Not making friends

My latest column from last Friday's paper. Not going to endear me to some people, but I felt strongly about this and given the letters the paper received before and since, I think many others agree.

Bailout for least in need

Paul J. Henderson, The Times

Published: Friday, October 23, 2009

What a horror to have one's home destroyed—or at least rendered valueless—all because of an unlucky geotechnical gamble.

What happened to the homeowners in the Panorama subdivision in the Eastern Hillsides has been developing for years and has ended with an agreement with the City of Chilliwack to purchase the 42 homes for 80 per cent of what they are worth.

Early on a few owners saw mysterious damage that, while not catastrophic, triggered deeper geotechnical study that found the whole are to be on a 4,000-year-old landslide. The homes may not be unlivable, but they are unsellable. What a nightmare.

But just as a thought experiment—as many letter writers to the Times have already done—I'm going to play devil's advocate here. I do not mean in any way to be cold here, but let's be honest: for the most part, we are talking mansions. Maybe these houses aren't all mansions, but they are all very nice homes with views most of us only dream about. On these four streets sit some of the most exclusive homes in Chilliwack.

The crux of the matter, and something that some Times readers have suggested, is that when upper-middle class homeowners lose a portion of the value of their home, it's a little hard to find too much sympathy from down here on the valley floor.

Personally, my sympathy is reserved for those initial owners in the area who actually did see damage and who began this whole process. While those owners are under a gag order, we do know they fought the issue in court at their own expense and they likely received a lot less than 80 per cent of the value of their homes.

The rest of the owners will get that 80 per cent and, not inconsequentially, won't have any real estate fees to pay when they sell.

When it comes to our homes, whether we buy a pre-owned home, brand new, or build ourselves, we are making an investment, i.e. taking a risk. Most of us get a mortgage and while what we are purchasing is a place to live, we are at least in part, taking a chance that while we make mortgage payments for 10 or 20 or 30 years on this building, the value will increase.
For the more wealthy, some own one home where they live and then purchase one or two or more homes elsewhere as investments. The risk is clear.

For those who decide to build a dream home in a remote or geotechnically complicated location, the risk-benefit ratio is also there. Living next to a lake, on a river or on a hillside overlooking anything is very desirable. Homes like this cost more to build, but the return is great as the rest of us that can never afford these elite locations are jealous. And jealousy increases property values.

Generally the gamble, which all investment is, pays off. So when the wealthy roll the dice and build homes on a hillside that, it turns out, is slowly sliding to the valley floor just how sympathetic should we be?

Loss is loss, but most of these homes are still totally livable. Most of them will take a 20 per cent hit and move off the hill. And the taxpayers of the City of Chilliwack will foot the bill for developers who built on a landslide that moves mere centimetres a year.

Those who unwittingly bought or built unique and sought-after homes got really unlucky in this situation. But they'll be fine, take a financial hit, and then the rest of us are left to pay for their investment and lifestyle risk.

Panorama really is a no-win situation.