Gap to restore pre-pandemic housing affordability by 2036 in Calgary narrowing: CMHC – Calgary

Calgary is one of the few major Canadian cities where the supply gap to restore pre-pandemic housing affordability levels has narrowed, according to the Canada Mortgage and Housing Corporation (CMHC), due to years of record construction.

According to the federal housing agency’s latest supply gap estimate report, Calgary needs between 4,000 and 5,000 additional units annually by 2036 to restore affordability.

“What we’ve seen is years of record housing starts have resulted in a significant narrowing in that gap as builders have stepped up scaling supply,” said CMHC’s lead economist for the Prairies, Taylor Pardy. “It’s actually been cut in half relative to our previous estimate.”

Those figures translate to between 23,000 and 24,000 total new housing starts annually over the next 10 years.

Current trends indicate Calgary is on pace to build around 19,000 total new homes this year, CMHC said.

According to Pardy, the city recorded 27,000 housing starts last year alone as part of three consecutive years of record home construction.

“We’re on track, essentially, this year to maintain well above the 10-year average starts,” Pardy told Global News. “Overall, the market is still looking fairly robust.”

Housing advocates, however, are worried Calgary won’t be able to keep pace with the construction required.

Total housing starts have declined more than 20 per cent, according to CMHC, as projects that began within the last three years reach completion.

CMHC said the slowing construction reflects rising vacancy rates, growing inventories, higher construction costs and “broader economic uncertainty.”

“As a result, we expect supply growth to moderate once the current development pipeline is delivered,” CMHC said in its report.

Alex McColl, a board member with More Neighbours Calgary, told Global News the narrowing supply gap is “a good thing,” but questioned whether the recent repeal of citywide rezoning will have an impact on housing starts moving forward.

“So this council is riding the momentum created by the previous housing strategy, which is good,” he said. “But repeal without replacement reverses the conditions that increase housing supply.”

The policy, which took effect in August 2024 after being approved by the previous city council, changed the city’s base residential zoning to allow for more housing types on a single property, such as duplexes, rowhomes and townhouses, without requiring a public hearing.

The current city council voted to repeal citywide rezoning earlier this year, and the policy change took effect in August.

The move will see 306,774 residential properties across the city redesignated back to their original low-density residential districts.

“Good starts two years ago are now showing good completions today, but we’re also seeing the starts go down,” McColl said. “That worries us that in two years time, we’re going to continue to trend in the wrong direction.”

Calgary Mayor Jeromy Farkas defended the move during a question and answer session with a local Rotary Club chapter on Wednesday.

“I don’t think, with the infrastructure that’s in the ground that it was adequate to be able to take a one-size-fits-all approach,” Farkas said. “But that said, we have to continue to build and we have to continue to build the housing that Calgarians can afford.”

According to a city spokesperson, building permit activity has also shown growth in new communities such as Ricardo Ranch and Alpine Park, and in established communities like Haysboro and Tuxedo Park.

“Altogether, Calgary continues to see strong housing construction which is helping to approach a balance between supply and demand,” the city said in a statement.

However, for lifelong Calgarians like Judy Klassen, the record housing construction can be a concern.

“I don’t like it,” she told Global News. “Look at all the condos they’re putting up . Even in the older areas, they’re building eightplexes on one lot.”

Meanwhile, Calgary city council is getting set to vote on a refined housing strategy with a narrowed scope from 98 recommendations to roughly 10, that shifts its focus to non-market housing.

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