How the next Calgary City Council can boost the housing supply and increase affordability

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Appeared in the Calgary Herald, October 28, 2017
How the next Calgary City Council can boost the housing supply and increase affordability

Calgary Mayor Naheed Nenshi won a third term earlier this month, giving him four more years to address the city’s most pressing issues—including housing.

Many Calgarians worry about affordability as the city continues to grow. Among the policy choices available to the mayor and council, three in particular would boost the housing supply.

First, it’s time to deal with secondary suites—rental units built into existing homes (such as basement suites). The issue has dogged city council for years, as arcane regulations have forced homeowners to beg city council for permission to build secondary suites. While some level of housing safety regulations is obviously important, it’s unclear why someone should be prohibited from building a secondary suite to house an ageing family member or earn some extra income to help pay their mortgage.

Moreover, since secondary suites can cost less than a new apartment unit, they can be valuable sources of low-cost housing for city residents. For years, Mayor Nenshi and some city councillors have tried to streamline the approval process for rental units in homes, but the issue has divided city council. It’s time for the legislative gridlock to end.

Second, the city can relax minimum parking requirements. Calgary, like most North American cities, requires developers to provide a minimum number of parking spaces for each new housing unit. This can add thousands—or even tens of thousands—of dollars to the cost of building a single new apartment unit. This is especially perverse in neighbourhoods where many residents don’t need (or can’t afford) to own cars. Fortunately, Mayor Nenshi and company can look to the N3 building in East Village, which was exempted entirely from providing parking for residents, for a success story to copy.

Third, and most challenging, city hall can shorten approval timelines for building permits. According to Fraser Institute research, it takes more than a year (13.5 months, on average) for homebuilders to obtain permits—five months more than in Cochrane and six months more than in Airdrie.

Relatively high levels of uncertainty about exactly how long it will take to obtain permits aggravate these timelines. In fact, according to a survey of homebuilders operating in the Calgary-Edmonton Corridor, timeline uncertainty for building permit approval is far stronger in Calgary than in Edmonton, where no meaningful uncertainty is reported.

Unlike the first two proposals, which are easy wins, shortening approval timelines and reducing uncertainty will likely require more challenging and nuanced reforms. But Calgary can learn from other municipalities in the Calgary-Edmonton Corridor, and in the rest of the country. Identifying and implementing best practices from other municipalities can help reduce the uncertainty and duration of the permitting process.

Much remains to be done to meaningfully boost the housing supply in Calgary, but the good news is that city hall has tools at its disposal. With a fresh mandate, and a demonstrated need to accommodate persistent population growth, Mayor Nenshi and Calgary City Council can do three things if they’re interested in increasing affordability for Calgarians and their families: fast-track secondary suite approvals, reduce or remove minimum parking requirements on new housing, and shorten and streamline building permit approval timelines.