Affordable homeownership through emphyteutic leases in Quebec

Many Canadians are having difficulty finding affordable housing. This is certainly the case in the Brome-Missisquoi Regional County Municipality (RCM), in the Estrie region. The RCM has only 55 affordable housing units, and many people struggle to find adequate housing.

In this project, Foncier solidaire Brome-Missisquoi (FSBM), a non-profit organization in the region, will test an innovative solution. It aims to use a community land trust (CLT) and emphyteutic leases to establish 8 affordable housing units in Brome-Missisquoi RCM, Quebec. It will document this process and its potential in the hope of scaling it up across the region and throughout Quebec.

Project scope and expected outcomes

Emphyteutic leases are long-term leases that are increasingly used around the world

Emphyteusis is a long-term lease between a landlord and an emphyteuta (the future tenant/owner). During the lease, the emphyteuta enjoys most of the rights of a property owner but is responsible for the property’s maintenance. When the lease ends, the property and any improvements revert to the owner. The landlord may, however, recognize the improvements made by the emphyteuta, including landscaping or renovations.

Emphyteutic leases are used around the world between solidarity land organizations (SLOs) and housing project residents. One of their features is that the unit is not resold on the open market when the lease ends. This lets the landlord control the resale price when a new resident lives in the home, making it affordable in perpetuity. Existing homes can also be included under this tool, ensuring the property remains affordable.

Testing a community land trust with emphyteutic leases in Brome-Missisquoi RCM, Quebec

With support from the National Housing Strategy Demonstrations Initiative, this project aims to demonstrate the process of implementing emphyteutic housing stock. It will test a community land trust (CLT) project using emphyteutic leases in the Brome-Missisquoi RCM. The land is perpetually held in trust to help provide access for community use, such as community-owned affordable housing.

The project will build 4 housing units on 2 adjacent lots in the municipality of Dunham. It will also protect 4 existing homes elsewhere in Brome-Missisquoi RCM. Low- and modest-income households will then sign emphyteutic contracts for the properties.

Under the contracts, FSBM will commit to providing 20% of the funding for the housing. The new emphyteuta would hold a mortgage for the remaining 80%. They will also cover any expenses related to upkeep. Their mortgage investment and any renovation investments will be returned at the end of the lease or when they leave. The property would then be leased to the next emphyteuta.

This approach would help renters who cannot purchase a home access homeownership with dignity. This particularly applies to young families, low-income single-parent families, young farmers and other vulnerable groups. It also allows FSBM to control the resale price and annual renovation limit, helping maintain the property’s affordability.

The entire project will be documented with a view to scaling it up throughout Brome-Missisquoi RCM and across Quebec.

Developing policy and practice to support future property acquisitions

The first step of the project will see FSBM expand its board of directors to ensure it has the diverse experience it needs for the project. It will also strengthen its legal and administrative framework to handle the development of the project’s housing stock. The project will then establish a financing structure for acquiring the necessary lots and buildings. This includes raising funds through community bonds, fundraising and other avenues.

Once the necessary approvals from Dunham Town Council are received, construction of the new housing units can begin. This includes the utility infrastructure (water, sewers, access roads and electrical connection), which will be amortized as a monthly fee for future residents. The project will also look to acquire 4 homes to test emphyteutic management on existing buildings.

The recruitment of residents is a key part of the project. It will be a multi-party process led by an advisory committee. Target groups will be low- and moderate-income households, young families, young farmers, immigrants, seniors and more. After an extensive application and discussion process, the 8 participating households will be chosen.  

The project will be evaluated throughout the process and everything will be documented. A case study, practical guides and a final report will be developed and shared with the public and interested organizations.

Raising awareness about emphyteutic leases and encouraging their use in Quebec

In the short term, the project will provide 8 residents/families with an opportunity to access homeownership. This has the potential to be expanded through the entire Brome-Missisquoi RCM and across the province.

A related goal of this project is to establish emphyteuta, or any other form of property dismemberment, as a third designation of resident under Quebec law. This would help raise awareness of the emphyteutic lease and encourage its use, further improving housing affordability for low- and moderate-income households.