Vaughn Palmer: Liberals pile on stories of strata insurance woes
Credit to Author: Stephen Snelgrove| Date: Wed, 26 Feb 2020 01:41:20 +0000
VICTORIA — The B.C. legislature debated a crisis Tuesday that was not on the government or opposition radar until recently — the soaring cost of insurance for condominiums, townhouses and other strata properties.
The B.C. Liberals triggered the exchange by tabling measures to provide stopgap relief for homeowners overwhelmed by increases in their strata’s monthly premiums.
Some of the worst cases featured prominently in question period, as Opposition MLAs piled up the horror stories and demanded action from the government.
Surrey MLA Marvin Hunt told about a couple who just put down a $10,000 deposit on an entry level condo in an older building.
Then they learned that the building had been turned down for renewal of its insurance. With no coverage, the bank refused to underwrite a mortgage. So now they’re going to lose their deposit.
What are they supposed to do next? Hunt asked on their behalf.
Answering for the government was Finance Minister Carole James.
“We are looking at the urgency of the situation for people who live in condos. It’s a very difficult situation for those individuals,” conceded James.
“I say to the member, as I’ve been saying in the discussions I’ve been having with folks who are facing pressures, that we are taking a look at the ideas that are coming forward.”
Not good enough, returned Hunt.
“Well, that is just unbelievably cold comfort for this couple that is about to lose $10,000. How many years have they spent raising that $10,000 to be able to put it down as a down payment on the condo? And the minister is going to listen. This is wonderful. These people are losing their money. How is this minister going to fix it?”
Provoked, James switched to partisan mode.
“I find it incredible that we see the other side talking about the fact that they now care about affordability for people in British Columbia,” she returned, amid much desk thumping from the NDP side of the house.
“Where were you when the prices in British Columbia, particularly in Metro Vancouver, went up 75 per cent in five years? We got to work when we were elected government to address the issue of housing affordability.”
But as one of the B.C. Liberals heckled, “you’re the government now.” And the NDP’s work to address housing affordability could be undone in the case of strata properties by unaffordable increases in monthly levies for homeowner insurance.
North Vancouver MLA Jane Thornthwaite quoted one of her constituents: “We thought we were going to get a 40 per cent increase. Then January rolled round and we found out instead of 40 per cent, it’s actually 300 per cent. What do you do when all of a sudden you have a $150 or $200 increase to your living expenses every month?”
Liberal MLA Todd Stone, who tabled the private member’s bill with the aforementioned legislative measures, cited a recent case from his Kamloops riding: “One strata corporation has informed me that their premium has gone up by 335 per cent year over year. Their deductible for water damage has gone from $5,000 to $250,000.
“There is going to be a one-time assessment of $1,000 per strata unit owner, and their monthly strata fees are going to go up $100 per month. That’s a $3,400 total cost over a three-year period that each strata unit owner is going to have to somehow try to come up with.”
B.C. has some 30,000 strata corporations of one size or another, as the Liberals noted. So far the worst troubles are in large projects and older buildings with too much deferred maintenance.
But as the Liberals also noted, with 2,000 renewals coming up every month, many owners in many buildings have yet to experience the rate shock.
James, for her part, is consulting widely with strata associations, public housing authorities, private insurers, regulators and other governments on what is emerging as a national problem.
She even expressed a willingness to review Stone’s legislative proposal “to see if there are ideas that we can incorporate into the discussion we’re having.”
Some of his ideas were of a technical nature, proposing fuller disclosure and earlier warnings about rate spikes.
But one was aimed at addressing the impact of deferred maintenance on the soaring deductibles for water damage in older buildings.
“We’re also calling on the government to implement a strata water damage prevention program to provide financial incentives for preventative maintenance in strata buildings,” declared Stone.
James is right that the problem is sufficiently complex to resist a one-shot solution.
“There are differing opinions around what would work for stratas and ensure that they can be protected, not only in the short-term, but the long-term.”
She’s right, too, that relief may entail national action: “This is not an issue that’s unique to British Columbia. … It is happening across the country.”
Nor is every instance deserving of a government bailout. If strata councils put off needed maintenance year after year to save monthly fees, they should be paying higher premiums.
But the Liberals are right that some owners have their backs to the wall through no fault of their own and need relief now.
Partisan sniping aside, the problem caught both parties unaware.
Perhaps that provides an opening for them to work together on longer-term solutions through a legislative committee, while the province finds a way to help the hardest luck cases in the short term.