Banff politicians have taken the next step forward toward developing below market rental housing in the tourist town.
On Monday (Feb. 8), council voted 5-1 to approve a bylaw to borrow $965,000 over 30 years to buy land from Parks Canada on Deer Street and Cave Avenue and to do preliminary engineering and design work to build multi-unit rental housing there.
Town of Banff administrators stressed the housing projects will not be funded by taxpayers, saying the rent collected from the housing developments will be used to cover operational costs and pay back the debt, including costs incurred in the short-term.
Officials say they will go out to public tender to determine costs of the project once the scope of the project is determined, noting the land deal with Parks Canada won’t be finalized until they know the housing projects are viable.
“We’ll determine whether or not we have a sustainable project, and by sustainable I mean a project that will not require taxpayer support,” said Robert Earl, Banff’s town manager.
“Because of the deep discount that Parks Canada has given us, we have a high degree of confidence we can bring forward a project that will not cost the taxpayer money.”
The Town of Banff wants to build a total of 100 rental units by 2018 to deal with the housing shortfall, given studies estimate the shortfall to be anywhere between 450 and 700 housing units by 2022.
The cost of the lots on Deer and Cave, which had a market value of $6.7 million, was $550,001. The Town’s share of demolition costs for existing buildings is about $250,000 and pre-engineering and pre-design work will make up the balance of the $965,000 to be borrowed.
Resident Leslie Taylor, who was chair of the Banff community housing steering committee, voiced support at Monday’s meeting for the borrowing bylaw, saying it is the first step in moving forward with much-needed rental housing.
“I’m comfortably housed, but I meet people every day who are not, and they are the pillars of our community, and they deserve our help,” said Taylor, a former Banff mayor and town councillor.
Banff’s community housing strategy showed a lack of affordable rental housing was Banff’s most pressing housing issue, with many people such as young service industry staff struggling to find adequate housing in town.
Taylor said Banff’s rental vacancy rates have been at zero for the past several years, noting a healthy vacancy rate is considered to be between three and five per cent.
“We are at zero, and as a result, one of the key recommendations of the housing strategy for the next few years while we are in that situation should be concentrating on the provision of rental housing,” she said.
“The rental situation, we felt, was dire and continues to be.”
Lori Dowling, another longtime Banff resident, raised concerns about taxpayers being on the hook for housing, and asked council to rescind the housing levy that currently appears on residents’ tax bills.
The housing levy funds the part time position and work of the housing sustainability coordinator, and the amount is approved by council every year. This year, the amount is $89,638 and it will work out to about $5 to $8 a year for the average residential taxpayer.
“I certainly have no problem with affordable housing as long as council can reassure me that the taxpayers are not going to be on the hook for it,” said Dowling.
“If we’re not on the hook for it, would council reconsider rescinding and getting rid of the housing levy that we are currently paying as part of the tax bill? Because that certainly indicates to me that we are on the hook for it.”
Resident Jon Whelan raised several concerns with the current deal, saying Parks Canada should sell each of the two parcels to the municipality for $1 each because he believes the federal agency should be making a bigger contribution to help resolve housing problems.
He also said half of the apartments should be made available for sale at below market prices and suggested alternative sources of funding for the construction of housing units should be considered, such as using a portion of the hotel pillow tax.
Whelan also raised concerns that borrowing $965,000 could put the Town of Banff close to its debt limit.
“We are told that funds borrowed to build these below market structures will be repaid by the revenue rental generated by these structures, but nevertheless, these borrowed funds reduce future borrowing, and increase total debt,” he said.
Councillor Corrie DiManno voiced support.
“It’s my opinion there’s an undeniable need for under market rental housing in Banff and these future builds on Deer Street and Cave Avenue are incredibly important to our community,” she said. “Housing is a community issue.”
DiManno said Banff’s latest community social assessment in 2011 showed 65 per cent of Banff tax filers earn less than $40,000 a year while housing market rents are high, above the 30 per cent income threshold.
“Today is hopefully one of the first steps of many towards addressing the gaps in these numbers,” she said.
Coun. Chip Olver was the only politician absent from the controversial vote, while Coun. Ted Christensen wanted to postpone third reading of the borrowing bylaw to allow for more time for people to be informed on the issue or present their concerns.
“I see there is much merit in this project, but I also hear Mr. Whelan and a number of other well established citizens in town who think this is happening just a little too quickly,” said Christensen.
“I’ve heard we’re rushing and I’ve heard great questions today from the public, from open meetings and from neighbouhood meetings. We should leave no stone unturned.”
If all goes according to plan and the current schedule as it’s laid out, the Town of Banff hopes to break ground on one of the housing developments in late fall this year.
Earl said he believes it’s a good time to build because Alberta’s slowing economy will mean the construction industry will have time.
“We believe, should we be going to tender within the 2016 calendar year, we’re going to get favourable rates relative to what they might have been a year ago and relative to what they may be next year,” he said.
“On top of that, the long-term cost of borrowing is incredibly favourable right now. We would take best advantage of the opportunities that a slower Alberta economy brings and through that this project could save substantial money.”
Mayor Karen Sorensen said housing has been an issue for years and years and years and it’s time to move forward.
“I owe people who stop me on the street, and email me begging us to build rental housing, and yes, those young faces who physically knock on my door at my home and ask if there’s any chance I have a suite I can rent to them,” she said.
