Calgary examining property tax exemption for non-profits that provide affordable housing

The City of Calgary is looking to exempt non-profit organizations from paying property taxes on their affordable housing units.

It estimated the exemption would affect approximately 360 such properties in Calgary.

The idea was included in the city's housing strategy, which was passed by city council in September 2023.

City council's community development committee threw its support behind the idea at its meeting on Thursday.

The chair, Coun. Courtney Walcott, said it's another way to allow non-profits to free up money to create more units or to do repairs on more units or offer rental subsidies to more tenants.

"We're just trying to find different, creative ways to allow our non-profit providers to invest in themselves," said Walcott, who represents Ward 8.

He predicted it will create more housing units.

"If your operating cost includes municipal taxes, it changes how many units you choose. It changes how many bedrooms you're able to build. It changes where in the city you even have the opportunity to build because it changes the whole financing of the project."

The provincial government has already waived its education property tax for non-profits. Walcott said Bill 20 included a provision that allows municipalities to offer a similar exemption.

There are several dozen non-profit organizations in Calgary that provide affordable housing units.

The CEO for Norfolk Housing Association, Maya Kambeitz, told the committee that the exemption would save her organization about $100,000 annually in property taxes.

She said not paying those taxes would allow it to avoid rent increases to cover their operating expenses, improve accessibility devices in existing buildings and do upgrades related to climate change. That includes keeping residents more comfortable in situations involving severe heat and wildfire smoke.

It could also use that money to subsidize rents for more lower income residents.

"It costs us approximately $4,800 a year to subsidize a one-bedroom, which means that the $100,000 is essentially equal to 20 affordable rents geared to income units," said Kambeitz. "That's pretty significant."

The city said this tax exemption would cost the municipality about $1.45 million a year in revenues. That amount would have to be distributed across the rest of the residential class of properties.

It said that would translate into a tax increase of 0.11 per cent for those other property owners, or about $2.48 annually.

Walcott said it's a fair trade-off.

"I think that the public would be proud to pay $2.50 a year to allow another 20 units to come online, to subsidize someone's rent, to really make sure that affordable housing is viable. So I think it's an exciting thing and I'm happy we're finally doing it."

City council will discuss the exemption proposal at its meeting on Jan. 28.