Calgary is Reducing Affordable Housing Despite Population Increase: Investors MUST NOT Get Caught in This Trap

By Jeff Kahane

With the City of Calgary continuing to lead the nation in population growth, secondary suites are an ever-present topic of discussion amongst a diverse group of stake-holders. Municipalities look to ensure compliance with zoning requirements and building codes, real estate investors seek to capitalize on a persistent demand for affordable housing, and home-owners consider the pros and cons of transforming their basement into accessory suites. While some will adhere to the guidelines set out by the City and Province in creating a rentable space, others will avoid the guidelines and requirements, merely making the space livable.

Accessory suites in Calgary can be divided into three categories: legal, illegal, and non-conforming. Legal suites are self-explanatory they comply with current land use bylaws (i.e., they have the proper zoning for an accessory suite) and provincial building codes. Illegal suites do not meet current or past building codes and/or land use bylaws. Not surprisingly, the range in quality of illegal suites is broad, covering units which may meet building codes but were developed without proper permits and lack proper zoning, to those at the other end of the spectrum units which would meet few, if any, of the current building codes. The final category of suite is the non-conforming type. These are units which were legally constructed at the time, but do not meet current land use bylaws, usually as a result of changes in zoning. Non-conforming suites are generally allowed to remain, but the owners are restricted on further development of the property without going through the process of obtaining proper development and construction permits. Any major work to the property may cause it to lose its legal non-conforming status unless it is brought to current codes and obtains the proper zoning.

In spite of the City and the Province both having strict building code and zoning requirements, the abundance of non-conforming or illegal suites seems to keep pace with Calgary s continued population growth. And with the vacancy rates in Calgary hovering between 1 and 2% in 2013, the issue is getting the attention it deserves. The stakeholders, however, seem far apart on what should be done.

Most notably, Calgary city council has been divided on the issue of what to do with Calgary s numerous secondary suites. On one side, Mayor Nenshi and several councilors have taken the position that existing suites across the city should be grandfathered in to be legally zoned suites, provided they comply with proper building and fire codes. This camp recognizes the housing need that is being filled by illegal suites, and anticipates the fallout, particularly to vulnerable Calgarians living in these illegal suites, should the city attempt to shut them down. On the other side of the issue are those on council who have taken a not-in-my-backyard stance. This group prefers to adhere to the status quo of having illegal suites reported by neighbors, and inspectors/by-law enforcement officers dispatched to investigate, and possibly enforce compliance with zoning and building/fire codes. Those taking this position appear to prefer that the city divert additional resources to the inspection and enforcement of illegal suites in order to ensure the safety of Calgarians.

This issue was voted on by city council in 2012, with the majority of members preferring the status quo approach over the proposal that illegal suites be allowed, and their safety regulated. While the outcome is still far from uncertain, the issue will come before city council again in 2013 as members attempt to address the disparate demands of the diverse stakeholders.

In spite of the hotly-contested nature of the debate, both sides of the issue are in agreement that the current situation is untenable, particularly in light of several high-profile tragedies involving loss of life of tenants living in illegal suites; the most notable being a tragic house fire in January, 2009 where 3 tenants lost their lives trying to escape a basement blaze started by a space heater. The suite in this instance did not meet building and fire codes, and the three perished as a result of their exit being blocked by bars on basement windows. The keys to which were nowhere to be found. This could have been avoided should the construction team have kept within fire-code and regulations. They could have even had the option to look at the likes of RIBA Stage Fire Engineers to ensure the construction was as safe as possible from an accidental fire.

In consideration of events such as this, one aspect of the debate becomes apparent: there needs to be a greater focus on the inspection and enforcement of compliance with building codes in secondary suites. While this much is clear, the route that should be taken to get there presents a much more nuanced and complicated question.

Stay tuned for our future articles on 1) what the city requires for a legal secondary suite, and 2) what the city will expect of homeowners should they be served with a notice to remove their illegal suite.

Jeff Kahane founded the Kahane Law Office in 2004. He earned his B.A from the University of Western Ontario, a B.Ed. from the U of C and Law degree from the U of C (Deans list and Silver medal winner). The law firm is ranked third in Alberta with respect to real estate transactions by volume by a title insurance company. Jeff won the Ernst & Young Global competition for methods of building a better global law firm in 2002, the Alberta Centennial Medal of Honour in 2005, was nominated for the Ernst & Young Entrepreneur of the Year Award in 2007, was named Leader of Tomorrow in 2010 by Business in Calgary magazine and won the Calgary Choice Award for small business in 2011. In addition, Kahane Law Office was recognized as a Best Place to Work in Calgary in 2006.