Ward 5 Councillor George Chahal wants the city to weigh in on the debate over the so-called mortgage stress test.
The new rules introduced by the federal government last year force Canadians to prove that they could handle mortgage payments two percentage points higher than current levels.
Chahal said the rules were brought in nation-wide to address regional problems in Toronto and Vancouver, which have had rapidly-rising housing values for several years.
“This was a made for Toronto and Vancouver policy with their overheated housing markets,” he said. “We have different regional economies, much like Toronto and Sudbury would.”
He said Calgary’s housing market is very different with both rising rents and sliding home prices. But he’s worried that citizens who would otherwise qualify for a mortgage under the previous rules are being kept out of the market.
He’s also worried about the overall economic impact.
“The construction industry is the second largest industry in Calgary. We’ve already seen a number of job losses and layoffs and more to come – due to the slowing residential construction sector.”
He said it’s keeping working class Calgarians from putting food on the table, and it’s possibly driving people to shop for homes in Calgary’s bedroom communities, such as Airdrie and Okotoks.
Chahal’s notice of motion would have the mayor writing to the premier and the Alberta Treasury Board, and asking them to look for regional solutions to the stress test. It would also have the city bring the issue to provincial and national meetings of municipalities in hopes of gaining wider support for regional solutions.
His motion comes on the heels of opposition leader Jason Kenney telling Calgary Real Estate agents that a UCP government would push for similar regional rules.
“If you elect a United Conservative government, we are going to go to bat for (those) … who are being pushed away from home ownership because of the prejudicial, regional, unfair stress test imposed by the Canada Mortgage and Housing Corp.,” Kenney said Wednesday.
Chahal isn’t worried about the removal of the stress test leading to more mortgage insolvencies down the road.
“We already have stringent mortgage underwriting rules that are based on your income and your credit and your ability to pay,” he said. “It’s a very stringent process currently.
“And then you layer this on top – it just adds to the pain you’re seeing locally here in Calgary.”
– With files from the Canadian Press