Town of Drumheller approved its Housing Strategy in April of this year, and one of the goals outlined in the document was the need to develop more residential housing units to support a growing community.
In order to encourage development, council directed administration during the regular Monday, July 10 council meeting to evaluate becoming a builder of residential real estate.
“We have set a goal within our Drumheller Housing Strategy… to build 20 units per year; we are not achieving that right now,” explained Economic Development manager Reg Johnston during the July 10 council meeting.
He shared, although there is some development occurring locally, it is not enough to satisfy this goal.
It was also noted some employers in the immediate and surrounding areas are struggling to find employees due to the lack of “suitable” and affordable housing.
One way the Town has been trying to incentivize residential development is through making improvements to its Residential Incentive Program. The program offers a tax abatement on new developments over a four year period, equal to about two per cent of the construction costs. Some challenges to new development includes increased costs for construction following the COVID-19 pandemic, and increased interest rates, though Mr. Johnston noted these are both at a national level, along with high contractor costs at a local level.
As part of developing this program, administration undertook engagement with real estate brokers and developers and determined, although the program was helpful, it was “not enough to make a difference.”
“When we asked the developers what would work, many of them came back with recommendations of doing joint ventures and partnerships with the Town,” Mr. Johnston explained. “We are open to doing that as well; we recognize we have an advantage with respect to owning property and having the ability to borrow.”
If the Town were to have more involvement with the development process and enter into a joint venture or partnership with developers, units built could be rented out if they did not sell at an approved profit margin. This could also benefit the community due to the low vacancy rate, which Mr. Johnston explained is currently “around zero per cent.”
During discussions, council noted there is also low vacancy rates for commercial real estate and directed administration to evaluate building both residential and commercial real estate; this item will be brought back to council for decision at a future meeting.