$129M in housing funding 'at risk' as Calgary begins rezoning repeal process, housing corporation warns

In the wake of Calgary's council kicking off a process to repeal the city's blanket rezoning policy, the corporation responsible for administering significant federal housing money warns the changes could put funding for new housing at risk.

In the days leading up to Monday's vote, there had been uncertainty around the more than $129 million in federal funding still pending for the City of Calgary through the Housing Accelerator Fund (HAF), which is administered by the Canada Mortgage and Housing Corporation (CMHC).

The HAF is intended to help fast-track 112,000 new homes across Canada by 2028. Calgary's agreement saw $251.3 million allotted under the program, to be dispersed in four separate advances. The city has already received around $122 million.

Former housing minister Sean Fraser wrote to former Calgary mayor Jyoti Gondek in a 2023 letter that stated "in order to receive a positive decision from me on your application — you must end exclusionary zoning in your city."

"As we start deliberations on how we best address Calgary's housing crisis, [council] has just received this letter of support from [Fraser]," Gondek wrote in 2023. "We will jeopardize or lose federal funding if we do not approve the full strategy. We must act now."

Calgary's blanket rezoning policy passed in May 2024 as part of the city's longest-ever public hearing.

In November, a spokesperson from the CMHC said "no official decision" had been made about the future of Calgary's funding in light of council's upcoming decision.

In a statement on Thursday, Leonard Catling with the CMHC said the corporation expects "municipalities to fulfill their agreements."

"This includes Calgary’s commitments to eliminate exclusionary zoning and accelerate approvals. If commitments aren’t met, or are reversed, Housing Accelerator Fund (HAF) funding is at risk," the statement reads. "We are closely monitoring Calgary’s deliberations ahead of a decision on Calgary’s HAF funding."

Farkas addressed situation Monday

On Monday, prior to the vote, Calgary Mayor Jeromy Farkas addressed the situation. He said he wanted to share "material information" with the public that he had "provided by way of email last night" to members of council.

"As council [considers] this motion, I just wanted to outline the discussions that our offices had with other orders of government on housing. So over the past several weeks, I spoke directly with federal officials," he said, referring to various federal officials, including Housing and Infrastructure Minister Gregor Robertson and Finance Minister François-Philippe Champagne.

“Federal officials confirmed the compliance with the Housing Accelerator Fund is assessed based on housing outcomes, not the use of any single zoning tool. Blanket rezoning was not identified as a legal requirement of the HAF contribution agreement," Farkas said.

"I also explicitly raised the potential of a repeal with Minister Champagne, and he pledged his support to work with us on a flexible approach that respects local decision-making."

WATCH | What Calgary's mayor said about housing funding during the blanket rezoning vote:

Council ended up voting 13-2 in favour of rolling back the policy, with Ward 7 Coun. Myke Atkinson and Ward 8 Coun. Nathaniel Schmidt voting against. It will now head to a public hearing next spring before going to a vote before council.

A spokesperson for Robertson wrote in an email to CBC News that the Housing Ministry was "aware" of Calgary's proposal.

"[We] are reviewing the details, but we’ve said both publicly and in conversations with the City of Calgary that we expect municipalities to fulfill the agreements they signed with the federal government in order to get access to federal funds," Renée Proctor wrote in an email.

"If a partner’s agreed upon commitments aren’t met or are reversed, this puts their HAF funding at risk.”

Councillors weigh in

Ward 9 Coun. Harrison Clark, who voted in favour of kicking off the rezoning repeal, said he did so with an understanding that the federal government is “looking for Canadian municipalities to step up and do the work that it takes to meet our growing demands on housing.”

"I believe that we can enter that negotiation with them from where we stand today without blanket rezoning and still achieve the shared goal,” he said.

Ward 4 Coun. DJ Kelly said the decisions council needs to make have to be “for planning reasons, not for those financial reasons.”

“Short answer to that is no, I’m not 100 per cent confident [that blanket rezoning’s replacement would allow Calgary to hit its targets] … obviously we’re really concerned. Everyone around the council table is about trying to be able to maintain those funds,” he said.

“But the reason why we either have R-CG zoning, or R1 or RC2 or any of those kinds of things across Calgary, cannot be 100 per cent based on funding from other levels of government. They need to be made because that's in the best interest of that community, that's in the best interest of Calgary.”

Schmidt, one of two votes against the repeal process starting for blanket rezoning, wrote in an statement that he “voted against repeal of blanket rezoning for several reasons, but primarily because we are in a housing crisis in Calgary.”

“We can't afford to turn down opportunities from other levels of government for hundreds of millions of dollars to help us build a home for every Calgarian,” he wrote.

“There are two things I think all of council agrees on: we need more clarity and collaboration with our partners, and, for a city that is expected to hit the two-million-population over the next few years, we need more housing."

'We look forward to being judged on results'

Harrison Fleming, the mayor’s director of communications, wrote in an email Wednesday that Calgary is already a "national leader" on housing, adding HAF is a program focused on delivering housing, and the city is "committed to getting the homes built that Calgary needs."

"There is a growing number of Canada’s large cities which believe that flexibility and collaboration are the path forward," he said.

"Mayor Farkas is continuing to have conversations with our federal and provincial partners, as well as other mayors, and we will continue to focus on delivering the housing Calgary needs. We look forward to being judged on those results."

The blanket rezoning policy was a major municipal election issue, with candidates debating whether to tweak or fully repeal the policy.

It was intended to eliminate bureaucratic processes by allowing Calgary to adapt to a growing population by permitting higher-density housing, like townhouses or row houses, in those neighbourhoods that previously only allowed single or semi-detached homes.

Detractors have argued that blanket rezoning is putting stress on aging infrastructure, causing issues finding parking and worsening traffic for communities while damaging the character of neighbourhoods.