The UBC administration is quite aware of how critical the issue of housing is to the future of the university and is committed to addressing it. The President said as much in his latest town hall meeting, and the Board of Governors did after all set up a task group to develop a “Housing Action Plan”. But no assistance plan is cost-free and a key question is how much they are willing to forfeit in revenue loss from land leases in order to produce a serious response to the housing crisis. I wish I already knew the answer to that but I don’t. However, I know enough to say that the university’s current financial pressures will be another hurdle to reckon with en route to developing affordable housing options for UBC-affiliated personnel.
Now unlike Stanford or UC-Irvine, which have dedicated substantial parcels of their real estate to support faculty housing while forgoing any financial return from the transactions, UBC had decided many years ago to proceed differently as it elected to unlock the cash value of its land for the express purpose of beefing up its endowment.
Indeed, more than 20 years ago, UBC established a private company, the UBC Properties Trust (UBC-PT). Its mission was to “acquire, develop and manage real estate assets for the benefit of the University, by servicing and marketing lands for residential development”. So far, UBC-PT has contributed over $200-million in cash to the UBC Endowment.
In contrast, UC Irvine did also set up –26 years ago– a separate, non-profit body—the Irvine Campus Housing Authority (ICHA)— but with the sole purpose of building and managing rental and for-sale housing for eligible UC-Irvine employees on lands donated (rather sold for $1) to the university by the Irvine Company. Unlike UBC-PT, the ICHA is not required to yield its profits (if any) to the University. In a way, its role is similar to what Whistler has done to administer their below-market workforce housing.
One does wonder, in view of Vancouver’s hot real estate market and the current bearish stock market, whether having an endowment that is investing proceeds of land sale (OK leases!) in the financial markets is a better approach than “sitting” on a continuously appreciating real estate. After all, with the current volatility in the financial markets, one needs to make lots of irreversible condo sales to make up for the hundreds of millions that the endowment funds can sometimes lose overnight.
Moreover, selling university lands to the highest bidder in order to beef-up the university endowment fund, is hardly a legacy-making initiative. Why would any administration choose to accumulate piles of cash in an endowment (for succeeding administrations to spend?), instead of going down in history as the one that took care of its own, and in the process save the future of UBC as a first rate university? Isn’t it a no-brainer for the Board of Governors to re-visit the mandate of UBC-PT, at least in regard to the ultimate destination of its proceeds?
Well, the picture is indeed changing and the administration has indeed ambitious plans for the cash generated by land development, just as one would expect from any pro-active administration. Actually, much of the expected earnings from land development –at least in the near future– are kind of already committed to major infrastructure projects at UBC. It is the earning power of the UBC Property Trust that is allowing us to improve the public realm of the university, to build new student housing such as the Ponderosa Hub. And now we hear talks about a potential ambitious “district energy” project for South Campus.
In other words, the money (at least the future returns of UBC-PT) is already spoken for; hence the pressure for generating it from the university lands sooner and not later. And the challenge to develop a transformational affordable housing action plan looms larger than expected.
Am I trying to manage expectations and avoid future misunderstandings between the Board/Administration and the rest of us? You bet I am!