
9. Exit Strategies and Long-Term Sustainability
Voluntary Tenant Transitions
Cumulative savings statements and pegged rent percentages encourage natural turnover without forced evictions.
Building Sale or Partnership
Government may eventually sell the building to:
A public-sector housing authority.
A REIT or non-profit operator, with rent protections maintained via covenants.
Reinvestment of Surpluses
Surplus revenues from overpaying tenants can be earmarked for:
Future takeovers of failed projects.
New middle-income housing pilots.
Local housing support programs.
This creates the potential for a self-sustaining fund that gradually expands affordable housing capacity without major new expenditures.
10. Final Summary
This proposal:
Offers a practical, one-off pilot to quickly convert failed developments into stable, affordable housing.
Targets middle-income tenants who are currently under-served by both social housing and the private market.
Avoids long-term dependence on subsidies by introducing income-pegged rents and voluntary overpayments.
Provides a fiscally responsible alternative to both market restarts (which push prices higher) and perpetual low-income subsidies.
Stabilizes communities without displacing existing residents or triggering harmful gentrification patterns.
Offers a quick, low-bureaucracy acquisition path with potential stakeholder buy-in.
My personal notes:
Like the micro-farms Food Security pilot proposal, this is an attempt to tackle several problems with a single proposal. The idea for this proposal began when I asked ChatGPT to tell me about Vienna's Social Housing where apparently an astounding 60% of the population lives in subsidized housing, including 220,000 owned by the municipal government. Yet they feel no stigma at all because middle-class inclusion with generous eligibility criteria is a core feature that contributes to this outcome.
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