Developers shun affordable housing

City told to stop incentives for homebuilders

A recent report to city council recommended Calgary give up offering developers incentives to provide affordable housing. The city currently allows developers to build at higher density than would normally be allowed in exchange for providing a public benefit. Options in this “density bonusing” program include developers footing the bill for a park Plus-15 bridge or even making a cash contribution to a general development fund.

The May 9 report from the Office of Land Servicing and Housing found that developers in Calgary love the bonus program except when it comes to the affordable housing incentive.

“To date there has never been any take-up of the affordable housing option” says the report.

Ald. Gael MacLeod says one of the reasons developers are reluctant to provide affordable homes in exchange for density allowances is they believe the presence of low-income residents will hurt profits.

“They feel that it will affect sales. And I find that patently offensive because if somebody has a lower income that doesn’t make them a bad neighbour” says MacLeod who is also chair of the Calgary Housing Company a city-owned corporation tasked with providing affordable housing. “We’ve seen the same thing with secondary suites with zoning and we see it all over the place…. I really rail against that sort of thinking because it stigmatizes people.”

Ald. Druh Farrell says the city must recognize developers want to make a profit but she does not agree the possibility of smaller profits should exempt them from providing attainable housing for all income levels.

“I think the more you integrate the mix of demographics within a development the less of an issue [the stigma of low-income residents] becomes” says Farrell.

Calgary builders are hardly hurting. In a separate report the city stated that at $608 million the estimated construction value of building permit applications for April 2012 is 75 per cent higher than the same month in 2011.

“We are currently seeing healthy levels of activity in both the residential and non-residential sectors” says Kevin Griffiths chief building official.

That includes more than 1000 new residential units 277 of which will be in a $45-million downtown residential building called Alura.

Farrell says another problem facing the city is its legal inability to compel developers to contribute.

“We have limited legislative ability to require affordable housing and we ask frequently but it doesn’t seem to be effective” Farrell says. She hopes with the creation of the city charters promised during the Progressive Conservative party’s recent campaign the city will receive power to legislate in these areas.

Finally Farrell also says she wants the federal Conservative government to restore funding for affordable housing which it withdrew.

“The gap is noticeable that our federal government does not provide funding for affordable housing.”

Calgary is not the only municipality in which the density bonus route for creating affordable housing is not working.

A committee formed in Edmonton in 2008 found that incentives to force housing companies to provide rental units at least 15 per cent below market value was not feasible and that affordable housing issues simply take a back seat to community desires for other amenities.

MacLeod says even if the bonusing option is scrapped the city must push harder to ensure appropriately priced housing is available to all Calgarians.

“It is disappointing. I understand the report and that developers are not picking up on the density bonusing in terms of affordable housing. But what that says to me is we need to come up with a better plan” says MacLeod.

“It costs society a small fortune to make social programs that don’t solve the problem. And that’s what we’re talking about here is how can we solve the problem? Housing is one piece and it’s a very important piece.”