BANFF – Banff’s rental vacancy rate is hovering just above zero, with people struggling to find affordable and appropriate accommodation, pushing Banff’s elected officials and administrators to look at any and all options to deal with the decades-old housing crunch.
With a mandate to tackle the housing crisis, council is looking at a rezoning application from Banff Caribou Properties to amend the land use bylaw to reduce parking requirements for apartment staff accommodation in a bid to cut barriers to building housing.
They are also looking at long-held policies such as doing away with third-party credits and making cash-in-lieu payments more in line with the actual cost of building housing, along with consideration of a vacancy tax and preventing construction of low-density single-family homes in future.
Officials say Banff’s premier national park tourist town is short about 750 to 1,000 housing units.
“Council has the ability to influence some things, not all of them, but we’re trying to bring you things you can influence and can move the needle on to address your No. 1 strategic goal – housing,” said Darren Enns, director of planning and development for the Town of Banff.
Banff does have one of the strongest legislative tools in North America to help regulate housing demand – Parks Canada’s need-to-reside rules.
Enns said he believes compliance is high, noting the Town of Banff works on a number of checks and balances with the federal agency, which enforces the residency requirements.
“It’s a relatively effective tool for managing housing pressure in this town,” he said.
“But on the supply side, we have a lack of land and we have regulatory barriers that exist for new housing development.”
Administration stands behind required housing associated with development and intensification of use as a noble public policy approach, but as evidenced by Banff’s ongoing low rental vacancy rates, it’s not enough on its own and supplementary approaches should be considered.
“We are at 0.3 per cent vacancy rate, which is not a healthy vacancy rate,” said Emma Sanborn, a development planner for the Town of Banff, noting Canada Mortgage and Housing Corporation (CMHC) puts a healthy vacancy indicator at between three and five per cent.
“In 2018, we saw this rate creep up to just over one per cent for the first time in a long time, and in 2021 we think the 3.2 per cent vacancy rate should be viewed with caution as the data was collected in the height of the COVID-19.”
In addition to all of the businesses in Banff that need housing for staff in order to run their businesses, many businesses outside of the townsite also rely on accommodation in the national park town for their staff as well.
“The Sunshine Village long-range plan has been developed as of late and makes mention of housing in the form of RV and van living,” said Sanborn.
“That’s something we need to consider in the Town of Banff when employees of these out-of-town locations will be residing in our town … and also folks living in vehicles in our townsite in the summer because they have nowhere to live.”
Sanborn said housing pressures have grown throughout the Bow Valley, noting Canmore used to be a more affordable town with a higher vacancy rate than Banff.
“That was kind of our safety net for housing and we do not think that this is anymore the case,” she said.
“Since COVID-19 we think Banff and Canmore’s vacancy rates and rental rates are very similar and they are no longer a cheaper, kind of overflow option for Banffites."
In addition, there are also more people retiring and aging in Banff longer, according to a Bow Valley-wide housing needs assessment in 2019.
Officials say the cohort aged between 74 and 85 years is growing at the fastest rate, while the 25-44-year-old group is declining as a proportion of the population, especially in Banff.
“Ten or 12 years ago, the seniors population represented six per cent of the overall town population and it is now 11 per cent,” said Alison Gerrits, the director of community services for the Town of Banff. “That’s significant.”
Introduced in 1991 after incorporation of the municipality, Banff’s housing policy sets ratios for the amount of required housing associated with various uses and is meant to reflect the number of employees generated by a particular business.
The existing policy requires bedrooms actually be physically built, however cash-in-lieu payments and third-party partnerships and credits are alternatives when an applicant does not have the land, capital or time to build the housing themselves.
Sanborn said the cash-in-lieu option is seldom used, noting it has generated just $118,000 for the housing reserve in the last six years – the median rate payment was just over $4,000, the highest payment was $65,000 and an outlier, and the lowest payment was $2,778.
As of 2018, the cash-in-lieu rate increase has been tied to the construction price index for apartment buildings in Calgary, and as a result, the cash-in-lieu rate has risen from $21,000 in 2018 to $53,813 in 2023.
However, Sanborn said the rate still lags behind the cost of building a bedroom in Banff.
“This increase is helpful, but still results in a lag between the cash-in-lieu rate and the cost to create a new bedroom,” said Sanborn.
“As a market response, third-party credit prices historically have trailed the Town’s cash-in-lieu rate and are a more economic choice for an applicant in need of housing credits.”
On a 4-3 vote on May 23, the governance and finance committee directed administration to draft a policy amendment to come up with a cash-in-lieu rate that reflects the real cost of building a bedroom in Banff.
However, Coun. Barb Pelham wanted to eliminate cash-in-lieu completely.
“It is simply not adequate even at an increased cost. I think it’s a loophole for change of use for business,” she said.
“Cash-in-lieu had a trial and should be out the door.”
The direction to bring cash-in-lieu payments more in line with the true cost of building housing means this option will become an even less common route for meeting housing requirements unless actions are taken to limit the ability to purchase third-party credits at lesser rates.
To that end, administration has recommended eliminating the purchase of third-party credits.
Sanborn said administration believes this option has failed to instigate new housing in the community that was not already in the process of being built, adding that eliminating this option would encourage applicants to build the housing or pay cash-in-lieu of housing.
“These are two routes that appear to be more effective at stimulating net new bedrooms in the community,” she said.
Sanborn said bedroom credits are sold at what is referred to as “grey market rate”.
Before the governance and finance committee voted to direct administration to draft a policy amendment removing the option to purchase third-party bedroom credits, Mayor Corrie DiManno acknowledged this might create a “bit of friction” depending on how many credits exist.
“The North Star is net new housing and I think with this system in place it does not meet the goal of net new housing,” she said.
“With the previous conversation around cash-in-lieu, if you can’t build it, you’re going to pay for it and that’s likely the way moving forward.”
Another tool encouraged by administration to increase housing supply is to investigate removal of single detached housing as a use within the land use bylaw and limit maximum dwelling size.
Sanborn said the 2019 housing needs assessment determined that large single-detached homes, even larger duplexes, are not meeting existing or future housing needs within the Banff townsite.
“Administration has favoured presenting land use bylaw amendments that encourage building housing supply, and fewer regulatory measures, however, it is administration’s opinion that reviewing a size limit for all dwelling types – not only single detached homes – could be of value,” said Sanborn, noting the land use bylaw currently has no mechanism for limiting the development of very large homes.
Required parking for residential development is also seen to curb housing development, by limiting the number of dwellings that may be built on a site with floor area and site coverage restrictions.
Sanborn said eliminating parking requirements could also help owners of unauthorized basement suites or dwellings find a path toward compliance.
According to Banff’s 2018 community social assessment, 11.6 per cent of Banff households live in overcrowded dwellings.
“Approved dwellings are safer for occupants as they can report unsafe living conditions without fear of losing their home,” Sanborn said.
To help combat Banff’s housing crunch, administration also suggested council may be interested in exploring a vacancy tax based on the success of other Canadian municipalities.
Sanborn said there are currently 18 undeveloped residential sites within the Town of Banff and an unknown number of vacant or under-occupied homes, but suggested administration could return at service review with costs associated with conducting a vacancy analysis.
She said Vancouver introduced an empty homes tax in 2017, and in 2022, properties deemed or declared vacant were subject to a tax of three per cent of the property’s assessed taxable value, with that rate increasing to five per cent this year.
“This tax has successfully increased occupancy of previously empty homes and directed millions of revenue towards affordable housing initiatives,” said Sanborn.
Council has also taken its first look at Banff Caribou Properties’ application for an amendment to the land use bylaw, specifically to the off-street parking requirements for development of apartment housing, which was previously vetted by Municipal Planning Commission.
The amendment calls for the bare minimum number of parking stalls to be reduced even further for apartment housing for staff accommodation – so long as they meet a number of conditions such as proximity to transit and bike parking stalls.
Enns said parking rules for residential development is consistently noted by property owners and developers as one of the most significant regulatory barriers for new residential developments in Banff.
“After 15 years of watching applications fly by the wayside due to parking requirements, I can say with absolute confidence that our required parking provisions kill housing,” he said.
“People now design their housing projects to the parking requirements, not to their housing needs. I think that’s a really backwards way to approach our housing situation in Banff.”
Several businesses and organizations wrote letters of support for Banff Caribou Property’s proposed bylaw amendment, including Pursuit, YWCA Banff, Banff Hospitality Collective, Discover Banff Tours and Banff and Lake Louise Tourism.
While supportive of the bylaw amendment, Mayor DiManno boldly wanted to take it even further to make the reduced parking requirements apply to all apartment housing community-wide, not just apartment housing for staff accommodation.
She said a previous bylaw introducing parking reductions to apartment housing – the infamous bylaw 380 – led to construction of 357 units while creation of a residential parking permit system has led to occupancy for 200 more cars within on-street parking during peak times.
“In the past 10 years, we’ve built 10 per cent of our housing stock, in large part, because we created a mechanism for reducing one of the most prohibitive elements of building apartment housing – parking,” she said.
“We are well underway with the community plan and the community social assessment but – and it’s a big but – this crisis is urgent and we will need to employ more than one tactic and strategy to make more momentum on any and all solutions.”
However, Coun. Chip Olver was successful in her amendment to reflect a vision more in line with MPC – to allow a reduction for employer-owned and managed housing.
“I know we have aspirations to be a less car dependent community, but if we open it up to any apartment housing – we heard today the longer people live here the more they are likely to be a car owner – and I don’t think we want to flood our streets with vehicles,” said Olver.
Olver lives on Muskrat Street, where she said there is simply not enough parking.
“During the daytime as our survey showed there is a vacancy, but at night-time there’s not,” she said.
DiManno argued that Oliver's pitch was still too limiting.
“We can’t speak out of both sides of our mouth, ‘we want to increase housing but we’ve got to make sure there’s a parking stall for every bedroom’, because we know that kills that. We can’t say we want to be environmental leaders but let’s still make sure there’s a spot for everybody’s GHG-emitting cars,” she said.
“We have finite land and we need to prioritize what we want to do with it and I think that’s very clear – it’s housing.”
Banff’s housing and parking policies will continue to be discussed at the June 12 meeting of the governance and finance committee. The proposed bylaw amendments associated with required parking will come back before council for first reading at a later date.
“Everything will come back to first reading, which triggers a public hearing to hear from the community,” said DiManno.
