Downtown Calgary office towers to be converted into affordable housing with new grant

Nearly 100,000 square feet of office space between two towers in Calgary’s downtown core will be converted into non-market housing as part of a new city grant program.

The projects, set to create 128 units of affordable housing in the city’s core, are being delivered by HomeSpace Society and the Trellis Society.

Both organizations are the inaugural recipients of the Downtown Non-Market Office Conversion Grant, the city announced Monday.

The Trellis Society, partnered with Bluevale Capital Group, is set to convert office space at 441 5 Avenue SW into 63 affordable units with $6.2 million from the city’s grant towards the total project cost of $27.8 million. It will include 27 studio units, 18 one-bedroom units, nine two-bedroom units and another nine three-bedroom units.

$4.1 million in grant funding will go toward the HomeSpace Society’s conversion at 1000 8 Avenue SW which will create 65 non-market units.  That project, estimated to cost $27.5 million, will see 30 studio units and 35 one-bedroom units.

According to Calgary Mayor Jeromy Farkas, the projects help the city move closer to its goal of building 3,000 non-market units per year.

Last year, the city approved development permits for 1,800 non-market homes, surpassing the 893 built in 2024 and well above the 10-year average of 374.

The $10.3 million grant is funded through Calgary’s share of the Housing Accelerator Fund (HAF), through which the city has been awarded $251.3 million, including top-ups.

However, there are concerns future funding through HAF could be impacted as city council prepares to mull whether to repeal citywide rezoning.

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A report set to be presented to the city’s Infrastructure and Planning committee Wednesday says that up to $861 million in federal funding, including HAF, could be at risk if the policy is repealed.

“It is a potential risk,” said Reid Hendy, the city’s chief housing officer. “Right now, we are in full compliance with the Housing Accelerator Fund agreement.”

According to city administration, the Canada Mortgage and Housing Corporation (CMHC) could deem the city in non-compliance if citywide rezoning is repealed due to two initiatives in the agreement including “undertake city-initiated redesignations to streamline approvals to increase housing supply,” as well as, “undertake land use bylaw amendments to promote missing middle land use districts.”

Farkas said he had a chance to meet with federal officials regarding Calgary’s share of funding while in Ottawa and Toronto last week, including with representatives from CMHC, which oversees the allocation of the HAF funding.

According to Farkas, federal representatives recognized the “tremendous success” of Calgary’s housing programs and expressed an eagerness to continue working with the city.

Calgary has exceeded the housing targets laid out in its agreement for HAF funds, and last year alone granted occupancy to nearly 28,000 homes.

“A lot of the go forward will be what the replacement approach may be to repealing blanket rezoning,” Farkas told reporters Monday.

“These conversations continue, but I’m certainly very encouraged by our conversations at the very highest levels both administratively and politically.”

Farkas ran on a platform to repeal and replace the citywide rezoning policy, but a potential replacement hasn’t yet been proposed.

Calgary city council is set to hold a public hearing on March 23 on repealing the policy.

The policy took effect in August 2024, and changed the city’s land-use bylaw to make residential grade-oriented infill (R-CG) the default residential zoning district across the city, which allows for a more housing types, including single-detached, semi-detached, duplexes and rowhouses on a single property.

On her radio call-in show Saturday, Premier Danielle Smith weighed in on the issue, and said the government’s Provincial Priorities Act came into effect after municipalities signed agreements for the housing funds.

“Municipalities don’t have the same bargaining power as we do when it comes to dealing with the federal government so they agree to all kinds of ridiculous conditions,” she said. “My housing minister Jason Nixon is working, he’s heavily engaged with Calgary and with CMHC and with the federal government to allow them to keep their money without getting punished.”

The City of Red Deer recently had its HAF agreement terminated by CMHC after that municipality refused to adopt zoning rules to allow “four units as of right” on a single residential property.

However, Farkas said there are differences between the situation in Red Deer and Calgary.

“The exception to Calgary is that we’re delivering the results, and then some and then some,” he said.

CMHC did not respond to Global News’ request for comment.