Calgary, like all Canadian cities, has a housing crisis. But let’s be more specific. There are two housing sectors - market and public (non- market) housing.

While some homeowners with mortgages are struggling with increased mortgage rates, the real crisis is the lack of public rental housing for low income and special needs citizens. And it has been around for decades but has been ignored until it started impacting the market housing costs and escalating rents for the “average” citizen.

The City of Calgary estimated back in 2018 there were 81,000 households needing public housing and the need was project to rise to 100,000 by 2025. The City currently has only 45,000 public housing homes; this means 36,000 Calgary households are faced with paying marketing housing costs they can’t afford and that number is growing quickly.

Editor Note: An edited version of this blog was published in the Calgary Herald’s NEW HOMES + CONDOS on January 27, 2024.

The City’s new seven-year Housing Strategy is very ambitious, but it is “too little, too late.” It is not enough to solve the housing crisis for the 750 people living on the streets (living rough), the 3,000 living in shelters and the 35,000+ of households struggling to pay for housing and put food on the table. They can’t wait three to seven or more years for an affordable, safe place to live, but I am afraid they will have to as relief is years away.

The federal government’s recent announcement that Calgary will be receiving $228 million over the next three years. This sounds like a lot, but at $300,000 per home that equates to only 760 new homes (or about 250 per year) starting in 2026. Hardly a drop in the bucket. Again, too little, too late!

The total cost of addressing Calgary’s shortage of low income housing is closer to 10 billion (35,000 times $300,000/home). Correcting Calgary’s housing supply and demand crisis complex and going to be expensive. Let’s take a deep dive into it.

The Calgary Drop-In Centre is one of the largest homeless shelters in North America. Unfortunately, the conditions have people sleeping on mats on the floor, no private space, with the lights on for security reasons. It is inhumane. Today it is surround by tents that are the homes of Calgarians sleeping rough on the street. How we care for the homeless has changed significantly in the 25 years since it opened. **It is time to rethink warehousing Calgary’s homeless in this large building!**

Linking Vision to Reality

Every city needs a spectrum of housing types to meet the diverse needs of its citizens ie. homeless, emergency, transitional, supportive, public rental, market rental and homeownership. In an ideal world, the amount of each housing type would match the demographics of the city, but that RARELY happens.

Affordable housing must be linked to income i.e. rents must be 30% of income not 80% of market rents.

Matthew Sheldrake, City of Calgary Growth Strategy Manager, posted on X (formerly Twitter) that from 2007 to 2019, Calgary averaged 2.4 new people per housing start which on the surface, looks like the new supply of housing met demand. But did it?

Did the supply meet the demand for low income housing for special needs, fixed and low income Calgarians? Another City of Calgary report indicated since 2011 the average number of new public housing homes built was only 308 per year, which obviously didn’t meet the demand for low income housing because 36,000 Calgary households are currently paying more than they can afford for housing and thousands of other are living on the street and in shelters.

Sheldrake also noted in 2022, Calgary’s population growth jumped by 55,200 (from a more typical 15,000 to 20,000 annual growth rate) which created an immediate demand for 23,000 new homes or about 8,000 more than the 14,767 housing starts that year, (which, by the way, was a record number of starts), but it will take one to three years for them to come on the market. Furthermore, less than 1,000 of those starts were public housing.

Unfortunately, there is no way Calgary’s home builders and the City could approve and build 8,000 more homes on such short notice. It will take several years to absorb the 2022 population increase. And if growth continues at the 2022 and 2023, rate we may never catch-up.

History has shown new housing starts RARELY keep up with the need for public housing.

It is not enough to just have the TOTAL number of housing starts match growth. We also need to have the RIGHT supply to meet the demand of an ever-changing population; this is critical to creating a HEALTHY supply of housing for everyone.

Calgary’s Public Housing Shortage

Currently only 3.6% of Calgary’s housing inventory is public housing (i.e., housing owned by government or not-for-profits that is rented at 30% of household income), the average in Canada’s major cities is 6%.

Many were hoping that office to residential conversions in downtown Calgary that received a $75/sf subsidy from the city would create more affordable housing, but in reality some will rent at 20% below market rents, but not linked to 30% of income.

Calgary’s (and Canada’s) public housing shortage began in the ‘80s when the Federal government stopped funding public housing projects while the country’s population continued to grow especially in cities.

Given Calgary has been Canada’s fastest growing city for the past 30 years, it is not surprising our public housing inventory is significantly less relative to the other major cities.

Let’s take a closer look. Calgary’s population in 1981 was 626,000; today, it is more than double that. As a result, Calgary has half the public housing it needs to support its current population. This is substantiated by the fact Calgary has around 45,000 public housing homes but needs 81,000 (City of Calgary website.)

The current public housing crisis has also been further exasperated by the federal government’s decision to significantly increase immigration starting in 2022, before increasing public housing. This despite knowing many new immigrants will need low rent housing before they find jobs and upgrade skills needed to get well-paying jobs.

Calgary is currently experiencing a record population increase from new immigrants from outside the country given our relatively affordable housing costs compared to Vancouver and Toronto (probably their first choice), good job opportunities, high average wages (relative to housing costs) and a good quality of life.

Now let’s dig a little deeper into Calgary’s complex and unique housing culture.

Home ownership dominates

Calgary is a unique city as about 70% of its households are homeowners, the highest of Canada’s major cities and much higher than most cities around the world. When it come to housing, Calgary has always focused on market housing, until recently.

With the average Calgarian having $122,000 equity in their home, most homeowners are not in a housing crisis. Yes, their mortgage payments have been increasing and maybe some can’t move up as they had hoped to, or even downsize, but most Calgary homeowners are not in a housing crisis.

Calgary needs more innovative programs that place tiny housing on City owned vacant land like this project.

As a result of the dominance of homeownership in Calgary, the city’s market rental construction has lagged other major cities for decades as the demand simply wasn’t there. Calgarians love home ownership and until recently the majority could afford a single family home.

However, that has been changing over the past 10 years - with 2022 being a record year for purpose-built rental and multi-family housing starts in Calgary (Canada Mortgage & Housing Corporation, Housing Report 2023).

Even with the increased rental starts, Calgarians have experienced the highest percentage rental increases in Canada - in part due to the already identified huge increase in people moving to Calgary from around the world who are looking to rent before they buy. Add the fact those who had hoped to become homeowners had to remain renters as they couldn’t qualify for mortgages at the higher interest rates.

This unexpected and significant increase in demand for market rental housing has resulted in hardship particularly for students, refugees, previous immigrants and seniors on fixed income all competing for a limited supply of low rent homes.

As for new rental housing (homes and apartments) built by private developers, they are never affordable for those on a low or fixed income, as new construction is expensive. This means the landlord need higher rents to cover their increased construction and financing costs (higher interest rates impact developers also). Remember the rental landlord also has a mortgage to pay that is impacted by higher interest rates.

Even if developers of new rentals promise to offer homes for 80% of the market value, that unfortunately doesn’t make them affordable for the single parent with two kids with a low income. For example, a two bedroom apartment at 80% of the $2,000 per month market rate is still $1,600/month rent. A parent earning $4,000/month can only afford $1,200 per month (i.e. 30% of income).

FYI: Historically, the lower rental market is in apartment buildings and houses that are 20+ years old. However, when rental homes and apartments are in short supply, their rents also increase, creating a shortage of low rental homes. Furthermore, these older buildings and homes have also been decreasing in supply with new infill projects often demolishing them for new expensive infill homes.

Gonzalez is correct, that while many politicians and planners are telling Calgarians we need to rezone the entire city to allow for more density as a means of creating more affordable housing in established neighbourhood, in reality it will not significantly increase public housing for the special needs and low-income individuals and family.

Special Needs Housing History

Over the past 25 years, various attempts have been made to try to address the need for more affordable public housing in Calgary - all with limited success.

The Province built Murdoch Manor and King Tower in East Village in the ‘70s for low income seniors, but stopped shortly there after.

Back in 1998, various Calgary agencies came together along with the Province to create the Calgary Homeless Foundation to help address the needs of the city’s growing homeless population. While the Foundation has successfully implemented many projects and initiatives, the need for more housing and care continues to grow faster than the Foundation can implement.

Then in 2008, various non-market housing agencies and the development community launched the 10 year plan to End Homelessness in Calgary with the goal of creating 11,000 affordable and specialized homes. This resulted in the RESOLVE campaign where 9 different non-profit housing providers were joined by the Calgary’s residential developers to raise $75 million from the private sector.

Then in 2018, five Calgary not-for-profit housing agencies formed the Calgary Affordable Housing Foundation was formed in 2018 to work together to use the $75M as seed money to build affordable housing to meet the diverse needs of Calgarians.

Since then, agencies like HomeSpace and Onward Homes have been working flat out to build more public housing, but it is too little, too late.

Today it is managed by Trinity Place Foundation of Alberta which has a diverse portfolio of affordable homes concentrated in the City Centre.

Facing Reality

The City of Calgary’s current 7-year Housing Strategy Plan calls for an increase of 4,000 new home starts annually from current levels – i.e. 3,000 non-market and 1,000 market homes. The problem is 2022 and 2023 have been record years with almost 15,000 housing starts. We are currently building at or near capacity. It is unrealistic to expect we can increase housing starts by 25% quickly.

The biggest barrier to building more homes is labour shortage - not zoning and/or approvals. Calgary’s Construction Association is on record as saying Calgary has a labour shortage of 2,500 to 4,000 construction workers – even at the lower end, this is huge.

While some Calgary newcomers have much needed construction skills and SAIT is ramping up its construction training programs, it will take years to increase the labour force sufficient to increase the completion of new homes annually by 25%.

Currently there are 22 “shovel ready” public new housing projects in Calgary representing 1,807 homes, and the City is also “HOPING” to purchase 3,300 existing homes over the next 3 years for a total of 5,100 new public homes by 2026.

But the City has also indicated there will be a 19,000 more households in need of public housing by 2025 and even more by 2026, so the 5,100 new public housing homes over the next 3 years won’t keep up with the increased demand, let alone deal with the backlog.

Another way to look at it is: “How realistic is it to think at a time when home builders are operating at capacity and there is a labour shortage that we can increase the construction of public housing by almost 10-fold annually i.e., from the 308/year achieved over the previous 10+ years to 3,000/year over the next seven?” So, I am afraid the situation is going to get far worse even with the new Housing Plan.

Missed Opportunities

I am left to wonder why the huge surface parking lot owned by the Province next to Unison at Kerby Centre and an LRT station has sat empty for 30+ years when it could have become a much needed mixed market/public housing project.

Why too didn’t the City utilize the land next to the Westbrook LRT station for mixed market/public housing rather than selling it to a developer who has sat on it since 2016. Wouldn’t this have been a great project for Calgary Municipal Land Corporation to tackle, more than the BMO Centre expansion and new arena?

And why hasn’t the City and Province come up with a plan to utilize the old Greyhound building as a temporary housing site for those in need of immediate housing?

In the Fall of 2023, the City of Calgary announced they have sold three sites to affordable housing agencies at below market prices that will create 100 new public housing homes 3 years from now. This is great, but the City will have to make 30 of these announcements each year for the next 7 years (every second week) to achieve their goal of 3,000 new public housing starts annually. It is already behind.

In Jan 2024, the City announced it would look at housing next to the Franklin LRT Station on the NE leg of the LRT, but why not Whitehorn and Marlborough Mall stations which offer more amenities and have huge unused surface parking lot. And why wasn’t this done years ago. Perhaps an incentive program like the downtown “office to residential” conversions for “parking lot to residential” conversions would be cost-effective across the city.

This City owned Sunnyside block next to the LRT station, Safeway and school has been ear-marked for a residential development with affordable housing for decades. Why hasn’t the city acted on this opportunity?

Last Word

While it is encouraging all three levels of government are currently working on ways to address Calgary’s housing shortages, in association with the Building Industry and Land Development Association Calgary Region (BILDCR) and numerous non-for-profit housing agencies I am afraid it is “too little too late.”

I really hope I am wrong.

New Housing Initiatives: Too Little Too Late!