On the forested slopes of Burnaby Mountain, thousands of residential units have been built on land that was never sold. UniverCity at Simon Fraser University—one of Canada's most-studied mixed-use communities—sits entirely on university-owned land held through long-term ground leases. The developer builds, but the institution retains the dirt. A housing community that might otherwise have remained undeveloped for decades has instead become a functioning neighbourhood. That model, once an academic curiosity, is now a serious instrument for unlocking Metro Vancouver's most stubborn development sites.

Ground leases are not new. What has changed is the scale of their deployment and the growing interest from capital markets. Under a ground lease structure, a landowner—such as a First Nations band, a university, a church, or a legacy institution—retains title to the land and leases it to a developer for a fixed term, typically 60 to 99 years. The developer finances and builds on the leasehold interest. Because they are not purchasing the underlying land, which in Metro Vancouver can represent 40 to 60 per cent of total project cost, the capital requirement drops significantly. Sites that fail to pencil out under a freehold model can become viable rental or mixed-use projects under a ground lease.

The development community widely acknowledges that the land cost problem in Metro Vancouver is not going away. With Metro Vancouver land values remaining among the highest in Canada, the structural math of new rental construction has been challenging. Ground leases do not solve affordability—rents must still service construction debt—but they remove the single largest barrier to feasibility: the land acquisition cheque.

The opportunity is concentrated where large landholders with long time horizons sit inside or adjacent to the urban boundary. Three categories stand out. First Nations bands, particularly the Musqueam, Squamish, and Tsleil-Waututh Nations, hold significant reserve and fee-simple land within the region's urban footprint. Faith communities and legacy institutions such as universities and hospital foundations also hold land whose development potential has yet to be fully realized.

For First Nations development arms, the ground lease is a tool for sovereignty. Retaining land title ensures the nation's asset base grows with every development cycle rather than being liquidated. Musqueam Capital Corporation has been among the more active participants in the region's leasehold development landscape, with projects demonstrating how the structure supports both commercial returns and long-term community benefit. The nation retains the land, the developer assumes construction and leasing risk, and the lease payments provide the nation with a durable income stream.

For developers and their lenders, the critical question is financing. Leasehold security differs from freehold, and conventional lenders have historically applied a discount or declined such projects. That calculus is shifting. CMHC's MLI Select program, which offers preferential loan insurance terms for purpose-built rental projects, is available on ground lease structures provided the lease term meets minimum thresholds. Developers should treat CMHC MLI Select eligibility as a baseline design criterion.

Pension funds have also taken notice. The combination of inflation-indexed ground rent escalation and the underlying security of institutional landowners has made ground lease investments attractive to capital allocators seeking real asset exposure. In the UK and Australia, ground lease securitisation is a mature asset class. In Canada, it remains in the early stages, but the pipeline of projects in Metro Vancouver is growing.

The practical mechanics are vital. Ground leases in British Columbia are registered at the BC Land Title and Survey Authority, creating a leasehold title that can be mortgaged and transferred independently of the freehold. Developers must ensure lease terms include explicit mortgagee protection clauses, which are non-negotiable for most institutional lenders and CMHC.

Municipalities are increasingly supportive. The City of Vancouver's Broadway Plan and several Burnaby transit-oriented area plans contemplate leasehold development on institutional lands. Zoning approvals do not distinguish between freehold and leasehold title. What differs is the due diligence required by lenders and the time needed to negotiate lease terms, which can span 12 to 18 months on complex sites.

Ground leases are a mature instrument for a market where land cost is the primary barrier to housing supply. For developers, the opportunity lies in identifying institutional landowners with dormant sites. For investors, leasehold rental assets with long-term institutional landlords offer a durable income profile. For landowners, the ground lease provides a path to develop without divesting. In a city where land is the scarcest resource, keeping it is the point.