A cyclist rides down main street in downtown Canmore, Alta. on April 5, 2018.Chris Bolin/The Globe and Mail
Last November, after a four-year stint renting in Canmore, Alta. Dylan Stewart and his partner, a health care worker, decided to move 80 kilometres east, to Cochrane.
“It’s quite a crazy [rental] market, even in Cochrane,” Mr. Stewart says. “But we found something there that suited our incomes better.”
As much as they enjoyed living in close proximity to the Rocky Mountains, the couple found their situation untenable in Canmore, as they weren’t willing to spend more than 40 per cent of their income in rent to stay in a town where the cost of living is well above the rest of the province.
“The first year, our landlord didn’t raise our rent,” Mr. Stewart says about their last rental. “But the second year she wanted to raise it over 20 per cent – we were already paying $2,150 a month.”
This situation is not out of the ordinary.
Between 2019 and 2023, the median rental rate in Canmore jumped by 20 per cent, from $1,525 to $1,836, according to CMHC data.
Insufficient supply relative to demand seems to be the culprit, but a number of barriers have kept developers and builders from scaling up Canmore’s rental stock.
“We need to unlock more supply by getting out of the way and making the process more efficient, and more functional,” says Ian O’Donnell, executive director of the Bow Valley Builders and Developers Association. “Maybe then we would encourage more people to come in and build more product.”
In 2021, the number of households in Canmore reached 6,775, a third of which are renters. However, only 5 per cent of all dwellings are purpose-built rentals.
One of the reasons construction in this segment has lagged behind is the risk associated with the high cost of land in a privileged location.
“Here in the Bow Valley, when developers look at the opportunity for a parcel, they want to maximize their return of investment,” Mr. O’Donnell says. Because returns in rental investment tend to be slow, capital often flows toward condominiums and recreational properties instead.
“Those types of products have been incredibly popular, especially tourist homes, over the last 15 years or so,” Mr. O’Donnell says. “That product really shifted the dynamics where you could get your capital in and out very quickly, and that product also allowed a great flexibility of use by the new owners.”
However, catering to tourists and part-time residents has come at the expense of local workers. To change this, Mr. O’Donnell suggests the town should facilitate the development of underutilized land in the town’s centre, and expedite the permitting process for multifamily buildings.
“Land sales can be $4-[million] or $5-million an acre, which is very expensive to develop in,” he says, noting that height and density relaxations are essential to ensure the viability of any multifamily project, and application delays add to the cost of a project.
“When you’re looking at financing, when you’re looking at interest rates, the longer this takes, the more costly it is.”
Renderings of the planned housing project at 100 Palliser Lane, a 144-unit non-market rental building that could break ground as early as August. Canmore is working on an ambitious plan to build 1,300 homes over the next two decades in Palliser Trail, a 23 hectare development on publicly owned land where at least 75 per cent of the units created are anticipated to be non-market.City of Canmore
Since 2017, the Town of Canmore has been making efforts to incentivize the construction of purpose built rentals, including the sale of a parcel at a discounted price, and granting a 75-per-cent reduction in municipal property taxes to projects committed to remaining as rental properties for at least a decade, an initiative council plans to expand further.
While these initiatives have quadrupled the number of rental units in the primary market, the new supply has proven insufficient to meet the needs of local workers.
For Luis Hernández, a chef, finding a rental for him and his family required a significant compromise.
The Hernándezes are not only paying roughly half of their monthly income in rent, they’ve also turned their apartment’s living room into sleeping quarters, because each of their two children, a boy and a girl in their early teens, requires a bedroom of their own.
“Ideally, we wanted a three-bedroom apartment,” Mr. Hernández says, adding that their search for an apartment extended for over three months. “But we only found a two-bedroom available within our $3,000 budget.”
Had his budget been more ample, finding a suitable place would have been easier. “There’s houses renting for $4,500, $5,000,” Mr. Hernández says. “That’s a ridiculous amount of money to spend in rent alone.”
Like Mr. Hernández, many hospitality and retail workers in the Bow Valley live in precarious conditions, as the chasm between incomes and rental rates widens.
“Since the pandemic, people have really wanted to move to mountain resort locations,” says Kristopher Mathieu, acting executive director at Canmore Community Housing, an arm’s length agency of the Town of Canmore, noting that the most affected by this trend are local workers. “Those are the people that are, unfortunately, being squeezed out of the market.”
The crunch is most evident in the organization’s waiting list to rent one of their 116 below-market units, which has swelled from 28 households in 2019, to 270 in April, 2024.
“The couple hundred units that have come online in the last decade is a small drop in the bucket for what’s truly needed here,” Mr. Mathieu says. “So any purpose-built rental development is a good thing to pull away at this, but the volume needs to quadruple, and then some.”
To meet the projected need of 2,500 homes by 2030, last year the Town of Canmore created a housing action plan that includes initiatives to curb the proliferation of recreational homes, and to facilitate the construction of purpose-built rentals.
“Canmore needs more development and housing in a variety of places on the housing spectrum, otherwise the prices get even further out of reach,” says Canmore Mayor Sean Krausert. However, because homes in the resale market are out of reach for a majority of the town’s workers, “we need to increase the product that they have the ability to afford, whether that be rental or ownership.”
For this reason, the town is working on an ambitious plan to build 1,300 homes over the next two decades in Palliser Trail, a 23-hectare development on publicly owned land where at least 75 per cent of the units created are anticipated to be non-market.
“To solve our housing crisis, it doesn’t just take any housing,” Mr. Krausert says. “It takes non-market housing.”
Despite recent setbacks, including the refusal of the town’s Housing Accelerator Fund application by the federal government, the first phase of this development, 100 Palliser Lane, a 144-unit non-market rental building, could break ground as early as August.
“Had we received the Housing Accelerator Fund, some things might have been easier and quicker,” Mr. Krausert says. “But we’re still committed to implementing our plans.”
In the meantime, the town has also requested the Alberta government for an exemption in municipal debt limits, so Canmore Community Housing can expand its non-market stock faster.
“While we certainly welcome a variety of housing, the vast majority of the housing that will be constructed by the development community won’t solve our housing crisis,” Mr. Krausert says. “It will be just too expensive.”