9 replies to this topic

[martini]

http://www.timescolo...2748/story.html

End of leaky-condo aid 'devastating' to owners

'We met our commitment,' says housing minister

By Rob Shaw, with files from Lindsay Kines, Times Colonist
August 1, 2009


Joan Marr, right, with Gwen Bell at Ocean Court condominium in Sidney: "Where do you go? Where do you turn to?"

At 74, after a lifetime of paying taxes and raising five kids, Joan Marr just wanted to retire peacefully to her condo in Sidney.

But her home, like so many others in B.C. built in the 1980s and 1990s, was hit by the leaky-condo crisis, which left thousands of homeowners with hidden mould and water damage.

The only way she could afford the $80,000 in repairs, she said, was through the province's interest-free loan program.

But yesterday, before Marr and the other 14 seniors in her building could submit their joint loan application, the provincial government pulled the plug on the entire leaky-condo repair program.

The province said it would only honour applications made before yesterday to its Homeowner Protection Office Reconstruction Program.

"It's devastating," said Marr, who lives on a fixed income of $16,000 a year. "We cannot get a loan from the bank, we can't sell our condos. Where do you go? Where do you turn to? I wish somebody could tell us what we should do."

The government said the loan program had become financially unsustainable because its funding source, a $750 levy on new homes, dwindled as construction slowed during the recession.

B.C. Housing Minister Rich Coleman said the NDP created the fund in 1998 to run for 10 years and provide $250 million in loans. The program has now run 11 years and funded more than $670 million in loans for more than 16,000 people, he said.

"At this stage we feel very strongly that we've met our commitment. We felt it was time to sunset the program. Every application we have will get processed. If it qualifies, it will be funded. So nobody will be left out in the cold, so to speak."

That brought a sharp retort from former NDP premier Dave Barrett, whose report on the leaky-condo crisis helped create the loan program.

"It really is a shocking example of an irresponsible government," Barrett said.

Coleman said there's no reliable data on how many leaky condos remain in B.C. But he has scrapped the program barely a year after a report to the province suggested between 45 and 68 per cent of B.C.'s leaky condos had not yet been repaired.

The report said that of the nearly 160,000 strata-owned apartment units built during the leaky condo period -- 1982 to 1999 -- as many as 87,500 units leaked and suffered water damage, far more than the 65,000 the province had estimated.

NDP housing critic Shane Simpson called the cancellation "unconscionable."

"There are still an awful lot of buildings out there that still need work and government has simply chosen to turn their back on people."

Coleman left open the possibility of future one-time funding. "If I had something brought to me on a case-by-case basis that made some sense, we'd spend a little time looking at that."

For Marr and her fellow seniors, that may be their only way out.

"These are seniors who have paid taxes all their life and still have to face mortgages of $100,000 in their 90s," she said. "People are going to die.

"I'm afraid down the road I may have to walk away and leave my home. What else can you do?"

Marr is organizing a protest on the lawn of the legislature, Aug. 25 at 1 p.m.

rfshaw@tc.canwest.com
© Copyright © The Victoria Times Colonist

[spanky123]

So here is the dumb question.

The Province was collecting $750 per new home to pay for the program. They lend the money out and it gets paid back. So how can they run out of money? Are they saying that lots of people aren't paying back the money or are the funds simply being returned to general revenue?

[VicHockeyFan]

So here is the dumb question.

The Province was collecting $750 per new home to pay for the program. They lend the money out and it gets paid back. So how can they run out of money? Are they saying that lots of people aren't paying back the money or are the funds simply being returned to general revenue?

I think that's a good question. Also, have they indeed stopped collecting the $750 per door? Or just stopped paying out? I was never a fan of the plan at all, I thought people should just refinance in the conventional way (the way I did it). I know some people couldn't do it, and some people definitely are not in a position to do it now, but still, very, very many are able to do it now. Alas, some poele will lose their homes, just like many have here and in the US. It's not like they go homeless, they go from paying a mortgage to paying rent. If you are paying for a $200k mortgage on a leaky condo that's gonna cost $50k to fix, and the after-fix appraised value is only $250k, then you might as well leave. The 74-year old quoted in the story, in my mind, is most likely to be much better off financially to go rent for her remaining years.

In that same scenario, if your mortgage is 100k, then you can likely get a conventional second mortgage or re-fi to get the repair money.

[VicHockeyFan]

So further to all that, I tracked down some info...

They all live here, the folks in the article, and these are their assessed values with it in a known leaky state:

http://www.bcassessm...asba/index.aspx

So for the 80k fix, presumably their values go up somewhere around that. A bank will want you to have about 100k equity in the place to consider re-fi. So if this lady has less than 100k equity, then she likely would be best to sell for 140k or whatever she can get, take the minimum 40k plus she gets on the sale and rent. If she has a LOT less than 100k equity, she already has a big mortgage payment now and can afford rent.

[Holden West]

^Yes, that all makes sense. But still, they should qualify for that loan. I don't see why it should be tied to new home sales; either victims deserve a loan or they don't. It's like health insurance being tied to births! Sorry, you can't get that hip replaced because no babies were born this week!

[concorde]

Quick numbers: 80K interest only loan payments for 5 years at 6% would cost 24K. So where does the other $23,250 come from after the BC Government gets their $750 levy?

[spanky123]

Quick numbers: 80K interest only loan payments for 5 years at 6% would cost 24K. So where does the other $23,250 come from after the BC Government gets their $750 levy?

The BC Gov't loans were interest free.

[Holden West]

"At this stage we feel very strongly that we've met our commitment.

How can he say that when the originators of the programs could not possibly have foreseen the complexity of the leaky condo crisis? Buildings thought safe at the time later were found defective so ending the program "on schedule" is totally arbitrary.

[VicHockeyFan]

The BC Gov't loans were interest free.

Concorde means the govt has to borrow the money to give it out so they pay interest on it

[spanky123]

Concorde means the govt has to borrow the money to give it out so they pay interest on it

Fair enough but I am acting on the assumption, right or wrong, that the $750 per house (going back 11 years) has funded much of the program.