Historically, Calgary has been a place of new futures, with innovative people and fresh opportunities around every corner. This spirit is perhaps nowhere more alive that on the campus of the University of Calgary. World-renowned educational institutions like Harvard, Oxford, and Yale have capitalized on the vitality of the that spirit to build city communities – combining local culture, impressive architecture, and everyday convenience within an easy proximity of the campus environment.
More recently, regional universities such as the University of British Columbia and Simon Fraser University have adopted the same concept with unequivocal success – taking it even further to attract multi-generations of residents through complete community development. These endeavours have translated into a more vibrant, active and prosperous university experience for all over the long-term.
The University District in Calgary will be no different. And, similar to the pre-established models at UBC and SFU, property in the University District will be sold as a leasehold, which is unfamiliar territory for many Albertans. James Robertson, President and CEO of the WCDT, helps us understand the difference between the myths and reality of purchasing a leasehold property, and why a University District home makes social and economic sense.
To own a leasehold home is to own everything on the land but not the land itself, because instead homeowners ‘lease’ it from a developer for a set term. Leasehold properties are registered at the Land Titles registry and can be financed just like any other home. You can buy them, sell them, plant gardens on them - even will them to someone. Homeowners will still pay City of Calgary property taxes and condo owners will pay condo fees as usual. So you have all the same rights and responsibilities as a traditional freehold property owner for the length of the lease, which in the case of University District is 99-years.
While leasehold situations are unfamiliar to many homeowners in Alberta, they are actually quite common in major cities around the world; Hong Kong, much of London, England, and the Town of Banff are all built using a leasehold structure. University District’s model is actually quite similar to what is currently happening at the University of British Columbia, and we’ve been really pleased to see how that project has progressed so successfully. We know we have a lot to be excited about.
To put it simply, the opportunity to create and develop a community on this land was so exciting and beneficial to the city and the University that it had to happen, and traditional freehold ownership options aren’t available to us.
Leasehold development occurs when land cannot be sold in a traditional way because the landowner must retain ownership of the land itself. Most often, this happens when the land is owned by the government (federal, provincial or municipal) or a public authority (like a school board, university, or native band) because often the law prohibits entities like these from offering freehold leases.
In this case, the University of Calgary received this land as an endowment on the condition that it should be used to support the University and could not be sold. University District was born from that vision to grow and enrich the University community and the city of Calgary as a whole, since absolutely anyone (not just University staff and students) can live in and enjoy the community.
Right off the bat, this area is extremely attractive. It’s location and proximity to jobs and post-secondary, health centres, recreation, arts and culture, the outdoors – all of it - is second to none in our city. It’s easy to see why people have been wanting to live here for so long.
The tangible benefit of the leasehold structure is that the Trust, as developer, is responsible for the development and maintenance of the community, so streets, infrastructure, and amenities (parks, recreation centres, etc.) will be thoughtfully designed, well taken care of and won’t be completely reliant on government funding or timelines.
At the end of the term, the WCDT can do one of two things —negotiate an extension of the lease or pay the leaseholder fair market value for the residence which sits on the land. In theory, homes could become less valuable near the end of the lease, if the area or developer because less desirable.
However, over the course of the term, and as people continue to move into the area, the Trust and the University have a vested interest to ensure that this community remains a vibrant community and sound investment for homeowners since University District will continue to serve the University of Calgary and support its students and staff for centuries to come. University District will outlive me and everyone I work with, which is a mighty thing to consider.