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Why Calgary Is Split on Its Housing Affordability Recommendations

Is the task force’s most contentious suggestion worth the battle?

Ximena Gonzalez 16 Aug 2023The Tyee

Ximena González is a freelance writer and editor based in Calgary. Her work has appeared in the Globe and Mail and the Sprawl.

This summer, Calgary city council has been on a housing policy roller coaster — first rejecting and then bringing back for consideration the recommendations of the Housing and Affordability Task Force, an advisory group composed by 15 Calgarians, including non-profit housing providers, graduate students, city administration and others.

On June 6, Calgary city council voted against the recommendations put forward by the task force. The group had spent nine months listening to affordable housing providers, real estate developers, academics, and people with lived experience, creating six recommendations and 33 actions to increase the supply of housing and boost housing affordability.

Council’s decision caused an uproar that crossed political lines, driving councillors to reconsider their initial position. The day after the vote, a motion to bring the recommendations back to council for deliberation in September was put forward by Coun. Richard Pootmans. That motion passed 14 to one.

The primary reason for council’s dithering? Hesitation about broad rezoning that would allow a wider range of housing types, including rowhouses and secondary suites, through the implementation of a land-use district for ground-oriented housing across the entire city.

“Calgarians and Canadians are so concerned about housing because they’re so deeply invested in housing, which makes it very, very difficult to make the kinds of changes that are ultimately needed,” Coun. Jasmine Mian, said at the June 6 meeting.

The changes needed to ensure all Calgarians have access to housing, however, aren’t within the purview of the municipality — and without safeguards, the task force’s most contentious recommendation could backfire.

“The policy focus has been on increasing the supply,” says Byron Miller, a professor of urban studies at the University of Calgary. “But if you’ve got virtually unlimited demand out there for speculative investments, focusing on the supply is not going to solve the problem.”

If supply won’t solve this problem — what will?

Recommendations aimed at increasing housing supply

“I don’t think people understand how precarious it can be being a renter in Calgary,” says Alison Grittner, a member of the task force. “Living in sub-standard conditions, taking up 60 to 70 per cent of your income — and you’re always on the precipice of being unhoused.”

According to the latest national census, over a third of renters in Calgary pay more than 30 per cent of their income in rent, but as vacancy rates have plunged, this number has likely increased. In October 2022, when the Canada Mortgage and Housing Corp. recorded a rental vacancy rate of 2.6 per cent, the average asking rent for units listed on RentFaster was just under $2,100 — in early August, this amount was $300 higher, and vacant units scarcer.

For this reason, the task force’s recommendations focused on policy changes that would increase the supply of housing across the continuum, including the construction of 3,000 non-market units every year.

Due to the urgency of the situation, the recommendations put forward by the task force all fall within municipal jurisdiction, Grittner said.

To ensure Calgarians have access to safe, stable housing that doesn’t cost more than 30 per cent of their household income, the actions recommended include policy changes to increase density across the city (blanket upzoning), leveraging city-owned land for affordable housing and lobbying senior levels of government for increased funding for non-market housing.

According to Grittner, zoning is a major barrier to building more housing in Calgary.

“One of the things that we heard, and not just from developers, but from affordable housing providers and non-profits, was that the planning process and general nimbyism in Calgary is so problematic it holds up the development process for affordable housing,” she says. “Doing the blanket rezoning was just one way to shorten that.”

Changing residential zoning to allow for the construction of row houses and backyard suites alongside detached and semi-detached homes is potentially the most consequential recommendation. This zoning conversion would not only increase the number of units allowed per lot, bringing down the price of a single unit, but end the time-consuming and costly rezoning process cost savings that could be then transferred by developers to buyers or renters.

“Through rezoning we can make it easier to add new homes across the city — including singles, duplexes, triplexes, backyard suites and rowhouses,” a city spokesperson told The Tyee in a statement. “Although the change will happen over time, as landowners redevelop, rezoning will eventually allow for Calgarians to have choice about which neighbourhood best suits their needs according to life circumstances.”

However, like elsewhere in Canada, enabling increased density in Calgary’s established neighbourhoods is a politically charged decision. And making the endorsement of an entire set of recommendations contingent on a single, contentious issue may seem like a naive move by the task force — especially after the turmoil caused by the announcement of a similar policy in Edmonton last November.

“It’s a question of which political battles are worth fighting; which ones you’re likely to win; and which ones might unnecessarily or for very limited benefit antagonize a lot of people,” Miller says, adding that it’s unclear if the proposed rezoning is worth the public pushback it will generate.

“You could put a lot more supply in the market, and it would be gobbled up by speculative buyers from elsewhere, and that would not solve the problem.”

The ins and outs of upzoning and affordability

Restrictive zoning frameworks that limit density and housing types in residential neighbourhoods are one of the many causes of housing woes cities across Canada.

Facilitating the construction of an increased number of homes is key to stabilize housing costs, says Carolyn Whitzman, an adjunct professor and housing policy researcher at the University of Ottawa.

“We need to stop faffing around with zoning and just get real about it. Because as long as we rely on private development, we need to have a lot supply,” she says.

In Calgary, 56 per cent of residential parcels assessed in the 2023 tax roll are zoned for detached and semi-detached dwellings.

Broad rezoning would release some of the pressure on the city’s housing market and “facilitate better market affordability as well as non-market housing supply,” the city said in a statement, noting that broad rezoning can enable up to 2,000 additional units per year. (Tim Ward, manager of housing solutions at the City of Calgary, and chair of the task force, wasn’t available for an interview.)

But some argue that upzoning alone is unlikely to meet such an ambitious goal.

“There’s a lot of research [showing] that just increasing supply leads to gentrification,” Grittner says. “And it does not actually lead to more units of affordable housing.”

A case in point is that despite the completion of roughly 20,000 purpose-built rental units in the last decade, a record number, data compiled by the University of British Columbia’s Housing Assessment Resource Tool shows a shortfall of over 50,000 units in Calgary for households that can’t afford to spend more than $1,980 per month in rent. By contrast, the deficit of homes deemed affordable for upper income households is zero.

“We absolutely have a supply shortage in Canada. It’s an affordable supply shortage,” says Whitzman, who presented her insights at a task force meeting, pointing at the need to build more homes at the affordability levels households in core housing need.

Since 2004, fewer than 3,000 social and affordable housing units have been built in Calgary, according to CMHC data.

As long as we rely on the private market to provide housing for 97 per cent of households, Whitzman says, “we need to think about what we can do to bring private market costs down.”

Attempting to produce affordable housing within the confines of market-driven policies can be a risky endeavour, some experts warn.

“When you designate land for higher density development, you increase the value of that land,” Miller says. “So the question is, who benefits from this public redesignation of land? Is it going to be the public, or is it going to be private landowners?”

According to Miller, who also presented his work to the task force, implementing land-value capture mechanisms, such as land-transfer taxes and density bonuses, is necessary to ensure that the additional value created by allowing more density is used to fund housing lower income households can afford. But such a measure is absent from the task force recommendations.

“We know that we don’t have adequate funding for the amount of non-market housing that we need,” he says. “To ignore land value capture at a time when we’re creating tremendous increases in land value just makes no sense.”

Losing ‘naturally occurring’ affordable housing

In the long-term, rezoning for higher densities can create enough housing supply so that the cost of older units is within reach of low- and moderate-income households. This process, known as filtering creates what’s often referred to as naturally occurring affordable housing.

But filtering takes time — if it happens at all.

Despite the completion of a record number of purpose-built rentals since 2012, Calgary’s rental universe has only increased by 14,500 units in the last decade — a gap of 4,500 units evidences the loss of older, more affordable rental units.

According to CMHC data, the number of rentals built prior to 1999, many of which provide affordable housing to households in the lowest income quintile, has decreased by two per cent, resulting in a significant drop in vacancy for units rented at $1,000 or less. As a result, only five per cent of all rental units in Calgary are within reach of households in the lowest income bracket.

Researchers have attributed the loss to redevelopment and financialization.

“There seems to be this sort of general sense that the way you solve the housing affordability problem is to flood the market with new supply,” Miller says. “But they’re not talking about the source of demand — and the source of demand has become increasingly decoupled from local markets.”

Although Grittner says that preventing the loss of naturally occurring affordable housing was discussed by the task force, addressing this issue was ultimately left out of the recommendations, as the city lacks the organizational capacity to implement such measures.

“The way that the housing sector is set up in Calgary and Alberta, we don’t have that overarching organization that can do that,” she says. “Because it’s not just about buying, it’s about all the things that go into operating a rental property.”

Maya Kambeitz, also a member of the housing and affordability task force and executive director of Norfolk Housing Association, a non-profit social enterprise that operates affordable housing using a mixed-income model, said the primary barrier to increasing its acquisitions is funding.

“It is challenging to finance an acquisition because there are no significant grants or programs through the National Housing Strategy that make it viable for non-profits to acquire,” she says. “The province also has no preservation or acquisition funding, and municipalities have very little if any legislative capacity to address acquisition and preservation.”

While the City of Calgary has the powers required to enable densification and redevelopment in established neighbourhoods, it has few resources available to prevent the loss of naturally occurring affordable housing; or to ensure a portion of the new supply created is within the reach of lower- and moderate-income households.

“We have to put some kind of quota tied to more social housing units,” Grittner says. “Because otherwise we’re just putting a Band-Aid with one hand on what the other hand is creating.”

One of the actions recommended by the task force is to require that 15 per cent of housing units be non-market affordable housing in redeveloping neighbourhoods, a policy known as inclusionary zoning.

But the mechanisms to enact this are unclear, as the province removed the capacity of cities to enact inclusionary zoning earlier this year, after a successful lobbying effort carried out by BILD Alberta, an association that represents the interests of home builders and developers.

“So much of what the city as a municipality can do is connected to the other levels of government,” Kambeitz says. “There are legislative barriers, operating realities, limited resources and competing priorities. I firmly believe that the reason the solutions to the crisis become complex is because we fundamentally lack alignment in vision about a housing system that is integrated and affected by all three levels of government.”

National solutions for a national crisis

When the recommendations return to council in September, councillors will face a tough choice: potentially risking their jobs to endorse a set of actions that’s unlikely to effectively address the core of the issue without significant support from senior levels of government, or delay action again.

“The real issue around housing affordability across Canada is one of financialization and neoliberal policies,” Grittner says, emphasizing that the market won’t solve the housing crisis, because “it’s capitalism that created these issues, so you can’t come at it through a capitalist solution. You can’t look to developers to solve this problem.”

But city administration remains positive.

“There will be short-term benefit to lower and moderately income Calgarians through rezoning,” a city spokesperson said in a statement. “Lower regulatory risk to redevelop in more moderate-income neighbourhoods will attract more redevelopment investment, as well as an increased supply of secondary suites, and benefit lower and moderate income households.” (Creating mechanisms to ensure secondary suites aren’t lost to the short-term rental market is not part of the 33 actions put forward by the task force.)

If Calgary is to follow the steps of other cities, however, zoning reform won’t happen quickly enough to address the current crisis — some have been calling for it since the 1980s — nor will the construction of new housing begin swiftly, as developers continue to face challenges related to labour shortages and rising financing costs.

Ultimately, to reach the affordability levels required by low- and moderate-income Calgarians and produce 3,000 affordable units per year, the target set by the task force, support from senior levels of government is paramount.

“The easiest way to [address] the housing crisis in Canada is for the Canadian government to do something,” Whitzman says, noting that to take the pressure off local politicians, the federal government should step in on zoning reform, and require non-market housing targets.

“It simply doesn’t make constitutional, or legal, or any sense to rely as much as we have in Canada on municipalities who have the fewest sources of revenue, and have the fewest powers,” she says. “It’s a national housing crisis, so it demands national actions.”  [Tyee]

Read more: Alberta, Housing

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