Armstrong's Sunset Housing Society is concerned about its lease with the provincial government.

Armstrong's Sunset Housing Society is concerned about its lease with the provincial government.

Housing society seeks to break lease

Support sought from Armstrong and Spallumcheen councils

A North Okanagan housing society is asking for support from a pair of municipalities as it looks to terminate a property lease with the provincial government.

Armstrong’s Sunset Housing Society, which operates a 20-unit facility for low income and physically handicapped residents has asked Armstrong and Spallumcheen councils for support as they want the province to appeal to the Crown to terminate its lease and turn clear title over to the society free of any encumbrances.

“The provincial government advocates for the care of low income seniors so it follows they should seriously consider this request,” wrote Shirley Jackman, vice-president of the society, in a letter to both councils.

Former Armstrong mayor Jack Smith gave the land the society sits on – adjacent to Highland Park Elementary School – in 1977 to the province for the purpose of leasing it back to the society on a 60-year lease for a housing development for low income seniors.

Since then, the facility was built and well-managed by the society, proving low-income housing.

From the time the facility was built, the society says it has been paying monthly on the mortgage for construction of the development, and are now paying for lease of the land that was given to the province.

For the first 20 years of the land lease, a nominal fee was charged but the lease was re-written to begin charging a market rate for the land. Both payments were managed through Canada Mortgage and Housing Corporation (CMHC).

“We can confirm that by the end of 2016, the society will have paid $277,322 for the lease alone, and, if not terminated, the society will continue to pay $16,089 for the next 12 years,” said Jackman. That amounts to $193,068 for a final total of $470,390 over 40 years.

Said Armstrong Coun. Paul Britton: “Why still pay market value at 40 years for property that was given to the government?”

The payments are separate over and above the mortgage payments made.

“There seems to be no rhyme or reason for the 60-year lease only allowing for 20 years at $1 and the remaining 40 at a market rate,” said Jackman. “But for some reason, the lease was signed and the society has certainly lived up to the commitment.”

Said Spallumcheen Coun. Christine Fraser: “Rewriting the lease deflects the purpose of low-income housing for seniors.”

Jackman said CMHC is giving housing societies in B.C., through the B.C. Housing Corporation, a chance to pay out their mortgages if they meet certain criteria. The society is also being told it perhaps could arrange for a mortgage to ‘purchase’ the land.

“While it’s a long awaited chance to get out from under a 10 per cent mortgage rate, we feel it is unbelievable that the people of Armstrong should be expected to purchase land that was given to the province specifically for this project in the first place,” said Jackman.

If the society acquires clear title to the land, it would have almost $16,100 annually that could go toward maintenance and improvements, and also allow the society to consider other uses for a vacant portion of the land, including adding more housing.

Spallumcheen and Armstrong councils are in favour of the society’s request. Spallumcheen has given support in principle while Armstrong has drafted a letter to be sent to Shuswap MLA Greg Kyllo.