One quick look at the photo released by Toronto Police Service, and there could be no mistaking what was happening. Four people dressed in dark clothing carrying what could only be red plastic gas cans slinking along the side of a newly built home in an upscale neighbourhood of Toronto. Fast-forward a few hours, and the house is up in flames causing extensive damage.
Another video shows a person dressed in black, gas can in hand running down the street of a suburb under construction in the dead of night as a house erupts in flames in the background. And there are more, a lot more.
The recent arson incident at 27 Dempsey Cres., which left a luxury home under construction in North York heavily damaged, has become the focal point of an arson investigation by the Toronto Police Service.
But it is the broader trend that has some wondering if the current economic conditions, including high mortgage rates, have anything to do with the arsons.
The suspects, arriving at the scene in a dark-coloured Mercedes sedan, set the North York luxury home ablaze in the early morning hours of a December day before fleeing the area. The $14 million mansion had a large underground six-car parking garage, nanny suite, exercise room and home cinema. It was located in the Bayview Avenue and York Mills Road area.
Another incident in Burlington is being called “suspicious” by local police. A destructive fire destroyed three under-construction homes in the area causing damage to two others in the process.
In addition, Peel Regional Police revealed that another blaze at the same address on Dec. 2 has also been classified as suspicious, prompting intensified scrutiny. The fires seem to have also caught the collective eye of the insurance industry.
A release from Northridge Insurance, titled “Suspicious Fire Alert For Home Builders,” states there’s a “quick and noticeable increase in suspicious fires affecting home builders, which may be exacerbated by current financial and property market conditions.”
But Anne Marie Thomas, of the Insurance Bureau of Canada, said that the spate of new home fires hasn’t resulted in the industry as a whole studying and responding to the issue — not yet anyway.
A spokesperson for the Building Industry and Land Development Association (BILD) explained that new homes are insured with a builder risk insurance policy.
“Those builder risk insurance policies essentially cover the home as it’s under construction, including in the event of a fire,” said Justin Sherwood, of BILD.
For those purchasing new homes from plans, Sherwood explained that, if there’s a fire, an adjudicator would come in, take a look and assess the issues. The builder would file a claim and then proceed to demolish the burnt structure, usually to the foundation.
“They would rebuild it again. And they would attempt to provide the home at the same price as the pre-construction sale price that was agreed to, and there would typically be a delay in delivering that house because you have to go back to square one and do it again,” he said. “So maybe a six- to nine-month delay.”
That period of time could result in a large swing in what the purchaser ends up paying when they take possession of the home. For instance, a home bought at the peak of the real estate market in 2021 or 2022 would have a variable rate of under three or four per cent. That same mortgage rate could now be seven per cent.
Buyers with homes under construction but nearing completion face greatly increased costs, potentially double the monthly payments. Some might not even qualify for mortgages any longer.
So what are the options?
Sherwood had no comment regarding the potential for higher insurance costs as a result of a potential spike in new home arsons. But one realtor in the Niagara Region is tracking new home fires and even made a video about the seeming increase in the number.
“It would appear that there has been an unusually high frequency of fires in new home construction projects in Ontario and other parts in Canada,” said Jon Flynn in one of his videos on YouTube.com. He is compiling a chart of the fires at new home construction sites. He also noted that many fires are occuring at suspicious hours.
“Many of them were in the early morning hours between 3 and 4 a.m.,” he explained. “But I think it’s either eight out of 12, or eight out of 13 [houses], about 60 to 65 per cent are in the midnight hours or after-midnight hours, I should say. I would say this is a very suspicious trend.”
In the wake of a disturbing surge in suspicious fires plaguing new home construction projects, there are many seeking answers.