Staff Report - Rent-to-Own Affordable Home Ownership Partnering Agreement

Background

On April 1, 2019, Council passed the following resolution with respect to a request from Ledcor Investment Inc. (Belmont Residence East and Belmont Residence West) for the City to support a Rent-to-Own Affordable Home Ownership (RTO) Program, which they wish to implement as part of their development at Belmont Market and Residences. Council passed the following resolution at that time:

Direct staff to enter into a Partnering Agreement with Ledcor Investments Inc. to provide a Rent-to-Own program for a 36 month period and use funds from the Affordable Housing Reserve fund to provide financial assistance of $5,000 - $6,000 per successful RTO sale up to a maximum of 20 units (i.e. a maximum of $100,000 - $120,000).

Commentary

Staff have worked with Ledcor to further develop the terms of the Partnering Agreement, which is attached for reference as Appendix A. As part of the renegotiated terms of the Agreement, a per unit grant amount of $3,000 per one-bedroom and $5,000 per two-bedroom is proposed. Depending on the mix of units, this could result in an overall grant of $90,000 - $100,000 if the City were to endorse the maximum of 20 units. Council may wish to note that the 2018 accrual into the Affordable Housing Reserve Fund was $564,484, and the current overall balance of the Fund is $2,039,036.

Should Council endorse the Partnering Agreement as presented in Appendix A, they may also choose to instruct staff to establish an overarching rent-to-own policy that outlines the provisions of any additional services or programs beyond what is proposed in this Partnering Agreement.

Options

That Council:

1. Authorize staff to enter into the Rent-to-Own Affordable Home Ownership Partnering Agreement, as presented in Appendix A;

AND

Instruct staff to prepare an overarching Rent-to-Own policy and refer the policy back to Council for review prior to the City providing any further assistance;

OR

2. Make the following amendments and the Partnering Agreement:

---

OR

3. Refer the draft Partnership Agreement back to staff for further research;

OR

4. Take no action with respect to the Partnering Agreement at this time.

Submitted by:
David Sametz, Land Development Planner

Concurrence:
Adriana Proton, Manager of Legislative Services

Concurrence:
Matthew Baldwin, MCIP, RPP Director of Planning

Concurrence:
Michael Dillabaugh, CPA, CA, Director of Finance

Concurrence:
Braden Hutchins, Director of Corporate Services

Concurrence:
Darren Kiedyk, Chief Administrative Officer

:ds

PARTNERING AGREEMENT

RENT-TO-OWN AFFORDABLE HOME OWNERSHIP PROGRAM

THIS PARTNERING AGREEMENT dated for reference _________________, 2019 is BETWEEN:

CITY OF LANGFORD (the “City”), a municipal corporation under the Community Charter (British Columbia)
2nd Floor, 877 Goldstream Avenue, Langford, British Columbia, V9B 2X8

AND:

BELMONT RESIDENCES EAST LIMITED PARTNERSHIP, a British Columbia limited partnership, 1200-1067 West Cordova Street, Vancouver, British Columbia, V6C 1C7
(“East LP”)

AND:

BELMONT RESIDENCES WEST LIMITED PARTNERSHIP, a British Columbia limited partnership, 1200-1067 West Cordova Street, Vancouver, British Columbia, V6C 1C7
(“West LP” and, together with East LP, the “Partnerships”)

A.
The Partnerships are engaged in the real estate development business and are constructing, or intend to construct, market residential condominium developments known respectively as “Belmont Residences East” and “Belmont Residences West” (and together, “Belmont Residences”) and located at 940 and 960 Reunion Avenue, Langford, British Columbia on lands legally described as:
Parcel Identifier: 030-357-977
Lot 3 Section 75 Esquimalt District Plan EPP75724 (“Lot 3”)
and:
Parcel Identifier: 030-357-969
Lot 2 Section 75 Esquimalt District Plan EPP75724 (“Lot 2”);

B.
An affiliate of the Partnerships is developing a mixed-use development known as “Crossing at Belmont” containing, inter alia, rental housing on lands located at 945 and 955 Reunion Avenue, Langford, British Columbia and legally described as:
Parcel Identifier: 030-358-027
Lot 7 Section 75 Esquimalt District Plan EPP75724;

C.
The City supports the creation of rent-to-own programs in new developments in the City to provide attainable and affordable market accommodation for residents within the City of Langford.

D.
The Partnerships have created a rent-to-own affordable home ownership program in which residents who rent a unit at Crossing at Belmont can accrue 25% of the monthly rent towards the purchase of a condominium at the Belmont Residences (each, a “Condominium”) to a maximum of 5% of the purchase price of the Condominium (the “RTO Affordable Housing Program”)

E.
Section 21 of the Community Charter authorizes the City to enter into a partnering agreement with another party for the provision of a service on behalf of the City and to provide assistance to a business in accordance with that Agreement.

F.
The City considers that the service of providing the RTO Affordable Housing Program in the City of Langford (the “Service”) is an undertaking and activity that is of important social and economic value to the City and of community benefit in achieving affordable housing for its residents.

G.
The City and the Partnerships wish to enter this Partnering Agreement for the Partnerships to provide the Service to eligible residents within the City of Langford.

NOW THEREFORE in consideration of $10.00 paid by each party to the other, and other good and valuable consideration, the receipt and sufficiency of which each party acknowledges, the parties agree as follows:

1. Definitions - In this Partnering Agreement,
   (a) “Assistance” has the same meaning as under the Community Charter;
   (b) “Enrollment Form” means the Belmont Rental Rewards Program Enrollment Form attached as Schedule “A” hereto, as the same may be amended by the Partnerships from time to time;
   (c) “RTO Affordable Housing Program” has the meaning set in Recital D; and
   (d) “Service” has the meaning set out in Recital F, and for further clarity, is the service of providing attainable and affordable housing for residents within the City of Langford by way of the RTO Affordable Housing Program as set out in more detail in the Enrollment Form.

2. The Service – The Company agrees to provide the Service and to do so on behalf of the City.

3. Authority to Provide Assistance - The City will, from time to time, in accordance with section 6, provide assistance to the Company, by providing grants (the “Grant”) to the Company to allow Eligible Members (as defined in the Enrollment Form) to receive a subsidy toward the deposit they are required to pay in respect of the purchase of a Condominium, in the following amounts:

(a) $5,000 for each two-bedroom unit; and

(b) $3,000 for each one-bedroom unit.

4. Limit to Assistance – The City will provide Grants as provided for in section 3 herein to allow for a rebate to eligible purchasers to a maximum of 20 units. The City shall not be obligated to make any further Grants or payments to the Company thereafter.

5. Use of Assistance – The Company shall use the Grants provided by the City pursuant to this Partnering Agreement solely for the purposes of providing the Service, and in particular, to apply them against the deposit for the units.

6. Payment of Grants – The City will pay the applicable Grant to the solicitors for applicable Partnership (the “Vendor”), in trust, upon written request from the Vendor accompanied by evidence satisfactory to the City in its sole discretion, acting reasonably, that the Vendor has entered into a contract of purchase and sale (the “Purchase Contract”) with an Eligible Member (as defined in the Enrollment Form) in respect of a Condominium, the Eligible Member has paid the full amount of the initial deposit payable thereunder less the applicable Grant amount and all conditions for the benefit of the Eligible Member have been satisfied or waived within the time specified in the Purchase Contract. No Eligible Member will be entitled to the payment of the applicable Grant in the event of a default by the Vendor, and if the purchase and sale of the Condominium does not complete for any reason, including a default by the Vendor or the Purchaser, the Vendor will cause its solicitors to repay the Grant to the City forthwith upon resolution of any dispute between the Vendor and the Eligible Member in respect of the Purchase Contract and the deposit thereunder. All Grants will be retained in trust by the Vendor’s solicitors until they are either paid to the Vendor or its mortgage lender upon completion of the purchase and sale of the Condominium pursuant to the Purchase Contract or returned to the City and, in particular, no Grant will be paid to the Vendor pursuant to any deposit protection contract.

7. Statutory Requirements & Notices – The Company acknowledges that the City must comply with applicable requirements in connection with the provision of assistance under this Partnering Agreement, including the requirements to provide public notices of council’s intention to provide assistance under a partnering agreement as required by section 24 of the Community Charter.

8. Term – The term (the “Term”) of this Partnering Agreement shall be 36 months commencing on the 1st day of October, 2019 and ending on the 30th day of September, 2022. For clarity, this Partnering Agreement will apply to any Purchase Contract entered into with an Eligible Member during the Term, regardless of when the purchase and sale of the applicable strata unit thereunder completes.

9. No Partnership or Joint Venture – While this Partnering Agreement is a ‘partnering agreement’ under the Community Charter, nothing in this Partnering Agreement shall give rise to relationship of partnership, joint venture or agency, nor shall the Company have any authority to bind the City in any way.

10. No Effect on Municipal Powers – This Partnering Agreement does not, and nothing herein will affect or limit the discretion, rights, duties or powers of the City or the approving officer for the City under the common law or any statute, bylaw or other enactment.

11. Assignment - The Company may not assign, or purport to assign, this Partnering Agreement without the prior written consent of the City, which consent the City may withhold at its sole discretion and without reason.

12. Amendment - This Partnering Agreement may not be modified except by an instrument signed in writing by the parties.

13. Laws - This Partnering Agreement will be governed by and construed according to the laws of British Columbia.

14. Interpretation – In this Partnering Agreement:

(a) all dollar amounts referred to in this Partnering Agreement are Canadian dollars;

(b) reference to the singular includes a reference to the plural, and vice versa, unless the context requires otherwise;

(c) article and section headings have been inserted for ease of reference only and are not to be used in interpreting this Partnering Agreement;

(d) the term “enactment” has the meaning given to it under the Interpretation Act (British Columbia) on the reference date of this Partnering Agreement;

(e) reference to any enactment includes any regulations, orders or directives made under the authority of that enactment;

(f) reference to any enactment is a reference to that enactment as consolidated, revised, amended, re-enacted or replaced from time to time, unless otherwise expressly provided;

(g) reference to a particular numbered section or article, or to a particular lettered Schedule, is a reference to the correspondingly numbered or lettered article, section or Schedule of this Partnering Agreement and any Schedules to this Partnering Agreement form part of this Partnering Agreement; and

(h) where the word "including" is followed by a list, the contents of the list are not intended to circumscribe the generality of the expression preceding the word "including".

As evidence of their agreement to be bound by the terms of this Partnering Agreement, the parties have executed this Partnering Agreement as of the date first above written.

CITY OF LANGFORD by its authorized signatories:

---

Mayor:

---

Clerk:

Date: _______________, 2019

BELMONT RESIDENCES WEST LIMITED PARTNERSHIP by its general partner,
BELMONT RESIDENCES WEST DEVELOPMENT INC., by its authorized signatories:

---

Name:

---

Name:

Date: ________________, 2019

BELMONT RESIDENCES EAST LIMITED PARTNERSHIP by its general partner,
BELMONT RESIDENCES EAST DEVELOPMENT INC., by its authorized signatories:

---

Name:

---

Name:

Date: ________________, 2019