Kwanlin Dun’s new lease on land

Land leasing is rare in the territory, but not unheard of. There have been at least two lease agreements signed in the Yukon, and by the end of the year there could be a lot more.

Land leasing is rare in the territory, but not unheard of.

There have been at least two lease agreements signed in the Yukon, and by the end of the year there could be a lot more.

The Kwanlin Dun First Nation is putting as many as 276 lots (and a condo development) into the land inventory.

But they are not for sale, just for lease.

So far, only the Teslin Tlingit Council and the Carcross/Tagish First Nation have issued such lease agreements. But they were solely for First Nation citizens.

Many of the new lease lots will be available to everyone.

The important thing is for buyers to read the lease and make sure their interests are protected, said Susan Zanders, owner of Verico Zanders & Associates Mortgage Brokers Inc. She grew up in Whitehorse and handled a lease for a Carcross/Tagish First Nation citizen in 2007.

An agreement for the first five available Kwanlin Dun lots, located on Grove Street, Walnut Crescent and Pine Street in Porter Creek, is being chosen from a collection suggested by the Canadian Mortgage and Housing Corporation, said acting chief Ray Sydney.

The First Nation will offer 35-year leases, he said.

“That satisfies CMHC because that goes 10 years over the value of the mortgage payments of the home, usually.”

Whenever the leaseholder wants to sell the home, the agreement resets to zero, Sydney added.

“And the lease agreements never end, it just gets renewed, so it’s secured. It’s their home, and they sit on that land and just renew their lease agreements.”

“Thirty-five years is not a long lease,” said Zanders, adding an automatic renewal is a condition that must be included in the agreement.

“I haven’t seen really short leases like that. The length of time seems really short to me.”

The shorter the lease, the more possibility for problems and the shorter the mortgage, she said.

And that drives up mortgage payments.

With no land in the mix, it seems cheaper initially, but there are lease payments added to the mortgage payment, said Zanders.

“You never own that land, it’s owned by someone else, you’re just paying to use it, to have your house on it,” she said.

These annual, lease payments can be as low as two to three per cent of the lot’s assessed value, but nothing’s been decided, said Sydney.

“That’s normal in Canada, but it’s not chiseled in stone,” said Sydney. “Every five years it will be up for renewal. And it will be adjusted accordingly.”

And buyers should remember the lease fee is based on the land’s assessed value – not the home. While houses can depreciate, the value of land tends to appreciate over time, said Zanders.

“But real estate is really quite unique in that the value, or the price, is based strictly on supply and demand,” said Whitehorse-based appraiser Jim Yamada.

And when it comes to home ownership, the biggest barrier is always financing, he added.

So leasing, because it seems cheaper, may be attractive.

But it’s not always less expensive.

“Banks, generally, don’t mortgage properties that are leased,” said Yamada.

There are exceptions, like loans issued against personal property, like a mobile home, he added.

But the security of the investment is still up for debate. For example, would the lease allow you to move the house off the land when the lease is sold or expired?

It’s often too expensive to do that anyway, said Zanders.

And what conditions could have a leaseholder kicked off the lot, like environmental problems or general degradation of the land?

There will be regular monitoring, especially for things like pollution, said Kwanlin Dun technical staff.

But many other details haven’t been worked out yet.

Knowing that Kwanlin Dun is in talks with the national mortgage and housing corporation is a relief, said Zanders.

Few mortgage brokers can deal with lease agreements, and fewer would handle them if not approved by the CMHC, she said.

But the national corporation’s approval doesn’t guarantee it’s a good arrangement, she added.

“Leasing is not a first choice just because of security,” said Zanders.

No one can really know what will happen with the Kwanlin Dun’s leasing arrangements until one is struck, she said.

“It will be a trial run,” she said. “It’s going to be very interesting.”

And by issuing leases to the public, Kwanlin Dun is setting precedent in the territory.

It has identified the potential for 85 more lots in McIntyre, another 185 lots beside that, a condo development in Valleyview, one lot downtown on Jarvis Street and five in Porter Creek.

The First Nation’s construction company, Canyon City Construction, will sign the leases, as a developer, to build homes on the first five, single-family lots in Porter Creek.

The foundations are expected to be poured before the snow flies, said Sydney.

But the First Nation is not planning any more beyond that, he said.

“To build a family home at this point and time, if you talk to contractors, they say roughly $225 a square foot,” said Sydney.

The person holding the lease should be able to tailor the size of home to their own financial situation.

The lease will require the house be built on the land within two years, he said.

The First Nation wants well-designed homes, comparable to those around them, in healthy communities, said Kwanlin Dun officials.

And according to city staff, most of the remaining developable land in town is owned between Kwanlin Dun and the Ta’an Kwach’an Council.

It puts Kwanlin Dun in a good situation. Its final agreements with Ottawa stipulate it gets most of the income tax collected from people living on its land.

The question is whether the deal will be sweet enough to get people to sign on.

Contact Roxanne Stasyszyn at

roxannes@yukon-news.com

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

City of Whitehorse’s Selkirk pump house on Selkirk Road in Riverdale on Jan. 26. Whitehorse city council decided Jan. 25 that there will be no advantage for local firms planning to submit proposals for the final report and design of a second barrier water treatment project for the Selkirk pump house. (Crystal Schick/Yukon News)
No local content weighting on pump house contract

Work will see design for water treatment system

The Yukon Workers’ Compensation Health and Safety Board is issuing $10 million in rebates to employers this month. (Crystal Schick/Yukon News)
Yukon employers to receive $10-million in rebates from Workers’ Compensation Board

Eligible employers will receive cheques based on total premiums paid in 2020

Connie Peggy Thorn, 52, pleaded guilty Jan. 27 to manslaughter in the 2017 death of Greg Dawson. (Crystal Schick/Yukon News file)
Whitehorse woman pleads guilty to manslaughter in death of Greg Dawson

Connie Thorn, 52, was arrested in October 2019 and pleaded guilty in Supreme Court on Jan. 27.

Abigail Jirousek, left, is tailed by Brian Horton while climbing a hill during the Cross Country Yukon January Classic in Whitehorse on Jan. 23. Jirousek finished second in the U16 girls category. (Crystal Schick/Yukon News)
Cross Country Yukon hosts classic race

Cross Country Yukon hosted a classic technique cross-country ski race on Jan.… Continue reading

Yukon Premier Sandy Silver talks to media on March 5, 2020. The Yukon government said Jan. 25 that it is disappointed in a decision by the federal government to send the Kudz Ze Kayah mining project back to the drawing board. (Crystal Schick/Yukon News file)
Territorial and federal governments at odds over Kudz Ze Kayah mine project

The federal government, backed by Liard First Nation, sent the proposal back to the screening stage

Yukon RCMP’s Historial Case Unit are seeking the public’s help locating Bradley MacDonald, a 42-year-old man who has been missing since Aug. 5, 2019. (RCMP handout)
Historical Case Unit seeks man missing since 2019

Yukon RCMP’s Historial Case Unit are seeking the public’s help locating a… Continue reading

Yukon RCMP said in a press release that they are seeing an increase in tinted front passenger windows and are reminding people that it is illegal and potentially dangerous. (RCMP handout)
RCMP warn against upward trend of tinted windows

Yukon RCMP are seeing more vehicles with tinted front passenger windows, prompting… Continue reading

An arrest warrant has been issued for a 22-year-old man facing two tickets violating the <em>Civil Emergency Measures Act</em>. (Joel Krahn/Yukon News file)
Arrest warrant issued for CEMA violation

An arrest warrant has been issued for Ansh Dhawan over two tickets for violating CEMA

The office space at 151 Industrial Road in Marwell. At Whitehorse city council’s Jan. 25 meeting, members voted to sign off on the conditional use approval so Unit 6 at 151 Industrial Rd. can be used for office space. (John Hopkins-Hill/Yukon News file)
Marwell move set for land and building services staff

Conditional use, lease approved for office space

The bus stop at the corner of Industrial and Jasper Road in Whitehorse on Jan. 25. The stop will be moved approximately 80 metres closer to Quartz Road. (Crystal Schick/Yukon News)
UPDATED: Industrial Road bus stop to be relocated

The city has postponed the move indefinitely

The Royal Canadian Mounted Police detachment in Faro photgraphed in 2016. Faro will receive a new RCMP detachment in 2022, replacing the decades-old building currently accommodating officers. (Joel Krahn/Yukon News file)
Faro RCMP tagged for new detachment

Faro will receive a new RCMP detachment in 2022, replacing the decades-old… Continue reading

In a Jan. 18 announcement, the Yukon government said the shingles vaccine is now being publicly funded for Yukoners between age 65 and 70, while the HPV vaccine program has been expanded to all Yukoners up to and including age 26. (1213rf.com)
Changes made to shingles, HPV vaccine programs

Pharmacists in the Yukon can now provide the shingles vaccine and the… Continue reading

Parking attendant Const. Ouellet puts a parking ticket on the windshield of a vehicle in downtown Whitehorse on Dec. 6, 2018. The City of Whitehorse is hoping to write of nearly $300,000 in outstanding fees, bylaw fines and court fees, $20,225 of which is attributed to parking fines issued to non-Yukon license plates. (Crystal Schick/Yukon News file)
City of Whitehorse could write off nearly $300,000

The City of Whitehorse could write off $294,345 in outstanding fees, bylaw… Continue reading

Most Read