City-backed affordable housing loan in Canmore heads to second and third reading

A $3.375 million construction loan from the city to Canmore Community Housing could soon be on the books.

CANMORE – A $3.375 million construction loan from the city to Canmore Community Housing could soon be on the books.

Canmore City Council unanimously gave the first reading for the potential loan to help cover costs to build 18 affordable housing units at 205 Stewart Creek Rise. The loan may receive a second and third reading at the June 4 council meeting.

Mayor Sean Krausert said the city’s goal is to “increase the volume and pace of non-market housing being built,” which will help move this project forward.

“We’re building on things that have been done in the past, but we’re taking it to the next level. … Conducting multiple projects simultaneously is in line with our efforts to increase the volume and speed at which off-market housing is brought online,” he said.

The first reading took place at the same May 7 meeting, rezoning a direct control district at 100 Palliser Lane to relax parking requirements for a four- and six-story rental project led by CCH.

The 144-unit project aims to break ground later this year and be completed in 2025.

If approved by the council, the Stewart Creek loan would guarantee a maximum of 35 percent, or no more than the requested $3.375 million. The project is expected to cost $9.44 million.

“Potential lenders require that the city guarantee a portion of the borrowed money for the period of construction. It is anticipated that the financing requirements will not exceed $9,442,575 and that the preferred lending institution will require a guarantee of up to 35 percent of the borrowed funds from the City until the funds are repaid to the lender upon the sale of the properties, or July 31, 2026. , whichever comes first,” according to a staff report.

A staff report states that municipal law allows a municipality to guarantee such a loan, but that this must be done through an ordinance.

The city has previously approved such loans to CCH for affordable housing.

The report noted that the municipality could have placed the specific funds in a restricted account, but they would not be available for other municipal purposes. If the City Council had chosen this route, it would have been available more quickly, as the ordinance would not be effective until July 4, but city staff recommended against it because it would have a greater financial impact on the city.

However, the loan will count toward the city’s debt limit until the project is completed. If the bylaw wins approval from the City Council, it would bring the city’s debt to 57 percent allowed under the MGA. The municipality can have a debt limit of up to $105.8 million, but has an internal policy not to exceed 70 percent of the total debt limit.

The municipality is lobbying the province to make exemptions or exceptions to the debt limits when it comes to municipally led housing projects. Without an exception or exemption, a municipality is more likely to reach its debt limit due to the initial costs of the development.

Under provincial law, a municipality can only have a debt limit of 1.5 times its total revenue in its most recent audited financial statements. The debt service limit is 0.25 times that of the same financial statement. Canmore has mandated that the council’s debt limit be no more than 75 percent of what the legislation allows.

The Stewart Creek Rise project was approved by the City Council last year for rezoning to allow for low-density housing.

The land was purchased from the city by CCH in 2019 to eventually develop affordable housing.

Minor variances were approved by Canmore’s planning commission in March to help with building height, density and visitor parking.

The site covers 0.024 hectares and is located in the Stewart Creek low-density district. Montane Architecture and Ashton Construction Services – both based in Canmore – are the contractors for the project.

Work is expected to start this year.

At the May 9 CCH meeting, acting director Kris Mathieu said permitting is still ongoing, but work is expected to start later this month.

CCH has an inventory of 172 affordable housing units for ownership and 118 in its rental program.

The property waiting list is 259 and the rental list is 219. The property list added 130 applications last year, while the rental program waiting list grew by 149 in 2023.

Last year there were 19 owner-occupied sales and 2023 sales of 29 rental units.

CORRECTION: The original story incorrectly said it would go to a public hearing, but it won’t go to second and possible third reading until the June 4 council meeting. The online article has been corrected and the Outlook apologizes for the mistake.