Rising water: Quebec lender ending new mortgages in flood zones ‘just the beginning’
Global News
Desjardins Group announced it would no longer offer new mortgages for properties in "0-20 year" flood zones because of what it called the rising impact of climate change.
Nearly five years after floods raced through hundreds of Quebec communities and forced thousands from their homes, a major lender’s decision to stop issuing new mortgages in flood zones is the latest challenge for cities trying to adapt to a changing climate.
Desjardins Group announced that as of Feb. 1, it would no longer offer new mortgages for properties in “0-20 year” flood zones — where there is a five per cent chance of flooding in any given year — because of what it called the rising impact of climate change.
There are some exceptions: buyers can get financing for up to 65 per cent a home’s selling price if the previous owner had a Desjardins mortgage and the property has protective measures to prevent flooding. But the company’s decision has left mayors of low-lying towns worried that homeowners will be left with properties that no one will buy or that are massively devalued.
Philippe Gachon, general director of a flood prevention research institute called RIISQ, says Desjardins’ decision is “just the beginning” of the challenges towns and cities will face as the province prepares to release new flood maps later this year.
“There are people who will discover that they’re in a risk zone when they didn’t necessarily know it before,” he said in a phone interview.
While the flood maps will be a good thing, they’re also a sensitive topic: they will determine who can get flood insurance, and who can’t.
“There will be other areas that won’t be insurable, or at prohibitive prices that are too expensive for most people,” said Gachon, who is also a hydroclimatology professor at Université du Québec à Montreal.
In an email, Desjardins cited the lack of flood insurance, government caps on flood compensation, and the rising cost of water damage as reasons to back away from flood-zone mortgages.
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