The excerpted article was written by Thomas Rohner
Condominium owners in Iqaluit say a sharp increase in insurance costs have forced them to the brink—and if recent trends continue, they will be squeezed out of homeownership.
That, in turn, would make Iqaluit’s housing crisis, including for the under-housed, even worse, officials say.
“We were told we were lucky to get insurance at all,” said condo owner Bethany Scott.
“If we didn’t get insurance, what would happen to our mortgages?”
Tracey Oram, another Iqaluit condo owner, said her condo board is in the same boat. She said insurance companies were so scared to give her insurance that, now, her condo board can’t afford a new claim.
“We have a policy that we can’t afford and that we can’t afford to use. So we have a policy that’s no good to us,” Oram said.
Condo owners in Canada need two different kinds of insurance: a residential policy that covers the contents of their unit, and a commercial policy that covers the whole building.
It’s the commercial coverage that has seen a sharp increase across Canada in recent years.
Oram, the treasurer of her condo board, said that when she bought her condo in 2016 the commercial insurance was about $18,000 for 10 units. Her condo board has had one claim since then, Oram said. This year, after months of scrambling to find multiple companies willing to share the risk of the policy, the cost is just over $50,000. That’s an increase of 178 per cent in five years.
Condo fees have had to increase to cover the added expense, with some owners in Oram’s building paying nearly $800 per month on top of their mortgage and residential insurance.
“Our broker basically told us companies are trying to get out of the North….. I would like to feel like we’re not backed into a corner and forced to have one company and no options,” Oram said.
The Royal Bank of Canada told Nunatsiaq News that it sold its Nunavut insurance business to Aviva Canada a few years ago.
“I love my neighbours. It’s a quiet building, very respectful. And it’s nice having your own home, knowing that you’re investing in yourself,” said Oram.
Scott, also the treasurer of her condo board, told a similar story. In 2015, commercial insurance cost about $25,000 for 23 units. This year the cost is just over $60,000, Scott said. That’s an increase of 140 per cent in six years.
“It was $15,000 more than the quote we got, so we didn’t even raise our condo fees enough,” Scott said, adding her condo board has also had one claim in the last five years.
“It’s really unfortunate because developers in Iqaluit are putting up condos. We’re all being funnelled into this homeownership model, and the insurers are like, you’re too risky.”
Scott said she rents out a room from time to time, but with increased costs she’s having to charge more and more—pushing rent in Iqaluit, already among the highest in the country, even higher.
Scott said she loves her home—there’s a friendly vibe among her neighbours, who range from single-income families to retired government officials.
“Someone needs to advocate for us,” she said.
At the moment, there does not appear to be any advocacy for condo owners facing this issue on the local, territorial or national level.
Iqaluit Mayor Kenny Bell said this issue wasn’t on his radar until now.
“That’s obviously really scary, if you can’t get insurance for your home,” Bell said.
The mayor said that, since condo owners tend to be first-time home-buyers or single-income households, they play an important role on the housing continuum.
The housing continuum is widely accepted as the best approach to any community’s housing needs. The idea is that all levels of housing—from emergency to transitional and public housing to rentals and homeownership—are equally important in order to serve an entire community’s housing needs. Any negative change to one level of the continuum puts more stress on the other levels.
“Housing is a huge issue here, there’s a major lack of housing. So any time we can provide lower-cost units for people starting out, that’s really important,” Bell said.
Some professionals making $100,000 a year are couch surfing or unable to afford the increasing rents, Bell said. That puts those who are most vulnerable for housing at even greater risk, as it pushes them further outside the market, he added.