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UPDATE ON BC HOUSING'S NON-PROFIT ASSET TRANSFER PROGRAM

Posted on Tuesday, Jul 28, 2015

Since October 2014, BC’s social housing sector has been engaged in an unprecedented process, called the Non-Profit Asset Transfer Program (NPAT). Ten months in, the consensus among housing providers appears to be overwhelmingly positive.

For years, non-profit housing providers have operated their buildings under long-term leases, with the Provincial Rental Housing Corporation (PRHC) as owner of the land. The NPAT program involves BC Housing and PRHC selling the land to the non-profit housing providers that own and operate social housing buildings. BC Housing is in the process of transferring ownership of up to 350 PRHC properties to non-profit societies.

The opportunity is particularly attractive for housing providers because BC Housing provides a mortgage for the purchase price, and prepares most of the necessary legal documents for the transfer. The price is based on a fair market value appraisal.

The first tranche of transfers began in late 2014, and the second of three rounds begins this fall. The value of the land sold to housing societies has been estimated at close to $500 million.

BC Housing describes the steps required to transfer ownership of the land as follows:

  • BC Housing will contact non-profit societies to discuss if they would like to own the land(s) they currently lease, starting with societies that have multiple properties
  • BC Housing will send each society an information package to summarize the process
  • If the society decides to proceed, BC Housing will provide the necessary documents
  • The society will retain lawyers to review and process the purchase and mortgage documents

If a society chooses not to purchase its land, then the existing lease will continue as is. Either way, tenants on the site should not feel any particular impact.

Overall, the non-profit housing sector has responded very positively to the NPAT program. In particular, a number of our client societies have now successfully completed purchases of their land. Their new position as owners creates new opportunities for development – but also entails significant new obligations.

If you operate or serve on the board of a housing society considering the NPAT opportunity, we recommend you review the BC Non-Profit Housing Association position paper, available here.  

The BC Non-Profit Housing Association strongly supports the program as “a key capacity building endeavor for our sector, and as a way to help preserve affordable housing stock.”

For more details on these developments, or for assistance with the legal aspects of an NPAT transaction, please contact Ken Volkenant or Luke Johnson at De Jager Volkenant & Company.

 

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