REALTORS® serving Calgary and area

Sept. 04, 2014 | Cody Stuart

Suite debate

Petition forces secondary suites back on the agenda

Calgary's long-running debate on secondary suites has gone viral.

The latest salvo in the bid to gain wider acceptance for secondary suites comes by way of an online petition backed by the student unions at Calgary's two universities along with Vibrant Communities Calgary, a group dedicated to addressing poverty in the city.

The petition, titled Calgarians for Secondary Suites, began popping up on Facebook and Twitter over the weekend, demanding the City make a plebiscite on the issue part of the 2017 municipal election. A successful plebiscite would bring an end to one of the longest running debates at Calgary city council, with the issue dating back to Mayor Naheed Nenshi's first mayoral campaign.

"In my view, let's legalize secondary suites. Other cities have done it and I really can't, for the life of me, understand why we're dragging our heels on this policy," said Kent Hehr, MLA for Calgary-Buffalo.

A proponent of citywide legalization of the suites, Hehr is one of the thousands who have shared the link to the online petition since it launched.

"We have a real affordable housing issue in this city, not only for first-time homebuyers, but (because) there's an abundance of homelessness," said Hehr. "This is just something that is necessary to the development of our city to continue going forward.

"It really makes sense. It not only helps new homeowners, it helps people find affordable living places because there are more of them out there."

The need for the suites has been emphasized in recent months, with the city's vacancy rate ranging between one and 1.4 per cent, according to Canada Mortgage and Housing Corp. (CMHC).

In June, CMHC reported Calgary's vacancy rate at 1.4 per cent, an increase from the 1.2 per cent from the previous year. Calgary is tied with Edmonton for the lowest rate in the country, followed by lower than Vancouver's 1.8 per cent and Toronto's 1.9 per cent. Rents in the city are also among the highest in Canada, climbing to an average of $1,267 a month for a two bedroom. Calgary trails only Vancouver ($1,274) for the most expensive rent in Canada.

Currently, homeowners looking to add a suite to their existing or potential house have faced "extreme" zoning restrictions. An investigation earlier this year by the Calgary Journal – Mount Royal University's student newspaper – found 13 of 20 suites up for approval were eventually denied.

In contrast, Edmonton approved 1,396 development permits from 2010-2013 as part of an incentive program to increase safe, affordable housing options for lower-income households in the city.
The rising cost of homeownership in Calgary will keep secondary suites a seminal issue for would-be buyers, said David Brown, broker/owner with The Real Estate Company.

"I am finding that there is still a strong demand for homes with secondary suites," he said. "The shift seems to have changed a little bit in the last couple of years. What I mean by this is in the past I would find more investors would be looking for a property that is suited so that they could rent out the top and bottom of a home and generate an income from the property and pay down the mortgage."

Brown cites several recent mortgage-lending rule changes behind the rising interest in owner-occupied suites.

Prior to 2010, buyers purchasing a non-owner-occupied property as an investment would have only needed a 10 per cent down payment to qualify for CMHC insurance.

Over the last few years, however, changes that reduced the maximum amortization period from 30 years to 25 and increased the minimum down payment for an investment property to 20 per cent has priced many hopeful buyers out of the market. As a result, more buyers are living in one area of the home while renting out another as a way to make buying a home more affordable, said Brown.

"Due to the increase in prices in our city, many singles or couples starting out are having trouble trying to get ahead with their high mortgage payments," he said. "So having a 'mortgage-helper' suite makes life just a little easier.

"Lately, I am finding the buyer is looking at [that sort of] secondary suite. By this I mean the buyer is not necessarily an investor, but rather a buyer who plans on living on the top level and wants to rent out the bottom level to a qualified tenant."

Council will vote later this month on a motion from Coun. Druh Farrell that would be a step towards legalizing secondary suites in four inner-city wards and within walking distance of major transit routes. Last July, a motion to legalize secondary suites across the city was defeated
by a 9-6 vote.

Tagged: Calgary | Calgary Community | Calgary Real Estate News | City Council | Druh Farrell | Kent Hehr | MLA | Secondary Suites

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