An inclusive economy is critical to Calgary’s ability to attract and retain the talent and investment our business community needs to take advantage of growth opportunities. Ensuring the people who drive Calgary’s business community have access to basic needs, including housing, is fundamental to our social wellbeing and economic vibrancy.
According to the 2023 Q2 Canadian Survey on Business Conditions, affordability remains top of mind for businesses, employers and employees, with over 58 per cent of businesses citing concerns related to rising costs. As persistent inflation and supply chain disruptions boost both the cost of inputs and the cost of living, prioritizing affordable housing and an accessible housing market is essential to ensure all Calgarians have equal opportunities to prosper. Addressing this challenge will require the prioritization of increasing the supply and diversity of housing stock across Calgary, and a holistic approach from all levels of government.
In Calgary, home prices continue to rise beyond income levels, with one in five households unable to afford where they currently live, and 75 per cent of households unable to purchase a single-family home. Even the development of purpose-built rental stock – an essential alternative to home ownership – has been outstripped by demand. Currently, Calgary’s rental vacancy rates are among the lowest in Canada, sitting at 1.8 per cent, with increased competition for rentals resulting in a 17 per cent year-over-year increase in both one and two bedrooms – the highest increase in the country.
Critically, to adequately afford rent in Calgary, an annual income of $84,000 is required – up from 67,000 in 2022. With the average Calgarian earning $61,400 annually, available housing options are far from the recommended 30% or less of before-tax income needed to be considered affordable. At the same time, businesses are struggling to keep up with rising costs, undermining their ability to accommodate wage increases for employees to offset cost of living concerns. A recent survey of Calgary businesses noted that over 54 per cent of respondents are unable to increase wages as a result of rising costs, including non-residential property taxes. The compounding impact of higher costs on the economy underscores the need to ensure City Council address all affordability concerns in their purview, including all housing support options.
Like many large urban cities, a shortfall in housing is exacerbating affordability issues, but it’s particularly acute in Alberta. A 2022 study by Scotiabank found Alberta ranks second lowest among the provinces in terms of number of homes per capita. Closing this gap will require the construction of more than 138,000 additional housing units. With Calgary’s population having grown by over 40,000 since April 2022, an additional 110,000 are expected to be needed by 2027. If Calgary wants to continue to diversify its economy, it must prioritize the development of all types of housing to ensure Calgary can continue to attract labour, capital and opportunity and provide new Calgarians with an affordable place to live.
While population has grown, we continue to have a deficit of construction labour, delaying the ability to build more homes and address the supply gap. According to the Calgary Construction Association, there are between 2,500 and 4,000 vacant positions in the industry. As such, the City must continue to work with other levels of government to bolster support for skilled trades and ensure post-secondaries have capacity to accommodate new students, including those enrolled in associated apprenticeships.
The business case for affordable housing
Calgary has a lot going for it – internationally ranked post-secondaries, world-class sporting infrastructure, and a diversity of employment opportunities. However, despite ranking in the top 10 most livable city in the world, Calgary can only succeed if people have a place to live – and one in five Calgary households are unable to afford their current home. Affordable housing is critical to securing the talent businesses need, and increasing housing supply will make Calgary a more competitive jurisdiction in the race for talent and investment.
While there is no panacea, the links between housing and economic and social value are clear. Affordable housing provides numerous benefits to individuals and communities including improved physical and mental health, increased community involvement, growth in social capital, better employment opportunities and stronger contributions to GDP.
A 2023 report conducted by Constellation Consulting Group found that every dollar invested in addressing family homelessness generates between three and 15 dollars in social and economic value. While the social return on investments ratios vary, the direction is certain. An investment in affordable housing results in positive social and economic returns, which would spur further investments from businesses, regardless of sector.
The Calgary Chamber is strongly encouraged by the Task Force’s acknowledgment of the importance of building an inclusive economy to our city’s continued success. The recommendations put forward are bold, offering innovative solutions to the near and long-term challenges facing Calgary’s housing market.
When considering the six recommendations, we recommend:
Prioritizing options that leverage private sector investment, minimizing the cost to the City and therefore taxpayers – particularly given increased taxation would decrease affordability, ultimately running counter to the work of the Task Force.
Prioritizing policy and regulatory changes that make it easier for developers to acquire land and build housing, fostering collaborative relationships with the housing sector and private builders to supercharge project development – ultimately aiding meaningful improvements without added costs to taxpayers.
Advance the development of all types of housing to ensure Calgary can continue to attract labour, capital and opportunity and provide all Calgarians with an affordable place to live.
Advocating to the federal government to offer GST rebates collected on new housing construction to incentivize and increase affordability of new construction.
Calgary has the potential to become a leader in addressing housing affordability among major Canadian cities. In doing so, we can demonstrate why Calgary continues to consistently be ranked as one of the best places in the world to live, work and play. The Calgary Chamber urges Council to engage with Calgary’s business community as they consider the Task Force’s recommendations. We look forward to working with Council and the Task Force, on behalf of Calgary’s business community, to implement solutions for the benefit of all Calgarians.
President & CEO Calgary Chamber of Commerce
ABOUT THE CALGARY CHAMBER OF COMMERCE
The Calgary Chamber of Commerce exists to help businesses reach their potential. As the convenor and catalyst for a vibrant, inclusive and prosperous business community, the Chamber works to build strength and resilience among its members and position Calgary as a magnet for talent, diversification and opportunity. As an independent, non-profit, non-partisan organization founded in 1891, we build on our history to serve and advocate for businesses of all sizes, in all sectors across the city.