CANMORE – A soon-to-be constructed purpose-built rental unit was given a break on municipal property taxes to ensure the majority of units would be for Canmore residents.
Canmore council approved a 75 per cent reduction in municipal property taxes for a 10-year period at a 59-unit mixed-use building at 900 Railway Avenue in exchange for 95 per cent of units being specifically for Canmore residents and allowing the developer to access $500,000 in funding from Canada Mortgage and Housing Corporation (CMHC).
With few rental buildings springing up in Canmore, the majority of council expressed concerns but highlighted the trade-off was needed in adding to the community’s rental inventory.
“There is some incentive needed for the private market to (create rental units) in greater volume than we’ve seen to date in order to meet the need of our community,” said Mayor Sean Krausert. “Given that some incentive is likely needed and given that we have somebody who’s indicated their plan becomes more tenuous if they aren’t able to get some support through a tax exemption, I don’t think it’s reckless given the numbers involved.”
The last three rental buildings – Vue Canmore, Rundle House and Boardwalk – were supported by council with incentives, noted Coun. Tanya Foubert. Prior to that, she highlighted, the last rental buildings constructed were roughly 40 years ago on 10th Street between 7 and 8 avenues.
The lack of rental housing led to CMHC rental reports for Canmore being “statistically irrelevant because we didn’t even have enough purpose-built rental for them to calculate our average rental rates,” she said.
Coun. Karen Marra added she was comfortable giving support since the rental units being added would be a long-term benefit to the community.
“This is the developer getting some of what they want or 75 per cent of what they want and it shows we’re working with our developers but also being responsible to our residents.”
Coun. Jeff Hilstad echoed Marra – though noted he struggled with parts of it – with the badly needed rental units helping local residents.
“We don’t have a lot of purpose-built rentals, so that is a benefit to our community,” he said. “Do I still worry market forces at play will make it more luxury-type units and more expensive than it might need to be? Again, we don’t have control over that, so that is something in the back of my mind.”
The 75 per cent reduction in municipal property taxes for 10 years wouldn’t impact the property’s education tax aspect and is expected to have an estimated break of $17,250. If the building were to convert from the rental market, the municipal property tax break would end while an annual report on residents would be provided to council.
Yossi Fixler, principal of GF MGMT Corporation and representative for the development, had asked for full municipal property tax exemption prior to council amending it to 75 per cent.
Fixler added a similar compromise was made with Vue Canmore on Kananaskis Way – which he was involved in – and has unit rental rates remain 10 per cent below market rate for a 10-year period.
He said that with inflation and interest rates adding increased costs and reduced profitability, it can reduce the likelihood of landowners developing rental units when condos are better for profit.
“We take a more holistic approach to development. We’re not solely profit-driven – we do have a profit requirement and a threshold we need to meet – but it’s not all that we look at when we develop,” Fixler said.
“We’re fortunate to have investors that are like-minded in this way. Our key investors were born and raised in Canmore and are prepared to make a long-term investment in exchange for what would otherwise be short-term gain, but with the challenges we face and the economics of the project we’re here to ask for this exemption.”
A letter to council stated they intend to begin building in the spring, with 48 one-bedroom and 11 two-bedroom units. The main floor will have commercial space and is expected to increase Canmore’s rental inventory by 12 per cent, according to the letter.
“We hope this can be a signal to rental developers that this is something Canmore will prioritize going forward. … We’d like to see the viability improve over time, so there can be a sufficient number of apartments and eventually stabilize those rates,” Fixler said.
The lone vote in opposition was Coun. Wade Graham, who expressed concern about having the decision be asked and decided at the same meeting, due to it leading to a potential $250,000 in fewer property taxes collected over the next decade.
“I want this council to be bold. I don’t want it to be reckless. … This project, I believe, is going forward with or without this decision,” he said.
“I really struggle with delegations coming here and asking for a $250,000 decision in a few hours from us. I don’t think that’s fair. It’s not fair to us. It’s not fair to the taxpayers that are going to subsidize this at the end of the day. If we had fulsome thought and conversation, I could support those ideas but I’m struggling with the process of how we’re doing this right now.”
Coun. Joanna McCallum took offence to Graham’s statement, saying it was a “hyperbolic statement meant to incite emotion” and that the ask would expand rental housing for locals.
“It provides us with rental capacity in our community. … If you can’t buy, your only other option is to rent or leave. This provides the opportunity for people who can rent, to rent and provides capacity for council or other housing partners to start building the housing that we need for lower-income people. … There’s nothing irresponsible with this motion,” she said, noting a two-thirds majority of council had approved suspending its procedural bylaw to make a decision from a delegation at the same meeting.
Graham cautioned that council had received more advanced information for when it incentivized those purpose-built rental units, which drew a point of order from McCallum.
“The more rules we put in place, the less viable it is for them to move forward. … I can have some of what I want or none of what I want and I choose some,” she said.
