Banff Adds $390K to Keep Legal Suite Grant Program Running

Banff council has approved another $390,000 to keep a town grant program going that helps homeowners create legal rental suites, choosing to cover the cost from the town’s housing reserve instead of property taxes. 

The Accessory Dwelling Incentive Program offers up to $30,000 for a new legal suite in an existing home, such as a basement suite, a suite over a garage or a small backyard unit. It also offers up to $10,000 to bring an existing, unapproved suite up to code. 

The program launched in 2024 after Banff received a federal grant through the Housing Accelerator Fund. 

Why demand has been strong

Darren Enns, the town’s director of planning and environment, told council the program has more applications than available funding. 

Enns said the town has received 34 applications so far, and 23 of those would create new suites and 11 involve legalizing existing units. 

He said 23 projects have received building permits and 13 have received occupancy permits. 

Mayor Corrie DiManno said residents have spread the word without any formal marketing, often after seeing development permits posted around town and word of mouth.

“There's just been so much enthusiasm for this program without any real marketing behind it,” DiManno said.

Millions in private investment, staff say

Enns told council the total estimated construction value for the suites in the program is $2.5 million. 

He said building a new suite can cost about $60,000 to $150,000, depending on the size and design, which is why the $30,000 grant can make a difference for some homeowners. 

Town documents also point to a recent jump in interest. The planning department reported 11 accessory dwelling applications in the last four months, compared with 13 applications in the previous five years.

How parking changes removed a major barrier 

Enns said many suites would not have moved forward under Banff’s old parking rules. He said the town used to require homeowners to add an extra parking stall, and that blocked many suite projects on small lots. 

He also said the program also helps bring unapproved suites into the permit system so they meet safety rules, instead of being built or rented without permits. 

Why council sees in-home suites as fast, lower-cost housing

Banff’s housing squeeze is tied to how little room the town has to grow. The town says rental vacancy sits below one per cent and estimates Banff is short 700 to 1,000 homes, with future supply relying heavily on redevelopment and added density rather than expansion. 

Accessory dwellings can add homes without waiting for large projects, land assembly, or major new roads and pipes. They also rely on private investment from homeowners, with the town’s grant acting as a push to get projects moving.

The incentive program is part of Banff’s broader Housing Accelerator Fund action plan, which included commitments to support accessory dwellings and reduce barriers like parking requirements. 

How this fits into the Bow Valley

Canmore is now debating similar “small homes on existing lots” ideas, including a proposal that would allow up to two accessory dwelling units on some downtown properties. That discussion is still at an early stage and has not been paired with a grant program like Banff’s.