BANFF – A fee to be paid to the Town of Banff in lieu of businesses building employee housing is set to significantly jump next year.
The housing cash-in-lieu fee, which is recalculated annually based on the Calgary Construction Price Index for low rise apartments, would go from $34,700 to $45,200.
“It’s a fairly substantial increase year over year,” said Chris Hughes, the director of corporate services for the Town of Banff during a governance and finance committee meeting on Monday (Nov. 22).
The Town of Banff requires the construction of new housing in conjunction with any new commercial development or intensification of existing commercial development.
There are three ways of doing this – a business can build its own housing, partner with a third party to provide housing and credit that towards commercial development, or pay cash to the municipality in lieu of building housing.
Darren Enns, the director of planning and development for the Town of Banff, said cash-in-lieu revenue typically comes from intensification of use and not larger commercial developments.
“It is really designed for a smaller operator that’s going through a change of use process and does not have the means to construct a single additional bedroom,” he said, noting building the housing may be more of a barrier than paying cash-in-lieu.
“Our experience is larger developments, for example in the hotel sector, are highly unlikely to pay cash-in-lieu. They’re much more likely to provide staff accommodation to their employees through building staff accommodation.”
With a federally-legislated cap on commercial development, Enns said he believes the Town of Banff will continue to see an intensification of properties.
“Our goal is to make sure we have the adequate amount of housing built in association with that intensification,” he said.
A cash-in-lieu provision was introduced for housing in 1992, which historically helped create funds for housing developments. The current balance in the reserve is approximately $202,000. In the last 12 years, cash-in-lieu payments through this program have varied annually from zero to about $78,000.
Councillor Ted Christensen asked if consideration has been given to doing away with the cash-in-lieu policy and mandating businesses to build the staff accommodation.
“How restrictive would that be?” he said. “I’ve heard many questions on why we have cash-in-lieu of housing, and why don’t the businesses just provide staff accommodation as they once did.”
Enns said the previous council directed administration to bring back a report on housing and parking fees.
“I think it’s scheduled for Q1 of 2022 where council can crack this open and have a very fulsome discussion,” he said.
Councillor Barb Pelham questioned why there wasn't a Banff surcharge on top of the Calgary Construction Price Index for cash-in-lieu increases.
“I am thinking generally construction in Banff is probably a little bit more expensive than construction in Calgary, just with distance,” she said.
“I am curious why we don’t round that up 10 per cent-ish or whatever percentage Banff construction tends to be higher than Calgary?"
Enns said there was discussion on different indices when the policy was amended, noting that the general inflation was a poor index compared to construction.
“Whether or not there is a Banff surcharge that maybe applies above that is probably difficult to quantify and that’s probably why we stayed away from that,” he said.
A final decision will be made on the cash-in-lieu fee increase at the Dec. 6 council meeting when three readings of the fees and charges bylaw are scheduled.
