A portion of UBC's endowment is generated from land lease revenues earned from the development of new housing on UBC’s land.
The land was originally given to the university with the express purpose of funding academic excellence. All residential developments at UBC are provided on 99-year leases, and the proceeds are put into the endowment. The income generated from the endowment is then used to support a range of programs and services, including research excellence and capital infrastructure, such as the Life Sciences Centre.
What do land proceeds support?
Student scholarships and bursaries: The endowment provides financial support directly to UBC students through scholarships and bursaries. This includes assisting students in athletics, fine arts, music, medicine (e.g. MS and brain research), and many other disciplines.
Capital projects: Many new academic buildings and other facilities are supported by funds from the endowment. Endowment funds ensure that UBC continues to have cutting-edge facilities to support high-calibre research and teaching. A few examples are the Irving K. Barber Learning Centre and the Life Sciences Centre.
In addition to funding these aspects of UBC by means of a spending allocation, a portion of the endowment funded by land sale proceeds is not invested in the financial market, but rather in internal financing structures. The Student Housing Financing Endowment (SHFE) was established in 2011 in response to the Provincial moratorium on borrowing from third parties. The university is using the SHFE as a way to finance student housing projects to fulfill its commitment to offer 16,000 student bed spaces by 2024. Just like a mortgage, this money is then paid back with interest ensuring that a market-competitive return is generated for the endowment and providing an ongoing pool of capital to enable UBC to build more housing in the future. A recent example of new student housing supported in this fashion is the Brock Commons Tall Wood building, which created 400 new student beds. In 2017 a further portion of the endowment investments were allocated to a newly approved Faculty Housing Financing Endowment (FHAFE) to invest in employee loans in support of the Housing Action Plan.