While the North Lake Road area near Egmont may be a pristine and peaceful place to reside, escalating costs and uncertainties around lease renewals are raising stress levels for people who live there full-time and seasonally.
President of the association that represents about 30 area residents, Rick Craig told Coast Reporter that current year assessed values for the land portion of North Lake properties increased by between 98 and 169 percent over 2021 levels. For the nine properties that remain under provincial leases, the lease rates they pay to the province for use of the land, which is referred to as “rent” in their leases, will increase correspondingly.
“Some of those people are in a tough spot. It means that every one of the leaseholders is facing at least a 100 per cent rent increase from the province, when that same government restricted other residential rent increases to 1.5 per cent this year,” Craig said.
Fulltime residents are charged lease amounts based on five per cent of their assessed land values and those using the lease for a secondary residence are charged three per cent. Leaseholders also pay property tax on the improvements that they own on the lands.
Jim Close, a part-time resident on a North Lake Road leased property for the last 35 years, told Coast Reporter his annual rent will increase to about $9,000 from $4,500 in 2021. Close plans to appeal his property assessment. “I am going to argue mine based on the fact that it has gone up dramatically over one year compared to the increases in land value assessments up and down the Sunshine Coast,” he stated.
2022 property taxation impacts are adding more cost concerns for those leaseholders and others in the area. Their assessed land value increases are higher than the increases in the 60 to 70 per cent range for properties in other Pender Harbour areas. That difference will mean North Lake residents will see a bigger jump in their 2022 property taxes than many others in the community. All properties in their area are also facing 2022 tax increases specifically related to costs for the Egmont and District Fire Department.
In addition to facing hefty lease and taxation cost increases, some of the leaseholders are in legal limbo, as their leases have expired. Close has been awaiting his renewal for three years. Craig said that part of the delay in the renewal process is related to discussions at the joint use table established under the Foundation Agreement between the shíshálh First Nation and the province. The Nation must agree on the conditions of any provincial leasing of properties in its territory.
“It is not a fair situation” Craig said, as it means the leaseholders cannot sell their interest in the property, due to the unresolved renewal process.
Kelly Slade Kerr is another seasonal resident leaseholder awaiting a renewal. In a Jan. 24 interview, she said her family took on their North Lake property, purchasing the improvements on their site, in 2010. She said she has completed her lease renewal application and also paid about $1,200 for an archaeological assessment on the lot, which was a new requirement for the upcoming renewal.
Once her renewal is completed, the lease fee on her property for 2022 based on her new land value assessment will be $8,000 a year. That is up from $3,000 in 2021, an increase that she said is “mind boggling."
“I would like the government to look at their policy with regard to setting lease rates and put a cap in place. The issue is the current policy just sets the lease rate as a percentage of the assessed value and has no provisions with respect to controlling the magnitude of a rate increase in any particular year.
Close said that when the leases were originally put in place by the province, the rent portion was capped at a maximum of $400 per year.
“The value that you can sell a leased property for depends on what the ongoing costs of holding the lease will be. By setting the lease rates so high, the government has devalued our property. At the same time, we are stuck in a renewal process where we don’t even have a lease to sell if we wanted to,” Slade Kerr said.
She is also concerned that the government has been decreasing the duration of the lease tenures. “They were originally issued for 20 years, then went to 15 years and have now dropped to 10 years. I am going to be in a situation where they are only going to renew me with a 10-year lease but I will be two or three years in. All I will have to offer any prospective purchaser is a seven-year lease.”
A concern that Craig voiced about the lease process is that the province calculates leased property values the same way as freehold properties. “The problem is that when you are a leaseholder, you don’t have the same rights. You can’t cut trees, you can’t rent it out, you have all kinds of restrictions on what you can do."
“We just want fairness. The lease structure is a mess and the government has to deal with it. Many of these people would like to buy their properties but can’t and they are being shafted cost wise and through the lease process,” said Craig.
“I support the process of First Nations reconciliation, but I had understood that one of the guiding principles is that it would not impact private citizens and that you are not going to see a situation where land is being taken from private citizens to accomplish the goals. The reduction in the tenure length is having an economic impact on private individuals. I do not think that anyone at the shared decision-making table realizes that. When they are putting a cap on the length of time that a lease can be renewed, they are actually devaluing what we have been granted by the government,” said Slade Kerr.
“We have invested and made improvements to a property on the understanding that the government provides revolving 20-year leases. Because of arrangements that are being discussed at the shared decision-making table, our investment is being significantly devalued.”
Both Close and Slade Kerr are concerned about what the rent increases will mean for people who live on leased properties on the lake year-round, some who are pensioners and living on fixed incomes. “I am certain this is going to create a hardship for some of the community members,” Close said.
Slade Kerr said purchasing a leasehold property is one way of making housing on the Coast more affordable. “This situation is reducing the opportunities for people to be able to afford to own a home.”
The affected residents have held discussions with Nicholas Simons. According to Craig, the local member of the legislative assembly (MLA) said he understood the unfairness of the situation and would be speaking with colleagues about what could be done. Close said that part time residents who have residences in other ridings have also reached out to their MLA’s for help.
Close stated, “We have asked the minister responsible for the leases [Doug Donaldson, Minister for Forests, Lands, Natural Resource Operations and Rural Development] how they can justify this type of rent increase and have received no response.”
