Expansion of Authority to Support Affordable Housing
IT IS THEREFORE RESOLVED THAT the AUMA advocate for the Government of Alberta to make amendments to the Municipal Government Act to provide additional financial tools, through expansion of the local improvement tax process, that enable individuals to increase affordable housing options, such as secondary suites and accessory buildings.
WHEREAS the cost of housing has been consistently increasing across Alberta and Canadian municipalities, and lower income Albertans seem to be disproportionately affected especially with economic impacts from the COVID-19 pandemic;
WHEREAS affordable housing for families, seniors and individuals is defined as housing that costs not more than 30% of a household's total annual income, including heat, water and sewer expenses;
WHEREAS the Federation of Canadian Municipalities has a housing advocacy program which states “housing is the bedrock of livable and prosperous communities. We advocate for action on social and affordable housing, so all Canadians have a decent place to call home. Housing is more than just a roof over your head. Safe, affordable housing makes our cities and communities welcoming places to live, work and start a business. It's also key to retaining workers and attracting newcomers to enrich our neighbourhoods and drive economic growth”;
WHEREAS section 264(2) of the Municipal Government Act (MGA) prescribes the authorities for all municipalities under which loans may be provided to non-profit organizations for affordable housing initiatives and limits this authority to provides these types of loans; and
WHEREAS the local improvement tax process under Section 390.1-390.9 of the MGA was expanded to create additional authorities to make loans to individual homeowners for the purposes of encouraging environmental improvements under the Clean Energy Improvement Program (CEIP).
In support of providing safe and affordable housing for all residents of Alberta, tools under the MGA need to be expanded to provide homeowners similar local improvement tax options that were provided for the purposes of environmental improvements. The CEIP program was accomplished with amendments to the MGA and the development of a corresponding regulation to provide municipalities with the discretionary authority to cover all or part of the costs for homeowners of environmental improvements. This municipal authority could be expanded to include providing similar financial supports to implement affordable housing initiatives, like secondary suites or accessory buildings. Affordable housing options, especially for lower income individuals and families, are key for the health and economic development of all municipalities.
Secondary suites (including basement suites, granny suites, and lane housing) can provide additional rental product in a community. Homeowners are often not aware of the opportunity that this type of housing provides in assisting with their mortgage and may be motivated through this type of support or loan program to spend money to do so.
Municipalities are able to create the environment to enable the availability of this type of rental product through regulatory approaches but are not able to “loan” money to residents to introduce this housing into the community. Some municipalities have introduced limited grant programs to legalize existing illegal secondary suites or allow for new suites. This approach also requires cash contributions from the tax base to allow for the construction of these types of housing, rather than being directly costed to the homeowner.
The proposed program would work in a similar fashion to the CEIP where property owners could finance suites using competitive interest rates and repayment terms of up to 20-25 years and have the option to pay the project off at any time. Repayment would be made through their regular property tax bill. The Town of Okotoks is not aware of any other province that currently has this type of program to encourage affordable housing options.
Municipal Affairs will be completing its red tape reduction review of Parts 9 and 10 of the MGA on Assessment and Taxation in 2022. Should this resolution be adopted, AUMA will include the proposal in this resolution as part of its input during the stakeholder engagement process.