UBC Housing Action Plan Forum – Proceedings Summary – “We have lost out on many hiring cases”

UBC hosted a ‘Housing Action Plan Forum’‏ today, 18 Jan 2012. The purpose was to “focus on faculty/staff housing, provide an “early look” at the options being explored and give an opportunity for participants to ask questions and provide feedback about key issues related to the options.”

‘Anonymous UBC Professor’, who attended this event, was very kind to send along this point-form summary of the proceedings:

————————————
Statements by Prof. Nassif Ghoussoub
– Board has approved densification of the campus “to remedy the housing problem”
– The housing situation keeps getting worse, not for real estate tycoons, but for colleagues
– Property assessment have increased 40% on west side. Increased perception of wealth, but doesn’t bode well for UBC.
– Problems in recruiting and retention. Cannot recruit heads, Canada Research Chairs, Canada Excellence Research Chairs, due to housing problems.
– Staff have problems too.

– What have we done?
– Ask for input – Discussion Forums – Talk to deans
– Blog – Visited universities with similar challenges (NYC, Columbia, Harvard, Irvine, …). Inquired at Stanford, Cambridge, Oxford. They are WAY ahead. Their bread and butter is competitive hiring.
– Next steps – Discussion paper, ready by the end of March.

——————————
Presentation by Lisa Colby
– Work done  – Reviewed data from housing demand studies

Current
– Faculty & Staff rentals
– 550 units (obviously more needed)
– Claim 20% below market rent
– Leasehold
– Claim 10-20% below cost
– Prepaid to avoid developers marketing cost.
– Do not have to sell to faculty/staff (benefits to 1st gen buyers)
– This is on hold
– Financial assistance package
– $45k lump sum or interest free loan, or mortgage interest assistance
– Student housing: 8500 beds, increasing roughly 500 per year

Current land use plan:
– 50% of new units must be university affiliated
– 20% rental (10% of which are non-market)
– Plan amendments allow for SMALLER units on campus

Claim: much of demographic is looking for studio 1 bedroom
[Remark: I doubt the accuracy of this statement.]
Claim: 60% of demographic don’t have kids or dependents

Here are various options for campus development going forward.

—————-
“Equity” Options

Options 1:
– 99 year leasehold, unrestricted growth

Option 2:
– Only for faculty and staff
– Intended 20% below market rate

Option 3:
– Only for faculty and staff
– Joint ownership & leasehold: own building, rent land

Option 4: Cohousing
– Large shared facilities (kitchen, dining room, etc.)

Option 5: Coop
– Only for faculty and staff
– Members purchase shares, no equity gains
– Perhaps of interest to renters who want a larger say in their building

————–
Rental Options

Option 1: Non-market rental
– Only for faculty and staff.
– 20% below market rents
– (More appealing if students are not allowed to rent)

Option 2: Non-profit rental
– Household income must be below $64k
– Below market rents, geared to incomes

Option 3: Market rates
– Quality & space are key factors

————-
Other options
– Priority access to housing options
– Potential financial assistance plan modifications:
– Extend to more employees
– Increased value
– On-campus purchase only?
– Claim: other universities that do this also give $30-$50k, so UBC is in the right ballpark.

Key considerations:
– Options should have enduring value that help future generations

—————————————-
Open-Mic Discussion

Someone from Faculty of Medicine:
– Much of the on-campus housing is obviously empty. It is immoral to allow the general public to buy on-campus housing.
– We need a community to make the campus interesting. The general public is an important part of that.

Lisa:
– Revenues from the general public are important to the academic mission. This goes to support student housing, scholarships, academic bursaries, research chairs, etc.

Carl Hansen, Asst Prof in Physics & Astronomy
– Came 2005. Could not afford anything. Now have 3 kids. Live in rental housing. Biggest apartment they’ve seen is 1000sqft.
– Have not been able to save money
– Housing prices have gone up 120% since then.
– Does 20% below market value make a difference? 1.5m and 1.8m are the same.

Lisa:
– Due to taxable benefit, 20% is the best we can do.
– Yes, it’s important to look at the range of sizes. There is less range than there should be.

Nassif:
– This is still under discussion. Your feedback is important.

Lior Silberman, Asst Prof in Math
– We don’t want “windfall programs” (i.e., co-development programs, advanced access programs)
– Waitlist for 3 bedrooms are several years (someone says 4 years)
– Don’t confuse demand with with “what is happening because what is available”
– The units are in the wrong market. There should be a “UBC-only market”.
– If the market was limited to us, the price would naturally be what we can pay.

Kera:
– Lisa asserted that people want amenities on campus. Housing survey from last year says 83% value amenities.

Anonymous:
– 2 kids
– Rental unit, 720 sqft
– “Faculty & Staff Housing” is really “Faculty housing”. Staff honestly cannot afford it.
– 50% of his paycheck goes to housing. What percentage should people pay off their paycheque to rent?
– 3% increase in rent. What is the justification?
– Loses sleep over this
– Renters are treated as second-class citizens.

Lisa:
– Definition of “affordability”: 30% of household income, assuming 10% downpayment, 5% interest over 25-year amortization. For renters, again 30% of household income.
– Reminds about below-market rental housing.

Don (CFO of some UBC housing group?):
– Market rent: 1000sqft, $2500/mo is typical for west side.
– We don’t want to go beyond the magical 20% discount that would trigger taxable benefits, that’s why we have to increase.

Lisa:
– Further explanation on taxable benefits: if the discount from market rent were greater than 20%, you’d have to pay tax.

Nassif:
– NYU, Irvine, Stanford, etc., all found ways around it. You see 40-50% subsidies there.

Eugene Barksy, Library:
– 20% discount is not enough.

Asst Prof in Faculty of Forestry:
– Came last year, father of 3
– $2200 for 1000sqft
– 46% of net income goes to rent
– Whether it’s 20 or 50% below market price, he cannot afford to buy, so he is stuck renting.

Andrew Patterson, PhD student in sociology:
– Has UBC lobbied city or province to control housing prices?

Lisa:
– We’re starting to engage with the city. No specifics at this point.

Bill Holmes, alumnus, lives in Hampton place. Income tax lawyer.
– Regarding taxable benefits, the 20% cutoff doesn’t make sense. Even if one received a 50% discount and paid tax on the 30%, you’d still come out way ahead.
– We haven’t heard how much money the board of governors is prepared to put into this.

Lisa:
– Financial assessment is not done. See the upcoming discussion paper. Their decision is partially
based on your feedback.
– There is not a firm line on 20%.

Nassif:
– We’re still computing the costs of the options.
– Our priorities are in competition with other priorities of the board.
– Market housing goes to our endowment.

Senior Faculty Member:
– We have lost out on many hiring cases.
– When bubble was not so bad, we lost CRC 1 chair to Alberta. [This was the first use of the word “bubble”.]
– We missed a candidate from Irvine.
– A hire from 2003 started applying for jobs, and we very nearly lost him due to the 7-year limit
for Financial Assistance Package.

Lisa:
– There are important tradeoffs between money from market housing to support academic mission.
– Tradeoff between faculty/staff and endowment.

Satish, Asst Prof in Computer Engineering:
– There are many universities which do not have land to support their endowment.
– Using land to support endowment is a very short-term plan.
– If we fail to attract faculty, the endowment is irrelevant as the land will go to the dogs.
– Harvard has $40B, which has nothing to do with their land.
– Faculty don’t even apply here. Why live in Vancouver when you can live in Austin and visit Vancouver every 2 months?

Kera:
– Claim that UBC was given this land specifically to support the endowment.
——————–

[Thanks ‘Anonymous UBC Professor’ – ed.]

26 responses to “UBC Housing Action Plan Forum – Proceedings Summary – “We have lost out on many hiring cases”

  1. This is really interesting! I noticed these comments:
    – If the market was limited to us, the price would naturally be what we can pay.
    – Much of the on-campus housing is obviously empty. It is immoral to allow the general public to buy on-campus housing.
    – Faculty don’t even apply here. Why live in Vancouver when you can live in Austin and visit Vancouver every 2 months?
    – We have lost out on many hiring cases.
    – Renters are treated as second-class citizens.

    All the consequences of the RE bubbles are described here: speculation, misallocation of capital, lost opportunities, etc. UBC, at a smaller scale, is just experiencing the effect of speculation and the real estate bubble that the rest of Vancouver is also experiencing… It’s really time for this bubble to burst and get people focus on more important things (on their research and teachings in that case).

    • “Renters are treated as second-class citizens.”

      I have still yet to experience this. Maybe every now and then someone calls me dumb for renting, but that’s it. I drive on the same roads, take the same buses, go to the same parks and enjoy all the same public services as homeowners, but I don’t have to pay property tax (directly).

  2. Part of the issue is one of comparison, faculty attend conferences enough and have friends at other institutions to see the grass on the other side. This is exacerbated when faculty 10 years senior are sitting in vintage SFHs. That future is no longer a viable option so the social strains are there.

    I really don’t get it; Van West should sliced and diced based on price signals, instead everyone is trying to poorly fix what’s in their control instead of seeing the big picture, that Vancouver has a speculative bubble that can only be solved by curtailing access to credit. Increasing density in Van West seems an obvious step given geographical constraints but of course this is touchy with incumbents, some tenured.

    • I agree that densification is a very important answer to what’s happened on the West Side. However, I really don’t think blame for that not happening should be laid mostly at the feet of “tenured incumbents” — doesn’t that kind of give City Hall a pass? And surely the entire West Side is not populated mostly by professors? (In fact, very few of my husband’s current colleagues live on the West Side and almost none own houses there.) The fact is, the city coffers benefit so greatly from the speculation and city politicians are so afraid of political fallout that there’s no political will to lift a finger to stop it — which imo is very shortsighted, cowardly, and totally selling out many people who have to live here. Of course, people could take to the streets, but in this city that seems only to mean to go jogging. I’m more aware of market forces than ever and the need to curtail access to credit, and frankly I think Canadians all over the country should be deploring their banks loudly and often, but again does that mean everyone else so negatively affected by this bubble just has to sit and wait for banks to do the right thing? One of the biggest problems in this city is that nobody protests enough and there seems absolutely no way, given various social mores and the polarization of the populace, that people could unite in a movement like the one that prevented highways from cutting through downtown (very successful, obviously). UBC itself could actually do a LOT more than it’s doing to counteract the effects of what is in other ways, as you legitimately point out, a fairly uncontrollable bubble created by market conditions.

      • “Of course, people could take to the streets, but in this city that seems only to mean to go jogging.”

        hahaha
        ‘Touché’
        The unfortunate truth.

      • They already took to the streets. It was called the occupy movement. It was about inequality, market failure, and the observation that the arms race between corruption and ineptitude is one that produces the wrong winners.

        UBC could impose a permanent $20/year/sqft tax on all non-student housing on campus. The purchase prices on those places would get really cheap, yet the endowment would have an ongoing (not one-time) source of funds. Even better, the variation in price from one cohort of hires to the next would be suppressed and the price-downside curtailed.

      • Zerodown: “It was about inequality, market failure, and the observation that the arms race between corruption and ineptitude is one that produces the wrong winners.”

        Actually, if you gained that perspective from ‘Occupy Vancouver’, you were in the minority. (Almost nothing was articulated here; “Drink More Raw Milk” was about the only clear message, even for those listening.)

        Potentially good idea regarding using tax/levy disincentives to shape UBC housing use. Far better than vain attempts to manage ‘below market’ rent or purchase prices (which, we’d imagine, could always be circumvented, somehow).

      • ” I really don’t think blame for that not happening should be laid mostly at the feet of “tenured incumbents””

        I suppose; the issue is there is a giant swath of low-density housing near a growing city with geographic constraints and price signals are screaming — have been screaming for a while — that higher density would be gobbled up quickly. This is nothing about blame, this is merely pointing out that, unlike many (though not all) universities, new faculty are not awarded the same housing choices as their seniors.

  3. Boo hoo. Time to move on folks. You can’t afford to live in Vancouver.

    • @armourb — If you’re crying for all those “folks” who “can’t afford to live in Vancouver,” your tears must be copious. If you’re being sarcastic, you’re being sarcastic about hundreds of thousands of people.

      Hey, are you Fredula or some incarnation (Fraudula?). A developer? A realtor? On City Council perhaps?

      • armourb is a separate entity.
        Don’t assume there is only one housing bull in Vancouver. We can assure you there are many. 😉

    • Nor can most Canadian university students afford to live in Vancouver or go to UBC anymore. I hate to say it but UBC will be (is now) a foreign university in Canada unless they can reinvent themselves as a “distance education” institute with all the attendant quality issues. It’s pretty easy to see that UBC has a broken business model – an inevitable case of the dutch disease.

  4. Zerodown — yes, I just wish the Occupy Movement would involve people from many more demographic sources all over the city and occupy many more places! (Bank lobbies! Vacant houses! Wouldn’t that be terrific?)

    And re: your suggestion above: read it now, right here on this blog, interesting ideas for what UBC could be doing!
    Zerodown, I hope you’ll forward this suggestion to the UBC Campus & Community Planning people, the President’s office, etc.!

  5. @ Vreaa “armourb is a separate entity.
    Don’t assume there is only one housing bull in Vancouver. We can assure you there are many.” 🙂

    Sorry, the tone just sounded so familiar.

  6. Productive Kids are also leaving too. The problem is not a UBC only issue. If the kids they teach are leaving town, what is the point of having UBC here?

    Overheard a conversation on Skytrain – 2 fresh graduates in software developing world. (One in user interface?) Both share cost with a roommate in a 2 bedrooms around Meterotown. They mentioned most rental units in their price range ($1k to $1.4k) were totally dump. Both are trying to gain more experience here, and will move to SF once opportunities present.

    I wonder how much these kids in software are paid in Vancouver. They must be a real saver if they only want to spend $600 on rent, or their salaries are that low preventing them to rent a better place.

    • From what I heard, fresh undergrads from UBC/SFU/etc in software probably get paid around $40 to $45K to start, pretty much the same as 10 years ago. However add in inflation, taxes, etc increases over that time period, $45K really isn’t a lot.

      • Everyone wants to live in the BPOE. If someone offers $40 to $45K to start, and someone accepts, then that’s the market rate. Why offer more, when there are always new freshly minted grads ready to work at that salary? Low wages haven’t stopped students from enrolling at local universities at all…. after all, it’s the BPOE!

      • Well there is one problem, after a while, people hears about all the high salaries being made in other parts of Canada and US, sometimes much much higher and decides to leave. So while you can always get the fresh meat for $45K, you aren’t building any big talent base and in IT which is ultra-competitive and relies huge on talent, that means you can’t compete and forever just be the laggards.

      • That’s true to some extent. But how many young people actually uproot themselves and actually leave…. some but not many. They have grown up here and have extensive family and sentimental ties to Vancouver. There are literally hundreds, if not thousands of new grads flowing into the job market every year. High salaries are paid to those in other parts of Canada/US who have relevant skills/experience in those industries, as per supply/demand. We can underpay Vancouverites because they are generally a contented bunch, compared to other locales.

      • everybody wants to live even more in India and China, that’s why salaries are even lower there

  7. Honestly, the housing problem at UBC is more of greed than anything else I think. WIth that much land and capital poured into all the new housing on campus, I have to question where all the profit went?

    Seriously, with the high price UBC condo commands, UBC could have easily made more than few hundred million if not billions on all the developments. That profit can be recycled back into better and more housing units for students, faculty, and staff with a wide range of housing options – condos, TH, co-housing, studio to 3/4 bedrooms etc all at very reasonable cost. The fact this isn’t done I think is simply because of greed. UBC decided to keep all that profits, pays out lots of bonus to president and other execs, rather than helping its employees (faculty and staff) and customers (the students.

    In terms of housing, a housing bubble is actually a total gift to UBC. Before the bubble, could UBC possibly sell $1M condos on leasehold land ever?? It was raking in the $$$ during the bubble selling all those condos, money that could be used to ease housing situation it now faces.

  8. Here are my opening remarks at the forum
    • Welcome and thank you for coming today to discuss the very important issue of housing choice and affordability for students, faculty and staff.
    • What is this task group about? Well! As you know, last year the Board approved major plans for the densification of university lands. Many of us supported these plans because it was an opportunity to remedy the housing problem for our students/faculty and staff. An opportunity to create affordable housing, more choices and a more vibrant community that will incentivize UBC personnel to live on campus.

    • Hence this task group that the Board asked me to chair to find ways to improve on what we are doing, and develop a Housing Action Plan for the Vancouver campus.

    • Now I say that this initiative is not coming one minute too soon as the situation keeps getting worse. Not of course for the city’s real estate tycoons, but to our colleagues hear at UBC who are trying to secure a decent home.

    • Only in the last 2 weeks, people living on the west side got their property assessments. Typically they were up by 40%. Now this may have made some people feel richer — but this doesn’t bode well for the future of UBC.

    • And before I got involved in this, I used to only know about the recruitment and retention problems we have in my own department. Since then, I have been hearing stories from all over campus. Political science, Psychology, Physics. Departments that can’t even recruit heads, CRCs even CERCs because they are coming from jurisdictions with cheaper housing.

    • And staff. No one has ever considered the plight of staff. Not at UBC and not elsewhere. We are also determined to do something about that. Because there is no other way for a university to go forward.

    What have we done so far? First, we wanted input, your input on what to do and how best to do it. And since we started this process last April,

    • We have been organizing fora, just like this one, which is the third in a series we have hosted on this topic.

    • I’ve talked to Deans to find out what they see as the challenges for their academic departments.

    • We have started a blog on the Board of Governors website, and we have been encouraging people to contribute comments. Please do!

    • CCP staff have had focus groups with renters and owners to learn more about what approaches would help them live on campus.

    • They have been meeting with your employee representatives to find out what they are hearing from their members.

    • We have also visited other universities that have the same challenges. NYU, Columbia, Harvard, UCLA, Irvine. Inquired about Stanford, Cambridge and Oxford. And believe me these universities are way ahead of us on this front. Not only because they are located in prohibitively expensive areas but because their bread and butter is competitive hiring, which is what UBC is destined to do.

    • Campus Community Planning staff have also been looking with other jurisdictions, such as Whistler, and other organizations such as BC housing to what find out what has and hasn’t worked for them.

    • The next steps? We are planning on having a discussion paper that outlines some potential options in late March. You will be getting a sneak preview today from Lisa, mostly some of the options we are exploring. So please speak up if you fell that some of these options are deficient or lacking.

    • Students should feel free to ask any question they may have about student housing. Brian Heathcote is here from SHHS and will be available during the Q&A. There will also be an opportunity during the discussion portion of the forum for students to talk about their housing issues.

    • I will now ask Lisa Colby, the Director of Policy Planning for Campus and Community Planning, to tell you more about some of the different strategies we are exploring to address the housing challenges faced by faculty and staff.

    • The Task Group has developed a set of principles that will guide our work in developing the Housing Action Plan.

    1. Align future campus housing plans with the academic mission of UBC.

    2. Develop a comprehensive framework for affordable and desirable housing choices for faculty, staff, and students, including target ratios for rental and lease housing while balancing returns to the Student Housing Financing Endowment and the Trek Endowment.

    3. Create the basis for a sustainable year-round university community to support shops, services and transit.

    4. Ensure that the LUP occupancy targets for households connected to the UBC campus, through study or work, are appropriate and achieved.

    5. Consider the governance implications of housing policy, as well as issues related to interfaces between the various land use designations on campus.

    6. Ensure a robust communications strategy is implemented to engage the campus community and various stakeholders in the development of the Housing Action Plan

    • Since we started this process last April, I have heard from many of you about the challenges you are facing with housing and about the impact this is having on recruitment and retention.

    • I’ve talked to Deans to find out what they see as the challenges for their academic departments.

    • And we have also been talking to other universities, such as Columbia, Harvard and UCLC, and other jurisdictions, like Whistler, to what find out what has and hasn’t worked for them.

    • The development of the housing action plan is vital for the future of the university and I thank you all for coming here today to discuss this important issue.

    • We are planning on having a discussion paper that outlines some potential options available for you to review in late March.

    • But in advance of that paper being released, we wanted to share with you some of the progress we have made to date and some of the things we are exploring.

    • The focus of today’s discussion will be faculty and staff housing, as the November forum hosted by the AMS focused on student housing. However, students should feel free to ask any question they may have about student housing. Brian Heathcote is here from SHHS and will be available during the Q&A. There will also be an opportunity during the discussion portion of the forum for students to talk about their housing issues.

    • I will now ask Lisa Colby, the Director of Policy Planning for Campus and Community Planning, to tell you more about some of the different strategies we are exploring to address the housing challenges faced by faculty and staff.

    • Prof Ghoussoub, many thanks for clarifying your opening comments here.
      [Readers can find Ghoussoub’s blog here.]

      By the way, professor, what is your opinion regarding the position that much of the affordability problem with housing in Vancouver (and, by extension, for Staff and Faculty at UBC) is the result of a speculative mania in real estate?

      As early as 2003, prices diverged from those determined by fundamental values such as wages and rental income, and are now, by any fundamental measure, 2 to 3 times overvalued. A housing price correction of 50%-66% would rearrange the affordability discussion, would it not?

  9. mad in vancouver

    Vancouver and UBC have turned into whores.
    We are all compliciant for letting this happen.

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