CANMORE – A new policy to incentivize purpose-built rentals is in place for Canmore.
Town council approved the new policy at its Tuesday (Jan. 7) meeting after it was a recommendation of the Livability Task Force to tackle housing challenges in the mountain community.
The policy is designed to offer developers an incentive to potentially construct more purpose-built rentals in the community, while also supporting long-term and permanent residents with housing options.
“This is an example of a policy change, which I think are some of the most significant things we can do as a municipal government to encourage and see in our community the private sector deliver what we need as a community,” said Coun. Tanya Foubert. “This is one of the levers that we can pull that will directly result in more rental housing getting built in our community.”
Any purpose-built rentals would receive up to a 75 per cent grant in municipal property taxes for up to 10 years. In exchange, a developer would have a minimum of 95 per cent of the units be for permanent Canmore residents and provide an annual report with information that it was rented by long-term residents.
Mayor Sean Krausert said the finance committee would discuss using the new livability tax fund – set to be collected under Canmore’s new vacancy tax – at Thursday’s (Jan. 9) finance committee meeting.
He noted with the high cost of land in Canmore, the incentive-based policy could lead to the private sector building more rental units.
“I see this helping the market work. … We should still let the market determine what they want to build,” he said, “but I like the ‘here’s a tax incentive and if you’d like to apply for it, here’s the terms.’”
Town staff told council either a tax rebate or a grant program were the two best options.
A tax rebate would have council annually pass a motion to rebate a specific amount of municipal taxes for each property. It would be done after the tax rates are set.
The grant option would be paid out as per the policy without further council direction unless the policy is changed.
Town staff recommended the grant option beacause it is administratively easier and it is paid when a property’s eligibility is confirmed.
“Consistent with the livability tax program, we’ve built in annual reporting, so council and the public will be able to see what impact these programs are having on the housing crisis and also how programs might need to be tweaked or adjusted to be more effective in future years,” said Therese Rogers, the Town’s general manager of corporate services.
“This isn’t about developing additional short-term rental inventory. It’s meant to provide housing long-term for primary residents.”
As part of the program, an annual report has to be submitted within 30 days of calendar year- end along with supporting documents to show the set number of units for Canmore residents is being achieved.
The grant would start when the occupancy certificate is issued – meaning the building complete – rather than at the development permit when construction moves ahead. The construction value would also have to be more than $300,000 and have purpose-built rental units of three or more new units.
Rogers said they looked at whether Canmore Community Housing (CCH) was eligible – given plans for four- and six-storey rental-based projects in the Palliser area – but a provincial change in tax structure made it a moot point. Changes in legislation, which came into effect Jan. 1, 2025, have all property designated affordable housing exempt from property taxes.
In 2023, council approved a similar method for a 59-unit mixed-use building at 900 Railway Ave.that is now under construction.
Yossi Fixler, principal of GF MGMT Corporation and representing the development, asked for the entirety of the municipal property tax to be exempted with council approving 75 per cent for 10 years.
As part of the deal, an annual report on residents renting units would be provided to council and 95 per cent of the units would be specifically for Canmore residents. If the property were to convert from rental use, the municipal property taxes would become due. The property annually contributes about $23,000 in municipal taxes.
The trade-off allowed the developer to apply for access to $500,000 in funding from the Canada Mortgage and Housing Corporation (CMHC).
“We felt that modelling a policy after that agreement that is in place made a lot of sense because the research we did then continues to apply now,” Rogers said.
The federal government has pursued multiple policies related to purpose-built rentals. Earlier in 2024, it offered a 100 per cent rebate of GST or the federal portion of HST on new purpose-built rental housing. The Ontario, Nova Scotia, Prince Edward Island and Newfoundland and Labrador governments also mirrored the federal policy.
CMHC also offers low-cost financing through the Apartment Construction Loan Program to support purpose-built rentals and MLI Select, a loan insurance product for multi-family developers.
The National Housing Council’s review panel of financialization of purpose-built rental housing released its 33-page report last May. It recommended the federal housing ministry incentivize the development of new affordable rental housing, protect existing affordable rental units, create housing supports for tenants facing housing concerns and establish a non-market rental housing plan to manage and distribute federal funding to increase affordable rental housing.
In a Sept. 23, 2024 response, which was tabled in parliament in October, then federal housing minister Sean Fraser noted removing regulatory and zoning restrictions will help the building of home and rental properties. He noted it was important for both the public and private sectors to work together.
“While I note the panel’s recommendation to reserve government funding and financing for existing purpose-built rentals for the non-profit or public sector, I also recognize the expertise, capacity, and the scale of the investment that the private sector is positioned to contribute to addressing this housing crisis,” he wrote. “No one player alone can address this crisis. All sectors have a key part to play in ensuring everyone has a safe and affordable place to call home.”
Three Canmore rental buildings – Vue Canmore, Rundle House and Boardwalk – before the Railway Avenue project all received incentives from council. Those projects added 450 units and more than 600 bedrooms, which make up a large amount of Canmore’s specific rental base.
Prior to those buildings, Canmore went multiple decades without a purpose-built rental property being constructed.
While CCH is in the midst of planning for four- and six-storey purpose-built rentals as part of the Palliser Trail area structure plan (ASP) – which is anticipated to add 144 rental units – the private sector has largely focused on building residential homes and condos instead of rental units.
“No market purpose-built rental has been built in Canmore in at least the last 30 years, perhaps 40, without some form of variance or accommodation in order to make the economics work,” said Krausert. “We’ve seen this in variances to height, variances to parking and variances to taxation. We’re dealing with the height and parking issues through other mechanisms such as the Palliser ASP, what will be coming forward with the downtown Canmore [area redevelopment plan] and that’ll also be dealt with, I’m sure, on a case-by-case basis.
“However, the tax piece is something we can deal with through this policy. It does have a compounding effect that allows the applicants to have a better financial footing when they go to seek financing.”
