Banff politicians have given administration the green light to borrow money to pay for an affordable housing development.
On Monday (Sept. 26), council gave second and third reading to a bylaw that allows the Town of Banff to borrow funds for the construction of a $23.8 million project on Deer Lane, which will see 132 affordable rental units built to help deal with Banff’s housing crisis.
Mayor Karen Sorensen said she also remains hopeful there may be provincial dollars to go toward the development.
“The province is very well aware of this project,” she said. “I remain hopeful that with potential funding coming down the pipe for affordable housing, we might even be able to find some provincial dollars to reduce that debt.”
Financing for the project will come from a 30-year debenture from Alberta Capital Finance Authority in the amount of $22.8 million. That’s in addition to a previous $965,000 loan, which included costs of the land from Parks Canada.
The development, to be managed by Banff Housing Corporation, is based on a cost recovery model and will not be financed through taxpayer dollars.
“The payments and building operating costs will be repaid with future rents collected from the project,” said Kelly Gibson, corporate services manager for the Town of Banff.
Annual rent from the housing development is projected to be approximately $1.9 million.
To rent a unit, a proposed rate will be based on Banff’s median employment income, with rent to not to exceed 32 per cent of household income. Current market rates are calculated to be above the 30 per cent income threshold in Banff.
The forecast 2018 median income per year in Banff, according to the Town, is just over $28,000 and monthly rental rates will be: studio ($860.38), one-bedroom ($1,122.24), and two-bedroom ($1,645.96). Terms and conditions have not been finalized yet.
With a vacancy rate in Banff of zero per cent for the past three years, the development is expected to potentially house about 250 people. Construction is slated for spring 2017, with hopes occupancy will be in 2018.
