First Nations enter the Whitehorse real estate market

Whitehorse’s real-estate landscape is about to change. With most land claims settled, self-governing First Nations, who are prohibited from…

Whitehorse’s real-estate landscape is about to change.

With most land claims settled, self-governing First Nations, who are prohibited from selling their lands, will be leasing it to the public.

Public buy-in will all depend on the terms of the lease, said veteran realtor Mike Racz, past-president of the Yukon Real Estate Association.

He thinks people will still lean toward buying traditional freehold property, where the purchaser owns the land, he said.

However, he’s waiting to see how the new type of real estate mixes in with the Whitehorse market.

“I think you’re going to see a lot more of this in Yukon, BC and other areas where they’re settling land claims,” he said.

“I guess the question is what is the lease rate going to be and what are the terms going to be.”

Whitehorse will find out this year.

The Carcross/Tagish First Nation is planning to release 36 county-residential lots near Cowley Creek along the South Klondike Highway later this year, said Justin Ferbey, senior government official and executive director with the band.

“There’s 23 lots at 1.5 hectares, nine lots at two hectares and four lots at three hectares.

“We plan to have them out this summer,” he said.

The First Nation has been working with local lawyers and the Canada Home and Mortgage Corporation to come up with a lease that’s as close to freehold property as possible and that will successfully allow lease purchasers to obtain mortgage financing, he said.

The lease will be for 40 years with an automatic renewal when the lease is up.

The lease will automatically restart with 40 years if the leaseholder sells their interest in the property, added Ferbey.

“There wouldn’t be continual payments; it’s a one-time payment to, in essence, purchase the right of access to the land,” he said.

“The terms of the lease would be whatever the going rate is for land. The lease is a legally binding document, so there’s a great deal of certainty that the leases can be traded at market value.”

“It’s transferable, but the only difference is the title is held with the First Nation.”

If the lease is renewed, the leaseholder is not charged again.

And, if the leaseholder sells their interest they’ll receive the full amount of the sale price, he added.

The leases have been proven as the band has already entered into its first lease agreement with Council of Yukon First Nations grand chief Andy Carvill, said Ferbey.

“Andy Carvill acquired our first approved CMHC lease and was able to mortgage his house on reserve through the Toronto Dominion Bank.”

The band hasn’t decided how many of its initial offering of properties will be released to the public because some will be reserved for band members, said Ferbey.

Those members will be offered a $150,000 grant for their homes, which they’ll be able to keep if they live on the property for at least five years, he said.

“Ultimately the lots will be traded just like any other lots on the market, but initially there will be a certain percentage of the lots for CTFN members,” he said.

“It’s to just to try to encourage people to get into private ownership in private homes.”

The Carcross band isn’t the only First Nation planning to release country residential lots on the market this summer.

Last week, representatives for the Ta’an Kwatch’an Council brought forward an application to city council to rezone a 48.3- hectare piece of property across the highway from the Hidden Valley Subdivision.

Because their property is within city limits, the band approached council looking to change the area’s zoning from future development and environmental protection to allow it to put in 25 approximately one-hectare properties.

The subdivision is also part of land-claim settlements so it will also be subject to a leasing regime.

Leased land is not a new thing for Canada, said Paul Fabri, a BC market analyst for the Canada Home and Mortgage Corporation.

A number of First Nations in BC, including bands in Kamloops and Kelowna, have developed housing on reserve land.

“We first started seeing these back in the Okanogan back in the early 1980s,” said Fabri from his Kelowna office.

“We’ve had single-family subdivisions; we’ve had townhouses; we’ve had apartment complexes, condominiums, just about any type of housing you could think of.

“Often they’re available for a little less cost than you’d find for a freehold property because, typically, the land cost is lower.”

The land developments have been extremely successful and have little to no impact on existing housing prices, he said.

“Has if affected price elsewhere? We’ve seen no evidence where it has affected price at all in housing developments off-reserve.”

As long as leases provide certainty, banks and other mortgage lenders consider land leases as suitable security, said John McWilliam, underwriting manager for the Prairie and territories region for the CMHC.

“It’s not always like Yukon where most of it is freehold,” said McWilliam from Calgary.

“In the NWT, much of the land is held under lease arrangements; in Nunavut, all of the land is leasehold land.

“Leasehold is an acceptable form of mortgage security.”

The most important part of the lease is a clause guaranteeing renewal, he added.

“It’s always the extension that’s the critical piece of the property to facilitate the sale so the homeowners don’t

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