CANMORE – A $3.375 million construction loan from the municipality to Canmore Community Housing could soon be on the books.
Canmore council unanimously gave first reading for the potential loan to aid in costs for the construction of 18 affordable housing units at 205 Stewart Creek Rise. The loan will receive a potential second and third reading at council's June 4 meeting.
Mayor Sean Krausert said council’s goal is to “increase the volume and pace of non-market housing that’s being built,” which this project will help continue.
“We’re building on things that have been done in the past, but we’re taking it to the next level. … Having multiple projects going concurrently is aligned with our efforts to increase the volume and pace of which non-market housing is brought online,” he said.
First reading came at the same May 7 meeting that had a direct control district at 100 Palliser Lane rezoned to loosen parking requirements for a four- and six-storey rental project led by CCH.
The 144-unit project is aiming to break ground later this year and be completed in 2025.
If the Stewart Creek loan is approved by council, the loan would guarantee a maximum of 35 per cent or no more than the $3.375 million ask. The project is anticipated to cost $9.44 million.
“Prospective lenders require that the Town guarantee a portion of the funds loaned for the period through construction. It is anticipated that financing requirements will not exceed $9,442,575 and the preferred lending institution requires a guarantee of up to 35 per cent of the loaned funds from the Town until the funds are repaid to the lender upon sales of the homes, or July 31, 2026, whichever is earlier,” a staff report said.
A staff report noted the Municipal Government Act allows a municipality to guarantee such a loan, but it needs to be done through a bylaw.
Council has previously given the OK for such loans for CCH for affordable housing.
The report noted the Town could’ve set aside the specific funds in a restricted account, but they would be unavailable for other Town purposes. If council had chosen that route, it would’ve been available faster since the bylaw wouldn’t be valid until July 4 but Town staff recommended against it since it would have greater impact on the Town financially.
The loan, however, will count against the Town’s debt limit until the project is finished. If the bylaw receives council approval, it would bring the Town’s debt up to 57 per cent allowed under the MGA. The Town can hold a debt limit of up to $105.8 million, but has an internal policy of not surpassing 70 per cent of the total debt limit.
The Town is lobbying the province to exempt or make an exception on debt limits when it comes to municipally-led housing projects. Without an exception or exemption, a municipality is more likely to bump up against its debt limit due to the upfront costly nature of development.
Under provincial legislation, a municipality can only have a debt limit 1.5 times the total revenue in its most recent audited financial statement. The debt servicing limit is 0.25 times from the same financial statement. Canmore has council direction that its debt limit be no more than 75 per cent of what legislation allows.
The Stewart Creek Rise project was approved for rezoning last year by council to allow for residential low-density.
The land was bought by CCH from the Town in 2019 to eventually develop affordable housing.
Minor variances were approved by Canmore’s planning commission in March to aid with building height, density and visitor parking.
The site area is 0.024 hectares and is in the low-density Stewart Creek district. Montane Architecture and Ashton Construction Services – both Canmore-based – are the contractors for the project.
The work is anticipated to begin this year.
At the May 9 CCH meeting, acting executive director Kris Mathieu said the permitting is ongoing but work is expected to start later this month.
CCH has an inventory of 172 affordable homes for ownership and 118 in its rental program.
The ownership wait list is 259 and rental is 219. The ownership list added 130 applications last year, with rental program wait list growing by 149 in 2023.
There were 19 ownership sales last year and a turnover of 29 rental units in 2023.
CORRECTION: The original story incorrectly stated it would go to a public hearing, but it will only go to second and potential third reading at council's June 4 meeting. The online article has been corrected and the Outlook apologizes for the error.
