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One Size Does Not Fit All


Brad Field

It might feel like a distant memory, but there have been times in Calgary’s history where vacancy rates for residential properties have fallen below one per cent.

The current real estate market in Calgary has sparked many desperate conversations. It seems like Calgary real estate and housing are getting it from all angles these days.

Research commissioned by the Alberta Real Estate Association (AREA) says 47 per cent of Alberta’s young people have given up on owning a home. Jason Kenney spoke at the Calgary Real Estate Board (CREB) 2019 forecast. His point? The federal government has used a “one-size-fits-all” approach to deal with a two-region problem.

Federally, measures set out to cool escalating prices in both Toronto and Vancouver have frozen Calgarians out of the market altogether. To add insult to injury, the Government of Canada’s 2019 budget offers a Band-Aid solution, leaving the taxpayer on the hook for loans to Canadians entering the housing market. The Government of Canada keeps trying to use nationwide policies for problems that only exist in two municipalities. Why not encourage and support locals to come up with solutions tailored to the needs in their markets?

The thing is, there are local solutions in place. Ones that don’t involve any government intervention.

Liberty Home Ownership provides down-payment assistance to Albertans looking to enter the housing market. The model has the potential homebuyer contribute $1,500 to the down payment, and Liberty lends the remainder of the required five per cent as an equity loan. When the time comes to sell, a portion of the home’s appreciation is paid back to Liberty. This helps to address situations in hot rental markets where rent is higher than mortgage payments for similar properties, and potential buyers struggle to then save for their down payments. This model was introduced to Calgarians through strategic partnerships, including none other than Calgary’s own Truman Homes, which provided units at below market rates to kick-start the program.

While operating a similar model, the City of Calgary’s Attainable Homes program found themselves in a deficit scenario given the economic climate and the implementation of the stress test, among other factors. They have recently transitioned from equity loans to straight second loans, and not on just new builds, but existing housing stock as well.

The perceived issue with these programs is that many hear “affordable housing” and think low-income housing. This isn’t the case. It’s the transition point between renting and owning. It’s the difference between seeing home ownership as a possibility, and being the 47 per cent who have given up. The reality: the harder it is for someone to make that transition, the more pressure it puts on the rental market, which in turn escalates rental rates.

Ottawa trying to solve problems in Calgary won’t cut it. It’s evident in the real estate market; we need local solutions to the uniquely Calgarian problems we have around housing. Finding an innovative solution to getting first-time buyers into their own homes is only one step toward some economic stability, but it’s a hell of a place to start.