Un­in­tended con­se­quences of new mort­gage rules

The Daily Courier - - LETTERS -

Editor: As an ex­pe­ri­enced mort­gage bro­ker in the Okana­gan for 20 years, and res­i­dent of Kelowna for 52 years, I can see first hand how the new mort­gage qual­i­fi­ca­tion rules have side­lined a large pool of buy­ers who would have been en­ter­ing the mar­ket for the first time and re­al­iz­ing the ben­e­fits of home own­er­ship.

Ar­guably, one of the most im­por­tant as­pects be­ing: gain­ing equity. That part of home own­er­ship is the key to sav­ing to step up to the next pur­chase, build­ing a nest egg, and ul­ti­mately liv­ing with­out a rent or mort­gage pay­ment later in life.

I am not a bro­ker who hopes to pro­vide every sin­gle per­son with a mort­gage whether they should have one or not. I con­sider my­self a re­spon­si­ble bro­ker, help­ing peo­ple who qual­ify with the banks to get into the mar­ket then move up.

What I have wit­nessed in the past year in par­tic­u­lar, with mort­gage rule changes, is peo­ple who al­ready own and are well es­tab­lished in the mar­ket have gained enor­mous equity with the im­proved eco­nomic con­di­tions and are able to scoop up many lower-priced prop­er­ties that new home­own­ers would have qual­i­fied for last year.

They are en­joy­ing all the ben­e­fits of be­com­ing wealth­ier land­lords and own­ers and good on them.

How­ever, †those who hoped to get into the mar­ket and who would have qual­i­fied even one year ago, have felt this dream slip through their fin­gers. I had many po­ten­tial new own­ers preap­proved last year, then af­ter Novem­ber, they no longer qual­i­fied for even af­ford­able prop­er­ties in the Okana­gan.

This sud­den, jar­ring sidelin­ing of a whole pool of buy­ers, and the next into the mar­ket, has forced these now-un­qual­i­fied peo­ple to con­tinue try­ing to rent in an de­pleted rental sit­u­a­tion.

I be­lieve this is a crit­i­cal, un­fore­seen re­sult of the mort­gage-rule changes, which has led to hor­rific added pres­sure on rental ac­com­mo­da­tion and con­di­tions.

Frankly, good qual­i­fied peo­ple are miss­ing out on leav­ing that all be­hind to be­come own­ers — some­thing most peo­ple work hard and strive for.

The trickle-down ef­fect is that those least able to af­ford home own­er­ship are be­ing forced out of rental prop­er­ties by ruth­less land­lords who see an op­por­tu­nity to hike up rents and force fam­i­lies out in favour of higher-pay­ing tenants.

They’re us­ing every trick in the book to do it as well. The favourite is evict­ing them for “fam­ily” to move in, which is al­lowed in B.C. Then sim­ply hik­ing rents and find­ing higher-pay­ing tenants. (Oth­er­wise they aren’t able to hike rents be­yond the an­nual al­low­able per­cent­age).

You can’t imag­ine how many fam­i­lies are be­ing evicted with kids and pets with ab­so­lutely nowhere to go. The rental mar­ket was not pre­pared to ab­sorb this flood and land­lords have their pick of the crop when 20 peo­ple ap­ply to one prop­erty in less than 12 hours.

The Novem­ber 2016 round of mort­gage qual­i­fi­ca­tion changes is truly mak­ing the up­per mid­dle-class richer, the mid­dle and lower mid­dle­class are losing hope of liv­ing in an owned home, while stu­dents, mil­len­ni­als and poverty stricken are be­ing booted to the curb in a ter­ri­ble rental en­vi­ron­ment.

Please, I urge reg­u­la­tors and politi­cians to see this likely un­in­tended con­se­quence. I feel for peo­ple who have have lost the pos­si­bil­ity of es­cap­ing rent­ing and then all those en­dur­ing the re­sult­ing pres­sures of rent­ing in this de­pleted rental en­vi­ron­ment.

Ro­many Run­nalls, Kelowna

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