Mayor: Missed mortgage payments will be disastrous for Vancouver

Mayor: Missed mortgage payments will be disastrous for Vancouver

Mayor: Missed mortgage payments will be disastrous for Vancouver

Vancouver might run into a significant budget deficit soon, as only 55% of homeowners said that they would be able to pay their mortgages in full this month, according to Mayor Kennedy Stewart.

Citing a recent online survey by the municipal government, Stewart said that only 68% were able to fully pay their April mortgages.

Among renters, 70% made full payments last month, while 63% would be able to complete their May rent payments.

Stewart expressed grave concern about the possible growth in property tax delinquency rates indicated by these numbers – a trend aggravated by the significant weakening of the Vancouver labour market once the COVID-19 outbreak took hold.

“The only way we can stay afloat is with the help of the federal and provincial governments,” Stewart told CTV News. “Otherwise, local governments will be forced to take drastic measures that will hurt residents and businesses and significantly slow any post-pandemic economic recovery.”

A report to Vancouver City Council estimated that the city’s funds could lose anywhere from $61 million, should the economy restart by May 31, to $189 million, if social distancing policies last until the end of the year.

Stewart’s own predictions point to a grimmer outcome, however.

“If 25% of home owners do end up defaulting on their property taxes, we could shed up to an additional $325 million in revenues,” Stewart said. “Losing more than half-a-billion dollars in operating funds in 2020 would devastate the City's financial position, forcing us to liquefy assets and exhaust every reserve fund we have – just to avoid insolvency.”