Canmore Drains $3.66M Housing Reserve to Help Build 144 Rentals

With 250 households on Canmore Community Housing's waitlist, the Town has emptied its main housing reserve to help fund a new 144-unit rental development.

Council voted unanimously on Oct. 6 to transfer the Vital Homes Reserve's remaining $3.66 million to Canmore Community Housing (CCH) for the 144-unit rental development under construction at 100 Palliser Lane, in the Palliser area below Silvertip, just north of the Trans-Canada Highway.

The site previously housed the Palliser off-leash dog park. It also forgave a $432,250 repayment CCH owed the Town for the same project, bringing the total contribution to $4.09 million.

The money is meant to help CCH qualify for provincial and federal grants. CCH executive director Katherine Plotnick said those grants would mean less borrowing and lower rents for the people who move in.

"Ultimately this will translate into lower rents," Plotnick said.

With no money left in the reserve, Town finance staff will bring options for replenishing it to council's finance committee during November budget discussions.

CCH is a non-profit owned by the Town. It runs the Vital Homes program, which rents and sells homes below market prices to people who live or work in Canmore and meet income limits.

Plotnick said CCH aims to keep rents at least 10 per cent below market rates. CCH currently has 108 rental units and 200 ownership homes.

More than double the rentals

The Palliser Lane project, which consists of two buildings of six storeys and four storeys, will add 87 one-bedroom units, 48 two-bedroom units and nine three-bedroom units. Twenty-nine of them will be accessible, and CCH will prioritize applicants who need accessible housing for those units.

Construction is more than 40 per cent complete, and CCH expects people to move in during the summer of 2027.

"It will more than double our rental portfolio, and so we're very excited to be able to offer those additional options to people who have been waiting a long time," Plotnick said.

As of Oct. 26, the rental waitlist included 173 households waiting for a one-bedroom unit. The list is first come, first served. Plotnick said the average wait across all unit sizes is more than 400 days, and 82 households have been waiting more than two years.

Rents at Palliser Lane have not been set. Plotnick said they will depend on how the project's funding comes together.

Why the money was needed

Many grant programs expect a builder to contribute some of a project's funding without relying on loans. This is known as equity. CCH and the Town are aiming for equity of 15 per cent of the project's $76.7 million cost. Most of the Town's earlier support, mainly a $12 million construction loan, has to be repaid and does not count towards the target.

Plotnick said other levels of government want to see local money in a project first.

"Typically other orders of government would look to see a significant municipal contribution to the project and then would want to use their dollars to stack on top of that," she said.

With the new money, the Town's equity contribution is about $8.87 million, including $4.78 million worth of land it gave CCH. CCH is adding $2.65 million from its own reserves, for a total of $11.5 million, or 15 per cent.

Plotnick said she couldn't share details about which grants CCH is pursuing. She said the building will be finished either way, but without council's contribution, CCH would have had a harder time securing grants.

"That just means that in the long run, we would have to carry more debt on the project and ultimately pass those costs through to residents," she said.

She expects to have an update on grants later this winter or next spring.

'Not something I'm happy to support'

Council approved the transfer, but several members said they were uneasy about leaving the reserve at zero.

"I think that zeroing out our Vital Homes Reserve is not something I'm happy to support, but it's something I have to support because we have to deliver on our strategic plan and we have a significant project in the ground and we need to back it and we need to make it successful," said Coun. Tanya Foubert.

Coun. Jeff Mah said the trade-off was worth it.

"I do know zeroing out a reserve can be challenging psychologically, but this is one of those times where I feel the value and the exchange for doing that is absolutely worth it," Mah said.

Mayor Sean Krausert said council should expect more conversations like this in the future.

"Money sitting in reserves doesn't do anything to house people," Krausert said. "And I think what we're going to be finding ourselves in, over the next few years, is a constant process of having the conversation about what's the next project, how do we pay for it, how do we replenish reserves."

What an empty reserve means

Although the Vital Homes Reserve is now empty, the Town could still use other funds to support future housing projects.

In an interview, Chelsey Gibbons, the Town's manager of finance, said the Town has other reserves it could draw on if a housing opportunity came up before the Vital Homes Reserve is refilled.

"The purposes are meant to be guidelines, and they've generally followed them," Gibbons said. "But if a compelling opportunity were to come forward, we could look to other reserve funding sources to address it."

The reserve has no target balance, and it has not been topped up regularly for some time. Gibbons said part of the Vital Homes levy on tax bills once went into it, but that money now covers CCH's operations.

"It has been a while since we've had regular contributions to that reserve," she said.

The $12 million construction loan will not refill it either. When CCH repays the loan, the money returns to the Town's general cash and investments rather than directly to the Vital Homes Reserve.

Plotnick said the empty reserve will not change CCH's plans right away. Past projects were built with different mixes of discounted land, grants, low-cost financing and private partners.

"There's no one formula," she said. "One of our priorities in the coming year will be starting to plan out our pipeline of future projects and the associated funding strategies."

The other housing fund is short too

The Town's other main source of housing money is also below what was planned. Revenue from the Livability Tax, which applies a higher tax rate to certain properties owned by non-Alberta residents that are not primary residences, goes to a separate Livability Reserve.

The tax's 2026 budget was cut from $10.3 million to $4.4 million in May after the province exempted Alberta residents from it, and subsequent tax bill adjustments reduced expected revenue by nearly another $1 million.

Gibbons told council on Oct. 20 that the program will likely need "longer time frames" to deliver its planned projects. The Livability Reserve's six-year plan includes $320,000 a year for CCH.

Asked whether that could affect CCH, Plotnick said she would defer to the Town. She said CCH will ask council for operating money again during budget talks.

What's next

Council's finance committee begins budget talks in November, and those meetings are public. Gibbons told council that staff will bring options for refilling the Vital Homes Reserve.

"The more immediate decision in front of the finance committee could be if they wanted to identify another funding source, either a revenue or a tax," Gibbons said.

Plotnick said anyone hoping for a CCH rental should not wait for Palliser Lane to open before applying.

"Anyone who is interested in rental housing with us, we would encourage them to apply to be on our rental wait list earlier rather than later, because there is often a significant wait, and so it's just good to get in the queue," she said.

Applications and eligibility criteria are at canmorehousing.ca. CCH staff can help with applications by phone or in person.