Surplus Municipal Land Policy
For Affordable Housing
Suite 600, 1202 Centre Street SE Calgary, Alberta T2G 5A5 Canada
June 20, 2007
Surplus Municipal Land Policy for Affordable Housing1
Constant levels of poverty in the 2000s, high housing costs, low vacancy rates and a declining rental stock
have combined to make affordable housing a pressing issue in Calgary. There is no one single solution to
this crisis; a combination of policy changes, new housing stock, and social supports are necessary. Critical
steps can be taken at the municipal level to facilitate the creation of affordable housing.
Acquiring land for affordable housing is one of the greatest challenges in meeting housing needs, particularly
for non-profit organizations. There is also a need to create incentives for private sector engagement in
affordable housing; the contribution of land could be one strategy towards this.
To this end, efforts must be made to access land from all three levels of government for affordable housing
purposes. It has been suggested that the City could contribute surplus or underutilized municipal properties
(land & buildings) to facilitate development of protected affordable, appropriate and supported housing
initiatives. However, there are several considerable barriers surrounding this issue.
Competing Internal Interests for Limited Surplus City Lands
It must be noted that surplus City-owned lands are neither plentiful nor always suitable for residential
development. In cases where there is surplus land, various interests are competing for it. In the City of
Calgary, there is an internal business process around surplus lands that determines how such assets are
allocated. If a site is identified as being underutilized, it must be circulated to the City’s Operating Business
Units to determine whether they have a use for it before it can be declared surplus; this process can take 6 to
12 weeks. Once a site has been declared surplus, if it remains underutilized for a period of two years or
longer, it must be re-circulated to determine that it is still surplus in light of changing departmental priorities.
Certain uses take precedence (essential services and parks) for legislative and safety reasons. A database
exists that documents approximately 7,000 City-owned parcels, their uses and surplus potential. It must be
noted that in cases where sites remain vacant, or surplus, after internal circulation, there are reasons that
impede their use. If surplus sites are appropriate for affordable housing, the Corporate Properties business
unit gives priority to the Calgary Housing Company.
Current & Future Processes of Allocating Land to Non-Profits
To date, the City of Calgary’s process for identifying appropriate and suitable land for affordable housing
purposes has been employed on a case-by-case basis as groups seek City land to this end. Recognizing the
need for transparent process and criteria for partnerships vis-à-vis such groups, City Council has directed
administration in Corporate Properties to develop a set of criteria to address these issues.
As part of this work, Corporate Properties has completed a review of practices across Canada and has
developed a draft questionnaire to obtain information from groups seeking City land for development of
affordable housing. They have received feedback from housing providers in the non-profit community on their
ability to provide the information that the questionnaire asks for. The aim is to develop a consolidated policy,
and to streamline and expedite the process through a set of criteria for partnerships. These are intended to
encourage private-public partnerships and to ensure a transparent and predictable process for those
engaging in affordable housing development. Corporate Properties’ final proposal is anticipated to go to
Council later this year.
Defining Affordable Housing. We are employing the City of Calgary’s definition of housing as affordable
when it meets the needs of households earning less than $37,621 per year (65% of 2000 median income)
whose shelter costs do not exceed more than 30% of before-tax income.
It is important to note that all City-owned land represents a corporate asset. Even if land is declared surplus,
the value of the asset must be accounted for by the business unit that wishes to use the land. In the event
that the City sees merit in providing land for little or no cost to a non-profit organization for an affordable
housing initiative, internally, the Affordable Housing Section of Corporate Properties must pay for that land
from its Council-approved budget. In their efforts to optimize budgeted funds, the City is always interested in
receiving some compensation from the non-profit organization, to the extent that the viability of the housing
project will allow.
Developments across Canada
Some local governments are addressing the issue of using municipal land in a variety of ways to increase
affordability. Specific tools include: land grants, leasing land at or below market value and deferring payments
on land leases.
A number of municipalities have policies in place so that surplus land must first be considered for affordable
housing before it is allowed to be used for other purposes. In Ottawa and Toronto, these policies have
resulted in a number of municipal sites being made available for affordable housing at nominal cost through
either the transfer of land ownership or through long-term leases. In Hamilton and Waterloo, less formal
surplus land policies have resulted in the identification of surplus municipal lands and their use in the creation
of new affordable housing.
Actions Requested of the City of Calgary
In 2002, the City approved the Affordable Housing Strategy that defines its roles in contributing towards
meeting Council's priority of increasing the affordable housing supply. The City has committed land to
affordable housing projects and has successfully created new stock through the Calgary Housing Company,
non-profit and private partnerships.
It is important to recognize that while there is limited surplus municipal land that is appropriate for the
development of affordable housing, in cases where such sites exist, the City can take actions to ensure that
this use becomes a key policy priority. These actions are consistent with Council’s commitment as stated in
the Affordable Housing Development Action Plan which calls for strategic municipal contributions to
affordable housing, including identifying land suitable for development of non-market housing and leasing it to
non-profit housing providers.
To this end, City Council can:
Direct administration to:
• develop guidelines and policies to facilitate the use of surplus municipal land for affordable housing
• continue to develop a comprehensive program to identify and inventory underutilized or surplus land
and/or properties; and
• create a publicly available inventory of surplus municipal lands deemed appropriate for affordable
Implement a formal policy that:
• states that City land and/or properties declared as surplus and assessed as appropriate for
affordable housing development must be considered for that purpose before any other use is
considered, unless this undermines essential services; and
• targets portions of appropriate surplus land that could be made available each year for affordable
housing development, either by the City, or through partnerships with non-profit organizations or
private developers based on the analysis of surplus land inventory.
Differentiate the treatment of the Calgary Housing Company, non-profit affordable housing providers, and
private sector developers who contribute affordable housing in their developments.
• In the case of non-profits, the City can either lease the land or contribute it to a land bank at a
nominal cost. This contribution by the City will greatly reduce cost pressures on affordable housing
providers enabling provincial and federal grants to go further while providing the City an opportunity
to participate in the creation of affordable stock at minimal costs. In the case of a lease, the City
would also maintain ownership of the asset.
• Where private sector developers express interest in a surplus site, they should demonstrate to the
City that a reasonable portion of the privately-created housing could be used for affordable housing.
The City should make the identified surplus land available at market rates and create means of
ensuring the stock’s perpetual affordability.
Work collaboratively with the provincial and federal governments, private, non-profit and faith groups to
establish a process to identify and create an inventory of land considered for affordable housing.
• The City can play a leadership role by implementing the aforementioned. It can also encourage other
government levels to identify and make underutilized land and/or properties available for affordable
• The City can engage in social marketing targeting donations of private, non-profit and faith group
lands and properties for affordable housing projects.
• By having an infrastructure in place to publicly advertise available resources and guiding policies for
allocation, the City can consolidate the process of identifying and distributing land and properties
from other players in a transparent, consistent and predictable manner.
APPENDIX A: Examples across Canada
Appendix A presents key examples of initiatives involving policies that prioritize the use of surplus and/or
underutilized municipal land and properties for affordable housing. (Please note that the cases outlined
herein have population growth pressures, provincial policies, existing stock and needs which vary
considerably from the City of Calgary’s. They are offered as examples of what some municipalities have been
able to achieve within their particular contexts.)
The City of Toronto adopted a “Housing First” policy to consider all City land deemed surplus for affordable
housing as a priority. It is part of the responsibilities of the Affordable Housing Committee to acquire land for
affordable housing initiatives, dealing with such things as selling and leasing of City property and providing
public notice when the City-owned lands are surplus.
The City of Ottawa’s Housing First Policy was developed per Council’s direction to ensure a priority for
affordable housing on City-owned land. The policy ensures that adequate City land is set aside to meet the
anticipated program needs of the City’s affordable housing program. It ensures, at a minimum, that any sale
of surplus land to the market for residential development outside of any such program meets Official Plan
affordable housing targets.
The Housing First Policy encompasses a variety of strategies to create an adequate supply of affordable
housing including market housing, non-market housing (such as non-profits and co-ops) and subsidized
market housing (market housing with limited public subsidy to achieve a level of market affordability). These
strategies require differing levels and forms of public investment.
Investments, incentives or other considerations are not automatic simply because a project meets specific
criteria or guidelines. All project specific by-laws will specify exactly the amounts, terms and conditions of
any investments made by Council. Although permanent affordability is encouraged, given the range of
development solutions that may be introduced on a case-by-case basis, staff does not recommend adding a
blanket requirement for permanent affordability in the Housing First Policy.2
The City of London’s Affordable Housing Strategy (2005) has introduced progressive steps towards the
inclusion of surplus land policies. The strategy recommends that until there has been an increase in
affordable housing, the City of London should adopt a policy that any declared surplus land be considered
first for affordable housing before any other use is considered. This recommendation would change as they
become better able to respond to the pent-up need for affordable housing.
Further, it recommends that City of London housing staff should meet with their federal and provincial
counterparts to establish a process for identifying and accessing surplus government land which is
appropriate for housing purposes. Government land which is identified by community groups or private sector
developers as having potential for affordable housing should be reported to City of London staff to include in
discussions of land potential with Federal/Provincial officials.3
Greater Vancouver Regional District
In Section 1.4 of its Regional Affordable Housing Strategy (2006), the GVRD will set targets, with suggested
distribution by municipality and sub-region, for the number of new affordable owned and rental housing units
required by the year 2011 and 2016. It will include a requirement for regional context statements to
demonstrate how municipalities will achieve these targets, through actions including the donation or lease of
municipal lands to non-profit organizations which develop affordable housing.
The GVRD will “identify lands across the region owned or controlled by the GVRD which are suitable for the
development of affordable housing, and provide these sites to affordable housing developers at less than
market value” (Section 2.3). Further, the GVRD “will request the Greater Vancouver Transportation Authority
(GVTA) to identify surplus lands suitable for the development of affordable housing, possibly combining park
and ride sites with housing developments” (Section 2.4). Finally, the GVRD “will urge senior governments to
provide municipalities with early opportunities to purchase, at less than market value, provincial or federal
government ‘surplus’ lands being divested” (Section 2.7).
City of Ottawa. June 2005. Housing first report – Permanent affordability. Online at:
City of London. December 2005. An Affordable Housing Strategy For the City of London. Online at:
In The City of Vancouver, during the 1950s and 1960s, the City sold properties, often below market value, to
other levels of government and to non-profit organizations. Since the 1970s, the City has leased land rather
than sell it. In this way, the City makes sure that the housing can remain affordable after the lease period
finishes. Leasing land is an advantage to a non-profit housing sponsor because the cost of leasing land is
lower than the cost of an outright purchase and more social housing can be built within limited budgets.
By the end of 1998, the City had approved the lease of 124 sites for social housing, accounting for more than
7,300 units. Over one-third of all social housing in Vancouver has been built on City-owned land (City of
Vancouver 2005, 2).4
In Kelowna, the Housing Opportunities Reserve Fund was established in 2001 to encourage the development
of affordable housing by using monies generated by the City from land sales and leases, as well as other
sources, to acquire lands suited to development opportunities that would include affordable housing. Land
would then be leased or sold to builders, non-profit housing societies, developers and others to achieve
projects that include a proportion of affordable housing. The fund also gives grants in return for the provision
of affordable housing.5
There is no formula governing the allocation of proceeds to the Housing Opportunities Reserve Fund
received through the sale of city-owned land, but this will be established on a case-by-case basis.
Furthermore, the City offers land “at a discount to market value or, if in a sale by lease, by discounting the
lease value”. The amount of the discount is directly proportional to the amount of affordable housing to be
included in the development. The City also deposited 100% of the sale of its first piece of surplus land into
BC Housing notes that for a similar program to function elsewhere, Councils must be made aware that it is
advantageous to attract affordable housing within city boundaries to support a mixed community, and that
municipal action is necessary if such housing is to be built.
Other municipalities can replicate this initiative. Conditions needed for success include strong council and
community support, and a significant source of financial funding such as a large piece of surplus land or the
opportunity for a significant contribution through changing zoning on a large project.
The City of Edmonton is currently developing a “Housing First” policy to provide surplus lands for the
development of affordable housing. Policies would establish criteria under which all surplus City-owned
property could be made available on favorable terms, through sale or lease at an affordable price (ideally for
nominal consideration). The City is encouraging similar policies being developed by others as there are public
agencies such as the school board or the provincial and federal governments hat also have unused or
Halifax Regional Municipality
Halifax Regional Municipality has a policy of donating land for affordable housing projects. There is an
application process that a non-profit organization must go through in order to request that HRM sell them the
land at less than fair market value. The Municipality can also sell land to a non-profit at less than market
rates, and has done so in order to help promote the social aspect of the enterprise. This can include the
municipality financing the sale through deferred payments (i.e., payments made over time).
In the event that more than one non-profit is interested in the property, preference is given to those non-
profits that are fulfilling a core municipal mandate. Thus, while housing organizations have received
donations of HRM property, in theory the donation of land to a recreation group would take precedence over
a housing group, as housing is a considered a provincial responsibility (HRM 2004).6
City of Vancouver. December 2005. City of Vancouver Housing Centre: An Overview. Online at:
City of Kelowna. June 2007 Housing Opportunities Reserve Fund. Online at: http://www.city.kelowna.bc.ca/CM/Page1023.aspx;
Government of British Columbia. May 2005. Local Government Guide for Improving Market Housing Affordability in British Columbia.
Online at: http://www.housing.gov.bc.ca/housing/affordable/chapter4_casestudy10.htm.
Halifax Regional Municipality. March 2004. Municipal Land Use Policy & Housing Affordability. Online at:
Canadian Chamber of Commerce
The Chamber’s 2005 Resolutions on Affordable Housing and Portable Housing Allowances recommends that
municipalities consider giving priority to investors who intend to build affordable housing, when government
lands are available for purchase at market value. Institutions responsible for selling government surplus land
should show greater flexibility by accepting conditional offers with a term of one year instead of six months,
and by requiring only a nominal deposit on the land (less than the current ten per cent).
The Chamber suggests municipalities make the following changes to increase the availability of surplus land
for developers of affordable housing:
1. Give priority to developers planning to build affordable housing by making surplus land available
at market rates;
2. Give its agencies in charge of selling surplus land the flexibility to accept one year conditional
offers from developers of affordable housing;
3. Be flexible on conditions such as financing and the amount of deposit required for those building
Ottawa Chamber of Commerce & Toronto Board of Trade. 2005. Affordable Housing & Portable Shelter Allowance - Policy Resolution
Joint Submission. Online at:
Policy Analyst, Poverty Reduction Coalition
For additional copies of this report, please contact us at (403) 410-2573
or visit www.calgaryunitedway.org
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supported by United Way of Calgary and Area