Updated flood plain maps will send the housing market underwater: Neil Macdonald

Note to outraged conservative readers: this opinion column was not assigned by Katie Telford. (The only world in which Prime Minister Justin Trudeau's chief of staff actually assigns journalists is the fever swamp of right-wing conspiracy theories).

No, this column was inspired by the sight of sandbags and portable toilets on the streets of a neighbourhood near the Ottawa River where I very nearly bought a house four years ago. That those negotiations fell through, in retrospect, was a bolt of luck for which I am now profoundly grateful.

I would never consider buying near the river nowadays, for obvious reasons, and my guess is the miserable residents on those sandbagged streets spend a lot of time contemplating both their home values and the next catastrophic flood. There have been two in the last three years. The Ottawa River surged past its banks weeks ago, and is still frighteningly swollen.

It never occurred to me, back in 2015, to check whether the home we tried to buy was at risk of flooding. Being near the river was a plus, not a threat. And even if I had checked, it probablywouldn't have done much good. Flood plain maps in Canada are about 25 years out of date.

But that's about to change. Next year, the federal government will begin uploading nearly 2,000 user-friendly flood plain maps, updating them with the most recent geospatial data. Eventually, entire communities will find themselves publicly identified as at-risk. What that will do to the value of their homes and their flood insurance premiums (assuming they can even get insurance), is obvious.

Drastic market devaluation

"Oh! Oh!," says Prof. Blair Feltmate, delighted to have been asked. "There is going to be a massive devaluation of the housing industry in Canada, guaranteed. A million will turn into $500,000 very rapidly."

Feltmate is head of the Intact Centre on Climate Adaptation at the University of Waterloo, one of those elite, leading-expert Cassandras so many of us just try to ignore.

Now, before the fever swampers start yelling conspiracy, this push to update flood plain maps is not coming from Liberal climate-change evangelists like Catherine McKenna, Trudeau's environment minister. Or David Suzuki. Or the Green Party. It is coming from the insurance industry. Put another way, conservatives: market forces. Feltmate's centre is largely funded by Intact Insurance, one of the industry's biggest players.

That's hardly surprising; no industry's profits are more immediately threatened by climate change than insurance. Between 1983 and 2008, says Feltmate, annual insurance payouts for catastrophic events in Canada, mostly flooding, averaged between $250 million and $450 million a year. In nine of the 10 years since 2009, the average annual payout has been $1.8 billion. The average payout for a flooded basement is $43,000 and rising.

So the industry wants two things: to push for flood-proofing, and to reassess premiums (or decide where not to insure, period). For that, it needs data. New, updated flood risk maps will give it clear justification to begin dramatically hiking premiums for some homeowners, or refusing them insurance completely. It doesn't take much imagination to guess what will happen when the new maps begin to appear.

"It will put the new areas (newly included in flood plains) into panic mode," says Feltmate.

"There will be big pushback, big alarm. Now your home is stigmatized. A home is worth exactly as much as someone is willing to write a cheque for, and who would write a big cheque for a house suddenly identified as at risk of flooding?

"You will see people begin to default on their mortgages, because they know they owe more on the home than it will ever be worth."

The shorthand term for that in the real estate market is "going underwater." Until now, that term was figurative, not literal.

Furthermore, says Feltmate, the new data will also confirm what experts have known for some time: five per cent of at-risk homes in Canada cannot be saved. Their owners will have to evacuate.

Incentives to relocate

That's already begun. The (conservative) Quebec government, citing climate change, has decided to cap flooding relief, and is now offering residents in areas at extreme risk of flooding $200,000 to move somewhere else.

The reaction, of course, was immediate. Flooded homeowners all over the province told reporters that the government offer doesn't begin to cover what they think is the value of their homes. In fact, their homes' true value, in some cases, is now probably close to zero. After the catastrophes of 2017 and 2019, who would buy a home near the water in Pointe Gatineau, across from Ottawa? Or Lac Deux Montagnes, west of Montreal? Or parts of London, Ontario, or Calgary?

Feltmate says governments may eventually have to force high-risk residents to leave: Here's some money, we're shutting off your utilities.

And, he says, it's not a matter of whether there will be more flooding.

"What we have seen so far is nothing compared to what is coming. It is simply fact that the atmosphere is warming, and warmer air carries more moisture. This is the new normal."

The changes that have taken place so far, says Feltmate and this is on public record, most recently affirmed in the alarming report by federal scientists released last month are irreversible. And it is going to get worse, faster, and soon.

Home inspectors, most of them until now minimally trained in basement flood assessment, are taking courses that will no doubt become mandatory. Colleges are actually putting the courses online. Mortgage providers will almost certainly begin demanding such assessments as a condition of approval. Canada Mortgage and Housing Corporation, which insures mortgages, will likely start insisting on it.

If there is any good news here, it is that communities and homeowners can take steps to drastically reduce flood risk. It will be possible to effectively remediate yourself off those flood plain maps, and protect the value of your home. But it will cost money.

Feltmate's Intact Centre lists steps anyone can take to keep the basement dry during anything short of Noah's flood. Installing two sump pumps with battery backup that will keep working when the power goes out. Waterproofing windows at ground level. Ensuring downspouts empty a good distance from your foundation. Installing backflow valves. Clearing eavestroughs and drains. Even digging up and replacing the grading around your house.

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And, says Feltmate, people with homes on higher ground shouldn't feel smug. "Waterbomb" storms, now happening far more frequently, can (and will) turn an entire city into a flood plain instantly. At-risk communities can install concrete barriers, berms, diversion channels, underground cisterns, and improve natural swales wetlands and marshes that act as natural drains.

And governments must start forbidding new home construction on flood plains. Unbelievably, most provinces Ontario is the only one that asserts provincial control leave that decision to municipalities, some of which, idiotically, still allow it, under pressure from developers and craving new property tax revenue.

The plain reality is that flood-proofing Canada will be staggeringly, historically costly. But the cost of not flood-proofing Canada will be incalculable.

It absolutely has to be done, and it has to be done now. The only question is, who's going to pay for it?

That's a political question. And it's not a subject Katie Telford, or anybody in any party trying to win this fall's election, probably wants to talk about right now. There's a reason those maps weren't updated for a quarter century.

More on that next week.