Q & A on Faculty Housing Strategy

About the Proposed 10-year Faculty Housing Strategy

Overview

What is the 10 Year Faculty Housing Strategy?

Within the larger umbrella of the long-term Housing Action Plan (HAP) targets, the 10-Year Faculty Housing Strategy was approved by the Board of Governors December 2016 as an updated implementation strategy with a special spotlight on faculty.  It introduces specifics on how and when faculty rental program enhancements and Faculty Home Ownership Program (FHOP) improvements will take effect each year over the next 10 years.

The strategy identifies specific capital projects to increase rental housing supply and format range, introduces updated faculty loan options, increases funding for faculty loan programs, and will define new access / allocation guidelines to enhance strategic faculty access to those programs.   Key elements are:

  • Increased support and appeal in the faculty rental housing program;
  • Increased Down Payment Assistance (DPA) program from $45,000 to $50,000 to mitigate inflationary pressures;
  • Replacement of the existing 2nd Mortgage Loan pilot program  with a new Prescribed Interest Rate Loans (PIRL) option;
  • Establishment of a Faculty Housing Assistance Financial Endowment (FHAFE) as a funding source for housing loan programs and associated programs;
  • Establishment of new allocation/eligibility guidelines for faculty rentals and home ownership.

By improving housing choice for faculty, this strategy aims to help UBC remain competitive in recruitment and retention of the highest calibre faculty, supporting UBC’s aspiration to be a top tier institution in the world.

Faculty Rental

How does the 10-year Faculty Housing Strategy enhance the faculty rental program?

Rental inventory enhancement over the next 10 years is as follows:

  • Accelerated inventory expansion delivering approximately 850 more units within next 10 years, and approximately 750 of them within the first 5 years, including:
    • 2017: Conversion of 42 market rental townhomes to faculty rental units
    • 2017: 36 units 6 storey low rise apartment building on Lot 3
    • 2018: 175 units Lots 27 /29 in Wesbrook Place for occupancy.
    • 2020: Approx. 300 units combined in Wesbrook Place and  University Boulevard area
    • 2021: Approx. 185 units combined in Wesbrook Place and University Boulevard area
    • 2022-2026: 100 additional units TBD
  • Continued attention to design and wider range of format/ size needs to appeal to range of faculty recruits:
  • Strategic adjustments to waitlist to formalize higher priority rental waitlist access or tenure-track and tenured faculty.
  • A further subsidized rental program (e.g. Rent-Geared-To-Income) pilot will be explored for further discussion at the next Board meeting in February, for those younger faculty with families who may still find the faculty staff rental rates challenging.
What are the proposed changes to the rental waitlist protocol for apartments?

Access to faculty-staff rental housing prior to February 2017 was administered on a first come-first served basis through a waitlist maintained by Village Gate Homes, a division of UBC Properties Trust and operator of the rental units.  The new Wait List protocol introduces more strategic use of faculty staff rental housing to support the latest recruitment and retention priorities and the implementation will start in February 2017.

Housing is less of a time-sensitive recruiting issue for staff than for faculty, given staff are predominantly hired locally and already have housing when they apply.  Faculty, in contrast, are mostly hired out of the province and/or globally without a pre-existing alternative and their housing concerns are often acute and must be resolved immediately upon arrival, particularly if relocating with families and children.

As a result, the university requested Village Gate Homes to arrange waitlist access in the following order of priority:

  • 1st priority: full-time tenured and tenure track faculty,
  • 2nd priority: staff,
  • 3rd priority: visiting professors, part-time professors, and sessionals,
  • 4th priority: employees of other on-campus agencies.

Details and exceptions to these general priority guidelines is refined further in Allocation Guidelines which was approved by the Board of Governors in February 2017.  Special case priority requests can also be evaluated by the Provost Office.

How will access to the rental townhouses be determined?

Townhomes are scarce in the rental inventory and are highly valued by faculty members in need of larger homes close to campus.  The university will request Village Gate Homes to arrange priority waitlist access to townhomes to those preselected by the university. The priority is as follows:

  • 1st priority: Tenured faculty members (Full and Associate Professors in the research stream; Senior Instructor 1s in the teaching stream), and who are deemed through the Provost’ adjudication process to be strategically important in the recruitment or retention process.
  • 2nd priority: Tenure track faculty members who do not already own housing in Metro-Vancouver (including UBC’s Vancouver campus), and who are deemed through the Provost’ adjudication process to be strategically important in the recruitment or retention process.
Any changes to the application process?
  • No. Application to the faculty staff rental programs will continue to be through the Village Gate Homes application form online.

Faculty Home Ownership Program (FHOP)

How does the 10-year Faculty Housing Strategy enhance the FHOP?

The Faculty Home Ownership Program (FHOP) is a component within the UBC Housing Action Plan that is focused on faculty ownership support.  Faculty ownership support is currently provided in the form of loan options to approved faculty for use toward the purchase price of a principal and only home in Metro Vancouver (including the Vancouver campus).

To date, loan options in the FHOP have included:

  • Down Payment Assistance (DPA) of $45,000 (forgivable) or Mortgage Interest Assistance (MIA) of $50,000 (forgivable) over 5 years, for eligible full-time  faculty within 10 years of their appointment date;
  • 2nd Mortgage Loan (3 yr Pilot program) of 33% of the purchase price of a new home on campus, up to a maximum of $330,000, repayable after 30 years with corresponding participating interest at time of resale. All full time faculty were eligible to apply, but spaces were limited and participants approved based on academic merit adjudicated by Provost selection committee.

Critical feedback on the effectiveness and lack of flexibility in the 2nd Mortgage Loan program pilot from faculty members, led to the following improvements, approved Dec 6, 2016 through the 10-Year Faculty housing Strategy:

  • Replace the 2nd Mortgage Loan pilot program, with a new merit-based 15-year Prescribed Interest Rate Loan (PIRL) option, that can support home purchase anywhere in Metro Vancouver (link to the program detail);
  • Maintain the $45,000 Down Payment Assistance for all eligible faculty already here for duration of their original eligibility period (10 years from date of their appointment)
  • Increase the value of the Down Payment Assistance from $45,000 to $50,000 for new faculty hired on or after July 1, 2017
  • terminate the Mortgage Interest Assistance program;

What is the Prescribed Interest Rate Loan (PIRL) and how does it work?

A one-time loan is to assist with the purchase of a new or resale property. Loans are averaged at $250,000 per participant up to $500,000 in rare cases, in a form that:

  • is repayable in 15 years with no principal repayments until the term expires
  • is for the purpose of supplementing the purchase of a principal residence
  • applicable anywhere in Metro Vancouver
  • faculty member pays annual interest equal to the Canada Revenue Agency (CRA) prescribed interest rate
  • limited access program: loan values to be determined solely on the basis of merit and the need to attract and retain excellent tenured and tenure-track faculty.

Who is eligible for the PIRL?

It is anticipated that up to approximately 25% of the PIRL funds may be allocated to retention cases.

All PIRL loan offers are to be reserved for:

  • tenure stream faculty with priority for tenured faculty members (Associate or Full Professors in the research stream; Senior Instructor or Professor of Teaching in the teaching stream) who do not already own housing in Metro Vancouver (including UBC’s Vancouver campus), AND
  • who are deemed through the adjudication process to be strategically important in the recruitment or retention process.
  • General principles of eligibility will be as follows:
    • Recruit Candidates: Tenure stream faculty with priority for tenured faculty may apply for loans from this fund at the time of recruitment, which is to be approved through the Provost Allocation Committee. A minimum of 75% of the PIRL funds will be allocated to recruits.
    • Retention Candidates: Existing tenure stream faculty with priority for tenured faculty recruited before December 2016, may apply for consideration through an Allocation Committee being established for this purpose in time for operationalization of the program (targeting April 2017). Up to 25% of this loan fund may be used for retention applications.
    • PIRL – Eligibility of 2nd Mortgage Loan Participants: Faculty members previously approved through the pilot 2nd Mortgage Loan program in 2014, 2015, or 2016 are eligible to convert to a $250,000 PIRL loan or 33% of the value of the home purchase, whichever is less, without going through a new application process, if they have not already bought a home (see details). Alternatively, these faculty members may also continue to purchase through the 2nd mortgage Loan program until it expires.

Details to these general priority guidelines is refined further in Allocation Guidelines which was approved by the Board of Governors in February 2017.

What’s the application process?

Application to the restricted loan program will be submitted to the University through the Housing & Relocation services unit, and that office will forward the application to a centralized academic merit review process adjudicated by the Provost Office and Deans for assessment.  Existing faculty members may apply individually, and Department Heads and Deans may also apply on behalf of new recruits.  More detailed Application procedures will be announced after April 1, 2017.

How will the applications’ merit be evaluated?

Eligibility, Allocation and Occupancy protocol guidelines were approved in February 2014 to guide the selection of candidates for restricted faculty home ownership loan programs.   These guidelines are being updated and tailored to support the new strategic updates to the PIRL and faculty rental program options. Below is the proposed evaluation process:

All requests for PIRLs or rental townhomes will be forward to the central Provost’s Allocation Committee for adjudication and approval.  This committee will, at its discretion, consider time-sensitive recruiting requests on an in-coming basis, and will forward all remaining applications that are less time-sensitive (both recruiting and retention) to a separate group, the Deans’ Allocation Committee, for review and recommendations to the Provost. Both committees will be sensitive to transparency of decision-making and rationale.

  • The Provost’s Allocation Committee, chaired by the Provost or designate, will include two or more senior members of the Provost Office.   This committee will meet as needed on a time-responsive basis.
  • The Deans’ Allocation Committee, also chaired by the Provost or designate, will be composed of Associate Deans representing every Faculty. Requests receiving majority support, defined as two-thirds or more of the committee members, will be recommended for approval.

Recruitment case requests will be evaluated on the basis of: the applicant’s Curriculum Vitae, Scholarship Statement (see below)  Teaching Dossier (if available), reference letters from the appropriate Deans and Department Heads, and any other information the applicant considers relevant.

Retention case requests will be evaluated on the basis of: the applicant’s Curriculum Vitae, Scholarship Statement (described below), Reference letters from the appropriate Dean and Department Head, and any other information deemed pertinent by the applicant.

A maximum of 25% of the loan fund on a 5 – year rolling average will be devoted to retention cases.

What is the difference between an unsecured or personal loan and a loan secured by a mortgage?

The loans (or portions of loans) that are not secured by giving the lender an interest in collateral (i.e. a car or a home) are personal loans. The borrower merely signs a loan agreement that creates the obligation to repay the loan.

A secured loan is a loan secured by an interest in property. In the home purchase market, the obligation to repay the loan is secured by an interest granted in the home itself (this interest is called a mortgage).

It is possible to use a property as security for more than one loan. With respect to the second mortgage loan offered by UBC, the borrower (the faculty member) is anticipated (but not required) to enter into a loan with a commercial lender (e.g. a bank or credit union) and grant a mortgage on the property – that mortgage is the first mortgage. The faculty member also obtains a loan from UBC and also grants UBC a mortgage. The mortgage is registered on title after the first mortgage (hence, it is the second mortgage).  Mortgages may not be discharged from title until the loan they secure is repaid.

Why is the 2nd mortgage loan program being cancelled?

The 2nd Mortgage Loan program is being terminated given the limited take-up rate.  It is being replaced with a more flexible program that is responsive to feedback and suggestions received from faculty members, Heads and Deans by allowing program participants to purchase from the more affordable resale pool on the Vancouver campus and access to more distant and affordable locations off-campus.

I am approved for a 2nd mortgage loan – What happens to my eligibility now?

Approved participants in the 2nd mortgage loan program continue to be eligible to purchase under original program terms until the end of their respective approved term (March 2017 for Cycle 1 and 2 participants and September 2017 for Cycle 3 participants) or, if they have not yet purchased a home in Metro Vancouver, they can alternatively opt to use a Prescribed Interest Rate Loan (PIRL) value $250,000 or 33% of the value of the home purchase, whichever is less, to be exercised within 5 years.

What are the changes to the Down Payment Assistance (DPA) program?
  • The DPA will be increased from $45,000 to $50,000 for all tenure stream faculty recruited with a start date on or after July 1, 2017.
  • The existing eligible faculty members or new recruits with a start date before July 1 2017 will receive $45,000 if they purchase before their 10 year eligibility is expired.

Why is the Mortgage Interest Assistance (MIA) program cancelled?

The participation rate for this program was low compared to the Down Payment Assistance Program. The University will concentrate its efforts in investing in the Down Payment Assistance Program which has proven to be more attractive to the faculty members.

When do these changes take effect if approved by the Board?

The Administration is working to implement the changes as soon as possible.

  • The increase of the rental housing is already underway with an additional 260 units (approx.) expected by the end of 2018; and a further approximately 490 units in the 3-4 years after that. Approximately 850 more units, in total, are expected within the next 10 years.
  • The Terms of Reference for the Faculty Housing Assistance Financing Endowment (FHAFE) has been approved during the Board meeting in February 2017.
  • The Down Payment Assistance Program will increase to $50,000 effective on July 1 for those whose start dates are on or after July 1, 2017.
  • The Administration will resolve the technical details of the PIRL program and work these details out with a target date for operationalizing the PIRL program by April 2017.
  • The Mortgage Interest Assistance program will be terminated effective July 1, 2017.
  • Subject to Board support of a Rent-Geared-To-Income rental program for faculty in concept, a detailed program proposal to modify the HAP Policy 5 and implementation plan will be submitted to the Board for approval at a future Board meeting in 2017.
  • The permit process and conversion of Granite Terrace and Greenwood Commons townhomes from market rental to faculty rental will begin immediately and be completed as units turn over. The full process could take up to two years.

About the Process to Develop the 10-Yr Faculty Housing Strategy

Have you consulted with faculty members on proposed changes to the FHOP? How do the ownership loan changes in this 10 –year Faculty Housing Strategy reflect the feedback received during the 2015 FHOP consultation?

Yes, an earlier version of the PIRL proposal and changes to the Down Payment Assistance program were proposed for feedback in 2015. The 2015 Consultation Report and summary can be found here.

Based on the faculty members’ feedback provided through the consultation process, the PIRL is re-designed to provide more geographical flexibility (can be used anywhere in Metro Vancouver), a longer payback term (up from 10 to 15 years) and a larger loan value ($250,000 on average).

DPA will be grand-parented for existing eligible faculty members. To mitigate inflationary pressures, the down payment assistance amount will be increased from $45,000 to $50,000 as of July 1, 2017.

Faculty members provided their rental preferences through a faculty housing demand survey that was completed in 2016.  The need for a wider range of unit sizes and format was one of the key feedback from faculty members. Click here for the full report.

About UBC’s Housing Action Plan

What is UBC’s Housing Action Plan?

UBC’s Housing Action Plan, adopted in 2012 by the UBC Board of Governors, is part of the University’s overall strategy for excellence and leadership.  It is an umbrella policy document that lays out high-level, long-term housing support targets and policies to improve housing choice and affordability for students, faculty and staff, for recruitment and retention purposes, given the challenging context of the Metro Vancouver housing market. Key elements of this Plan related to faculty and staff, include both rental and ownership program targets and information support:

  • Up to 30% of future neighbourhood housing on campus over the next 30 years will be rental as the neighbourhoods are built out. At least 20% will be restricted rental for faculty and staff; up to 10% will be market rent.
  • Within this restricted rental, UBC will pilot a non-profit rental program of up to 100 units intended for staff with a household income of less than $64,000 a year.
  • A restricted home ownership program will be explored for tenure and tenure-track faculty, for up to 10% of future leasehold units on campus.
  • A wider range of unit sizes will be encouraged from smaller ‘starter’ suites to units suitable for single or 2-person households, to larger 3-bedroom units for families.
  • Preferential and early access will be provided for faculty and staff to purchase new units before they are released for sale to the general public.
  • Continued expansion of student housing services.

The full Housing Action Plan 2012 can be downloaded here. It is a long-term plan intended to offer high-level guidance on restricted housing support levels from now until final build-out of the UBC campus neighbourhoods estimated at 2041. A comprehensive review is planned every 5 years.

Does this policy apply to Okanagan?

Faculty housing programs do not apply to the Okanagan campus where home prices are considerably lower than in Metro Vancouver. However, we are continuing to monitor the housing market context faced by faculty on our Okanagan campus.

If you have further questions, please contact:info.facultyhousing@ubc.ca

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