Provincial tax break will benefit affordable housing providers

By Al Beeber - Lethbridge Herald on October 25, 2024.

Herald photo by Al Beeber Affordable housing units operated by Lethbridge Housing Authority are seen in this photo.

LETHBRIDGE HERALDabeeber@lethbridgeherald.com

A change to the provincial Municipal Government Act that comes into effect on Oct. 31 as part of Bill 20 will benefit non-profit providers of affordable housing in the province by fully exempting them from paying property taxes.

Among those providers is the Lethbridge Housing Authority whose chief executive officer Robin James says will save $234,000 in city property taxes under the legislation.

In an interview this week, James wait lists are higher than ever with 1,529 people on those lists in Lethbridge for affordable housing or rent supports.

“Once this legislation is enacted and we get the details of it, then that money will just be invested directly back into the building of more affordable housing,” said James.

“Our wait lists are higher than they’ve ever been. So being able to have some tax relief to allow us to invest more heavily back into the affordable housing” will be helpful to the organization, James said.

Many organizations in Alberta have been lobbying the provincial government for such tax relief because it’s been unequitable with some centres already providing relief for affordable housing providers while others haven’t.

“It just makes it so much easier if we have that money back into our operating so we can qualify for things like CMHC loans and stuff,” added James.

At the LHA’s Southgate project, property taxes added $175 monthly to the rent of each unit but now that the organization won’t be spending that money on taxes, it will be able to invest that saved money into more affordable housing, said James, which judging by wait lists is going to be needed.

The next LHA likely project will likely be mixed market and be ideally where it can get land zoned which is always a difficulty, James said.

“I think we’ve had really good neighbour experiences,” she added.

On Monday while campaigning on the westside with UCP candidate John Middleton-Hope, premier Danielle Smith said about the change to the MGA “we wanted to do everything we could to clear away the barriers to getting more affordable housing built. We’ve got a strategy to spend $9 billion to get 25,000 affordable housing units by 2031 and we wanted to make sure that the property taxes were not a barrier so we’ve passed policy saying that we will not collect the education portion of the property tax. If a municipality wants to pass a bylaw to add the taxes, they’re welcome to do that.

“But we thought that we would set the stage by saying that we believe if we want to get more of this type of housing built, we’ve got to remove all the barriers and all of the costs that we can.”

City council on Tuesday as part of its consent agenda passed a recommendation by the Economic and Finance Standing Policy Committee – which consists of the mayor and all council members – directing administration to return to the SPC in the first quarter of 2026 or earlier following the implementation of the province’s Bill 20 with an overview of that bill’s impact on a municipal tax rebate program as well as funding options for council consideration and utilize guiding principles of a non-affordable housing tax grant program to evaluate any requests for funding in lieu of 2024 property taxes for affordable housing should they arise.

The City’s guiding principles for affordable housing tax rebate requests include that applicants should be able to demonstrate for council’s consideration their non-profit status, affordability requirements and income threshold based on several criteria.

Non-profit entities should, say the City’s guidelines:

• Own a facility outright or hold at least a 50 per cent ownership stake in a partnership managing a property through lease or manage the property directly and

Be current on all property taxes, not limited to the specified property, and maintain

Good Standing with the City of Lethbridge.

Eligible properties should:

• Ensure that a minimum of 50 per cent of property units are rented out at affordable rates as defined by local standards.

• Not currently be benefiting from exemption from property taxes.

• Be in good standing with the City of Lethbridge, meeting all applicable regulations

and standards.

• Not currently receiving other grants in lieu of property taxes, from any other source.

Those guidelines also state that allocation of funding should be determined on a property-by-property basis to ensure equal distribution and efficient utilization of resources. Eligible property may receive up to 100 per cent of municipal portion of property taxes, prorated in accordance with the percentage of residential units meeting the prescribed affordability criteria, an approach the City says “ensures that resources are directed exclusively towards units being provided at affordable rates.

The guidelines say affordability is based on subsidies tied to the unit, not subsidies associated to tenants and should be leased at rates not exceeding 80 per cent of the prevailing market rates as established by the Canadian Mortgage and Housing Corporation’s median market rates.