A newly designated provincial flood zone in Quebec has sparked concerns and anger across the real estate industry.

The Quebec Professional Association of Real Estate Brokers (QPAREB) says the new zone affects 77,000 properties potentially impacting property values, complicating insurance coverage and destabilizing the market.

“We applaud the government for seeking to implement long-term solutions to counter the very real impacts of climate change,” says Nathalie Begin, president of QPAREB’s Brokerage Practices Committee. 

“However, it is crucial that mitigation and supportive measures be developed to support homeowners affected by the new mapping and to preserve property market stability. The government can continue to count on our complete cooperation in this regard.”

Frustration and anger among Quebecers 

Begin notes the expansion of the map is causing frustration. “A lot of people in the province are pissed off because we had a map before but they’ve added a lot more properties on the new map,” she explains

“Most of the people now in the flood zone it’s their only asset in life,” she said. “A lot of people have been living (in their homes) for a long time. For now, the problem is, because the map is already out, all the insurance companies, (and) the lenders will decide if they want to put some insurance or accept a mortgage on a house, they are looking at this map.

According to Begin, the lack of clarity from lenders and insurers has stalled some transactions. “We don’t have any news about what the lenders are going to do, what the insurers are going to do and we don’t have any programs by the government that’s going to help those people.”

In Sainte-Marthe-sur-le-Lac, Begin notes “almost all the properties are now in the flood zone. People over there are crying because they don’t know what they’re going to do.”

QPAREB’s recommendations

QPAREB has submitted a brief to the public consultation on modernizing the province’s regulatory framework for water environments and flood-prone areas. 

The brief indicates that the new flood zone now covers 55,000 more properties than previously.  

The association is recommending the government implement mitigation measures to relieve the already shaky real estate market and help Quebec homeowners affected by the regulatory framework.  

“This loss of property value will clearly have an impact on the tax revenues of municipalities, which are already facing serious financial difficulties. This is a major issue, since the estimated total value of properties in flood-prone areas under the new mapping is around $18.4 billion,” according to QPAREB.

 “Moreover, owners of homes in the zones newly identified as flood-prone could have serious difficulty should they wish to sell their property. The perception that a flood risk exists, even if this is considered a low-recurrence possibility, can be enough to dissuade potential buyers.”

Recommendations and measures proposed by QPAREB include:

• The Quebec government should establish financial assistance programs to support affected homeowners.
• Financial institutions and insurers should publicly disclose their policies regarding properties in flood-prone zones.
• The government should implement a “resilience certification” program, as suggested by Professor Michel Leclerc of the Institut national de la recherche scientifique, to recognize properties that have been retrofitted for flood protection.
• A public awareness campaign is needed to clearly communicate the impacts of the new regulations to affected residents.

National perspective on climate resiliency and property values

Pierre Leduc, spokesperson for the Canadian Real Estate Association (CREA), shared that CREA is gathering data to evaluate the impact of labelling properties in high-risk zones. “CREA fully recognizes that extreme weather events are happening around the country that are having a direct impact on housing and continues to support efforts to address climate resiliency of Canadian homes,” he wrote in an email statement.

Leduc says CREA collaborated with Natural Resources Canada on “A Homeowner’s Guide to Energy Efficiency,” which aims to inform buyers and sellers about energy-efficient upgrades to make homes more resilient.

“Moreover, CREA is in the process of developing a ‘green’ designation for Realtors which will allow Realtors to better assist their clients (in recognizing) home improvements that make their homes resilient to extreme weather events and more energy efficient.”

In an email, Canada Mortgage and Housing Corporation said it “undertakes and supports research that deepens our understanding of challenges such as extreme weather events and adapting to climate-related risks in the future.”

In an email, Canada Mortgage and Housing Corporation (CMHC) stated it supports research on challenges such as extreme weather and climate adaptation.

 A CMHC study, conducted with the Intact Centre for Climate Adaptation and the University of Waterloo, explored the impacts of catastrophic flooding in Canadian cities including Grand Forks, Burlington, Toronto, Ottawa, and Gatineau. Findings showed that catastrophic flooding led to:

• An 8.2 per cent reduction in the final selling price of homes,
• A 19.8 per cent increase in time on market,
• A 44.3 per cent reduction in the number of houses listed for sale.

Challenges with real estate data on flooding 

Alan Tennant, CEO of the Calgary Real Estate Board, cited the lack of current, credible data as a major hurdle, and noted the flood that devastated Calgary in 2013. 

“We’ve had a huge desire to have maps of that nature and frankly crime statistics and traffic volumes. Those kinds of things are important bits of data that our members are thirsty for because their clients want them.,” Tennant explains. “But it’s getting that credible source that keeps them current and a lot of government agencies aren’t equipped to do that,”

Tennant said a common question is what impact the big flood has had on real estate in the city but there really isn’t any great data on that.

“Most of the time it’s sort of anecdotal,” he said.