Vancouver's pricey housing market impacts recruitment of UBC professors

UBC may be a place of mind, but it's certainly not one where many minds can afford to live — including faculty.

It's no secret that Vancouver's housing market is unaffordable, unsustainable and practically impenetrable. Faculty have been feeling the heat as they struggle to navigate the "Bermuda Triangle" of Vancouver’s real estate.

Jennifer Klenz, a senior instructor in the botany and zoology department, has been at UBC for nearly 20 years. She has more or less accepted that she will never be able to afford to own her own place.

"I'm so used to the idea that I will never own anything," said Klenz. "I'm also just one income as opposed to two. It's just not an option in Vancouver."

She pays $1,880 for a two bedroom place in Point Grey, which she shares with her five year-old daughter.

For Klenz, one concern that stems out of not owning her own property is the impossibility of using property as equity when she retires.

"I don't care that I'm a renter, but am I going to run out of money to pay for rent by [retirement]? Am I going to be out on the streets?" 

She notes that UBC does offer a pension plan, but adds that faculty also usually take much longer to start their careers, impacting the effectiveness of the plan. She herself spent a total of 30 years in training before becoming a tenured instructor.

Klenz is not the only one who faces these kinds of issues. Thomas Pedersen, a former associate dean in the Faculty of Graduate Studies, grappled with housing concerns over 10 years ago. To counter these concerns, when he worked at UBC he resided on Bowen Island and commuted for a total of three and a half hours every day. 

Pedersen is now a faculty member at the University of Victoria. Although housing was not the only factor that motivated him to leave UBC in 2002, it certainly played a key part."I simply could not continue commuting for so many hours per day, particularly with a young son."

Taking the job at UVic was a "no-brainer" that solved his problems.

Beyond the personal

The issue of affordability of housing in Vancouver not only affects individuals, but also the university in their efforts to recruit and retain faculty.

"UBC, in recruiting faculty, competes in the global labour market. Typically, faculty members who are good enough to get a job at UBC — a very desirable employer — can also get a job elsewhere," said Christopher Rea, a professor in the department of Asian Studies. "Some faculty don't come to UBC just because of the housing. They don't see any path to potentially being homeowners."

Pedersen recounted the difficulties of finding faculty during his time as associate dean. However, he did note that recruitment impediment becomes less of an issue when hiring for lower positions within faculty.

"Assistant professors are keen to get a job anywhere. They'll live in a basement suite for a while. They don't care," he said. "But after they get tenure, after they've had two kids, they won't want to live in that basement suite anymore with their families."

That, according to Pedersen, is where UBC will start facing issues with retention of faculty. When faculty have established their reputations in their fields, they would be less inclined to stay if they have been offered a position in a city where the real estate crisis is less acute and they are able to find a home that suits their needs.

"What a university is, in essence, is a collection of bright minds," he said. "And if you can't attract bright minds, then you don't have a good university."

Attracting bright minds

The Faculty Housing Ownership Program (FHOP) is UBC's attempt to alleviate some of the housing issues that faculty have expressed dissatisfaction with, giving them the option of applying for a 2nd Mortgage Loan.

The 2nd Mortgage Loan is an option that gives approved, tenure or tenure track faculty members a loan of up to 33 per cent of the purchase price of a new property. The maximum amount is $330,000 and there is no annual interest fee.

The allocation process gives priority to faculty who are of "critical and strategic importance to UBC,” according to Lisa Colby, managing director of the Faculty Staff Housing Office.

"As much as we would love to have the resources to give everybody support — and we do try to do that on a non-monetary level — when it comes to these more expensive programs, it has to be strategic and it has to be linked to the academic mission," explained Colby. Applications would be scrutinized by an academic committee to determine which are “meritorious,” and once approved, faculty members may choose a unit from one of two projects in Wesbrook Place. 

UBC also provides a forgivable down payment loan of up to $45,000 for five years with the condition that the faculty member remains employed.

If home ownership is not a feasible option, there are also rental units available to faculty who still wish to live on campus.

The problem within the solution

All of these loans, as many faculty have found, are limiting, subject to taxation, and they need to be repaid. As far as the forgivable down payment loan goes, the loan amount is not generally enough to make a dent in the cost of a house.

"It's a gift, it's a good thing," said Navin Ramankutty, professor at the Liu Institute of Global Issues. "The problem is the amount. I'm not sure when it was set, but it must have been ten years ago. Given the current state of the market, the magnitude, it's nowhere near what you actually need to purchase a house."

Ramankutty believes, as many other faculty members do, that loans aren't the right way to go.

"At some point, the university has to come up with a creative solution if they want to attract top notch faculty to Vancouver," he said. "The one thing UBC has ... is a large piece of land. I feel that of all the different businesses around Vancouver, UBC is uniquely positioned in being able to address this problem."

"I think it would make a lot more sense if UBC started to use its land so they don't have to pay more and more money out of pocket and tied up for years and years," said Rea.

In the past, the FHOP also provided the option of a Restricted Resale Capped Appreciation program, which essentially is the development of housing units sold to approved faculty members at 33 per cent below the open market price. The units must be resold back to the university.

This option, introduced in February 2014 along with the 2nd Mortgage Loan option, was cancelled in June 2015 due to changes in provincial regulations that would place liability on members of the Board of Governors, according to Colby. No units were sold under this option.

There had also been a Co-development Program in which housing units would be paid for by the faculty homeowners themselves and built by UBC Properties Trust. This program was also terminated, citing reasons that it would not have been beneficial for the university because the units could be resold to the open market rather than back to the university.

Instead, UBC has been selling its land to private developers. 

"To date, their priority has been on essentially piecing [its land] out for ready cash so they get cash they can use right now or added to the endowment or pay for capital projects," said Rea. "What they have not prioritized is building units that faculty and staff can purchase for themselves."

The Capped Appreciation project and the Co-development Program would have provided faculty with options of buying into the market. They were, according to Rea, popular options that would have been successful in retaining faculty and creating a sustainable campus community.

Other universities have found a solution in creating designated faculty housing — SFU, for example, has done this with a project called Verdant.

"I'm confident that there's a way for UBC to figure it out. I just don't think that there's been the institutional will to do that because of the opportunity cost — because they're making money hand over fist on these private deals," said Rea.

How bad is bad?

Ramankutty, the Liu Institute professor, moved to Vancouver two years ago. He and his wife are both UBC faculty members and they live with their family in a rental unit on campus.

He admits that they were in a fortunate situation given that they sold their home in Montreal when they moved to Vancouver — giving them some equity — and that both their combined salaries are fairly decent. Still, they aren't able to purchase a home, even with the loans that UBC provided.

"If I'm unable to buy a house given my situation, I can't imagine how a new assistant prof coming to UBC could,” said Ramankutty. He said that if he and his wife had been offered a job at UBC today, they would have made a different choice.

At the administrative level, while Colby acknowledges that housing is an issue that comes up in the process of recruitment, she said that recruitment rates are high for UBC.

"So far, our recruitment success rate is high and turnover is low. We just want to keep it that way. We're aware of the challenges and we don't want to fall behind," said Colby. "Our programs do give our employees some options and is intended to support recruitment and retention, and they are doing that. We just have to make sure they keep up."

Marc Parlange, dean of applied science, said that the housing situation poses a serious problem when it comes to recruitment.

"It's a real issue that we see all the time. It's just fundamental. We are in an international competition for the best and the brightest faculty members who have multiple offers, typically," said Parlange. "Housing is just basic — everyone needs a place to live. I don't think anyone expects a huge house or anything like that, but I think they'd expect a home and they want to feel comfortable. We want our faculty to be able to live close to campus so they can be present for the students." 

"This has been an issue that faculty have been very adamant about for quite some years," said Rea.

"At the Board of Governors, some people don't see the problem. They don't see faculty leaving in throes because of housing and so they ignore the problem. If we were losing hundred and hundreds of faculty members, if they were just streaming out, then they would see the problem."

"I don't feel like ethically or morally, the school needs to buy me a house. That'd be ridiculous to say," said Ramankutty. "But the consequence of that is if the school wants to remain a top university in Canada and in the world, it's going to have challenges retaining top notch faculty or recruiting top notch faculty."

Moving forward

Faculty consultations around the FHOP and possible revisions were done in July 2015. None of the revisions were approved by the Board then, but a report was produced with feedback from faculty members.

"We're doing more research throughout the summer and we will be reporting it to the Board in the fall," said Colby. Combined with the feedback from faculty, there will be recommendations submitted to the Board for next steps.

"There are certain constraints that we have to work in, but we certainly understand the challenges faced by employees. I think it's important just to try and get in there, have a range of programs. No one program will work for everybody — it's never going to solve the housing market problem in Vancouver," she said.

With the arrival of UBC’s new president, Santa Ono, Rea hopes that positive change will come about."UBC could sell off all of its remaining land and it could make a profit. But one of the real costs of that would be giving up the opportunity to create a really fantastic long-term, sustainable community rather than a high turn investment, second-home community," he said.

"My hope is that the Ono administration will see that and decide that they want to invest in themselves in a more meaningful way. That will take a big philosophical change and I hope that UBC has the courage to do that."

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