The Canada Mortgage and Housing Corp. has announced it won't insure mortgages from Northlands Trailer Park in Yellowknife, at least until there's a plan to fix its crumbling water, sewer and road infrastructure.
As a result of the CMHC's move, a prospective home buyer would have to cough up a 25 per cent cash down payment in order to get financing for a home in the trailer park — that's $50,000 on a home worth $200,000.
"Anybody that's got $50,000 kicking around probably isn't going to be buying in Northlands," Northlands resident and landlord Wade Friesen, who is also vice-president of Northlands' condominium association, told CBC News Monday.
Homeowners, real estate agents and others in Yellowknife began hearing of the housing corporation's change late last week.
Officials with the CMHC told homeowners it won't insure mortgages from Northlands because the park's decades-old sewer, water and road infrastructure needs $12 million to $18 million in major upgrades.
Those upgrades would work out to a bill of nearly $70,000 per household for each of the trailer park's 258 units.
No bailout from city
"There's a lot of people here who do need help with their properties, and they can't afford to pay any more than what they are right now," Northlands resident Ian Steeves said.
"I sure hope that, you know, the city steps in."
But Mayor Gordon Van Tighem said it is the city's responsibility only to run municipal services to the edge of Northlands. Since the trailer park is a condominium development, the infrastructure within the park is the condo association's responsibility, he said.
But while Van Tighem said the city will not bail out the trailer park, it will help the association approach the federal and territorial governments for funding.
"So what we've been looking for is programs that would provide some equity investment into it, to reduce the debt amount, to reduce the individual expense to the owners of the indivudal lots in there," he said.
Friesen and other Northlands homeowners say they hope the CMHC's move will serve as a wakeup call to everyone.
"This alone could stress the urgency of what we're facing," said Friesen.
"I mean, this is another, just one more blow that might help make people realize that this has to be dealt with immediately."