UBC may be ahead of the curve when it comes to addressing the massive need for student housing across the province.
The university is continuing to create a government business enterprise (GBE), an entirely separate trust that would let UBC circumvent the caps of provincial borrowing and build student housing at an accelerated rate. The project, called UBC Hospitality Trust (HOST), would function as a financially self-sufficient, university-owned provider of housing and food services.
“It is creative, it is unprecedented,” said interim VP Students Andrew Parr. “We would be the first institution in the province, and arguably one of the first if not the first in the country to create this arm’s-length entity that is still owned and operated by the institution.”
UBC believes this model would be the first of its kind for any publicly-funded Canadian university.
A memo obtained by the The Ubyssey by freedom of information request forecast the need for approximately 16,800 additional beds for students across BC. The “mainland/southwest” area alone — which includes schools like UBC, BCIT, Simon Fraser and Langara — makes up 10,800 of that number.
Parr estimates UBC’s portion of that need is between 5,000 to 6,000 beds. Student Housing and Hospitality Services hopes to add approximately 6,300 across both UBC campuses over the next 10 years if the GBE is successful.
The memo from the Ministry of Advanced Education, Skills and Training notes that their developing student housing strategy includes exploring “partnerships such as a [GBE] model for the financing and operation of student housing.”
“We know we have a strong support from the province on this,” said Parr.
Parr said he is confident in the future of the project, but UBC still needs to go through a formal approval process.
That includes meeting the needs of credit rating agencies and determining the income and property tax implications of a GBE with the Canada Revenue Agency (CRA). UBC has already submitted their materials to the CRA and is awaiting a preliminary ruling.
The CRA could potentially rule that all forms of relevant tax are applicable, which would put such a massive cost burden on UBC that the GBE may not make sense anymore. But Parr said it’s more likely that any taxation won’t be extreme.
“If the preliminary ruling … is favourable, we are going to take that as being the equivalent of a final ruling and start to move forward on really digging into a deeper transition planning process and the formal approval process with the government,” he said.
A ministry spokesperson confirmed that “the Province and the university are working together to form a government business enterprise” and that government assessment would “ensure UBC HOST is viable and will not put the institution or the government’s fiscal plan at risk.”
Parr said it’s unlikely that smaller universities will be able to emulate this model, since they may not have access to as much startup and maintenance capital.
If all goes well, Parr says, the GBE could be presented to the Board of Governors for final approval as early as December 2018 and be formally established in the spring of 2019.
“If we can land it, I think it’s really something that can bring benefit to all stakeholders,” said Parr. “I would say first and foremost, by allowing UBC to build housing more quickly and more cost-effectively, that’s a benefit to students.”
—With files from Zak Vescera