Canmore's Housing Crisis: New Solutions for 2024-2025? 

Background

Over the past decade, Canmore has struggled with an increasingly severe affordable housing shortage. To address this crisis, the town created a livability task force (a diverse group of Canmore citizens) in 2023 to recommend new housing policies.

Under the headline “Housing Action”, three measurements were identified, and the task force’s recommendations were accepted by council in January and August 2024.

“Every door in this community has a responsibility to contribute to helping solve our housing crisis … We will see how this rolls out in the coming years, but I’m happy to put my hand in the air to take a step forward in finding new resources to help fund and support our housing crisis.” ~ Councillor, Joanna McCallum

The Three Key Initiatives

1. Limit the Growth of Tourist Homes
   Limit the Growth of Tourist Homes through a tax program (Tourist Home Program) and tightened business licence regulations (Regulation of Short-Term rentals)
2. Livability Tax Program (Starting 2025)
   Incentivize Full-time Long-term Occupancy of Homes (Livability Tax Program)
3. Incentivize Purpose-built Rental Accommodation >> This project is scheduled for 2025

1. Tourist Home Program; What are Tourist Homes and what changes are coming:

Tourist homes are properties with a special type of zoning called “Tourist Home Zoning”. The zoning of a property defines what can or cannot be done with the property. Residential Zoned Properties for example allow a property to be used for full-time living, long-term rentals, but not for short-term rentals (less than 1 month). Residential zoned properties do not allow for Air B&B's or VRBO's.

“Visitor Accommodation” zoned properties are the exact opposite of Residential Zoned Properties. They allow the owner to do short-term rentals, but staying in this type of zoned property does not allow stays longer than 28 consecutive days. Therefore, full-time living or long-term rental are not allowed in these properties.

“Tourist Home” zoned properties are the best of both wolds. Short-term rentals are allowed but you are also allowed to live there fulltime. Based on how an owner declared the use of the property, they either pay a higher tax for short-term rentals, or a lower tax for full-time living.

What Is Changing:

a.) Moving forward, the tourist-home zoning is phased out.
Existing tourist home zoned properties are grandfathered, but new tourist home zoned properties will not be allowed. The option to revert or convert a Residential Property to a Tourist Home, or the option to build new Tourist Homes, will be eliminated. (The Town has 718 tourist homes – including 75 for personal use – and eight development permits ongoing or issued will add 67 more. Though tourist homes will be phased out, Three Sisters Mountain Village Properties Limited (TSMVPL) area structure plans (ASPs) would be immune. The Three Sisters Village ASP, which was approved by council in October after the Court of Appeal supported the Land and Property Rights Tribunal’s decisions, calls for between 900 to 1,300 tourist homes to be built)

b.) For existing tourist homes, the Tourist Home Personal Use Tax subclass is removed.
All Tourist Homes are now taxed at a same higher rate. (The Tourist Home tax rate is about three times the rate of residential properties). At the same time, owners get the possibility to convert the zoning of their unit into residential which would then allow them to claim the lower residential tax. This is however a one-time process and a one-way street. Once properties have changed to residential, they cannot go back.

In other words – if you have been using your tourist-home zoned property for short-term rentals in the past, nothing will change for you. You can continue to do short-term rentals. As before, you will pay the higher tax. If you are living full-time in a tourist home zoned property, you will in the future have to pay the higher tax with the option to change your property into a residential unit and from there onwards pay the lower residential tax. If your property was designated as Tourist Home – Personal Use (Assessment Code 21A) in 2024 and you will not be converting to Residential in 2025, you can expect to see a significant increase in your taxes in June 2025. The fee to convert a tourist home to residential will be waived for a two-year period.

c.) Changing Licensing Regulations for Short-Term Rentals

While in the past several short-term rentals could operate under one licence, every unit must now have its own business licence and the licence must be displayed in the unit and in advertising. As an owner who owns several units, you will now be paying more for additional licensing. The town is anticipating seeing an additional 650-700 licences a year issued. Town staff have estimated an extra $97,500 in revenue which will then be used towards the affordable housing initiative.

2. The Livability Tax Program; What is the Livability Tax Program and what is changing?

The Livability Tax Program is a vacant home tax and affects every owner of residential property in Canmore who is paying property taxes for his or her property. In the past, all residential properties were paying tax based on their assessed value multiplied with a tax rate for residential properties. From 2025 onwards, properties that are occupied less than 183 days per year by an owner or renter will be taxed with a different, higher tax rate (note some exceptions below).

The funds collected under the program are designed to be used for non-market housing initiatives and towards funding affordability initiatives in Canmore. They could be used for a variety of community assets from land purchase for affordable housing, to paying for infrastructure that supports housing development, to affordability programs incentivizing the building of accessory dwelling units. This could include initiatives to buy affordable properties that are at risk of being sold and converted to market housing or providing support to organizations providing affordable rental housing.

Every year, the property owner must declare if his/her property qualifies for the primary cheaper residential subclass. To qualify, an owner or renter must live in the dwelling for at least 183 cumulative days in a calendar year. 60 of the days must be continuous. Apartment buildings and employee housing as defined in the bylaw, and individually titled residential parking stalls and storage units would be automatically placed in the primary residential subclass, no declaration will be required. Some other exemptions exist as well. Properties that do not qualify, pay the higher tax.

The new tax rate and the amount to be collected will be determined when council discusses its new budget, but the town recommended council to “consider setting a tax rate that makes the effort worth it” to ensure full-time and long-term residents declare each year.

“Verum Consulting” gave Town staff revenue estimates during the Livability Task Force work. They analyzed 2023 utility accounts and found that of the 8,578 residential units in Canmore, 2,260 didn’t appear to be used for full-time residents.

When mailing addresses were used, they found that 2,150 residential properties had non-Canmore addresses, indicating that properties were likely not occupied full-time by the owners.

The 2023 utility data had the assessed value of those homes from non-permanent residents at about $3 billion and municipal taxes collected at $6.1 million. If between 0.10 per cent and 0.40 per cent of assessed value were additionally collected, it would lead to $3-12 million in extra revenue.

The Debate

The target is clear: By setting a lower tax rate for residential properties, it is anticipated owners will be incentivized to either live in them long-term, full-time, or rent to someone who will. Once converted to residential, former tourist homes used as a primary residence could qualify for inclusion in the primary residential subclass.

While these policies represent bold steps toward addressing Canmore’s housing challenges, they’re not without controversy. Critics question the effectiveness of these measures in creating affordable housing and warn of potential legal challenges.

Councillor Tanya Foubert commented on the tourist home measurements: “When I look at current value of tourist homes on the market, and I put myself in the situation, I would not be converting my tourist home to a residential unit. I would be selling it on the market as a tourist home and using the money to buy a residential unit. I’m not necessarily convinced that the transition of tourist homes to residential homes through this particular change is going to be achieved and could result in more pressure on residential real estate instead of more housing units.”

Some commend the vacancy tax as a right step toward addressing the housing crisis and believe these steps are essential for fostering a more sustainable and livable community.

Others find the thought that taxing non-primary residences will create more affordable housing questionable. Some homeowners point out that this policy sows division, creating an “us vs. them” mentality that erodes the community spirit. They express their frustration with measures that “undermine property rights and create discord”.

Looking Ahead

While these policies represent a bold approach to Canmore's housing challenges, their true impact will become clear in the coming years. The community remains divided on whether these policies will effectively address the housing crisis and truly reshape Canmore’s housing market or if they will create unforeseen challenges.

More information on the Canmore Housing Action can be found here:

Town of Canmore Housing Declaration Livability Tax Program - Housing Declaration

Rocky Mountain Outlook Livability Tax Program Articles