On Wednesday, the City of Calgary announced the creation of a new Downtown Density Bonusing Offset Program that will "remove barriers and provide a financial incentive to encourage the creation of more than 1,500 new homes in the heart of the city."
Existing policies set a "base density" for sites depending on their zoning. The new program will encourage new high-density residential development in downtown Calgary by allowing developers to go beyond that base density. "Density," in this case, is calculated using a metric called Floor Area Ratio, the ratio between building square footage and the square footage of the land. The higher the density, the higher the FAR.
To secure bonus density, developers will have to make contributions to the City. Those contributions include creating new affordable housing or providing money to the City for new affordable housing; providing on-site public amenities such as parks, plazas, cultural space, or public art; or contributing money towards Council-approved funds such as the Beltline Community Investment Fund (BCIF) and Downtown Improvement Fund.
Under the Downtown Density Bonusing Offset Program, the City will then reimburse the developer for the full amount of the contribution, subject to available funding. According to the City, mixed-use projects with non-residential components will also be eligible, but the reimbursement amount will be prorated at the discretion of the Director of Downtown Strategy, the team behind the City of Calgary's highly-successful office conversion incentive program.
The new program only applies to sites within the Greater Downtown Plan Area, including the Downtown Core, Downtown West, Eau Claire, Chinatown, East Village, and Beltline communities.
The Downtown Density Bonusing Offset Program area. / City of Calgary
The City will begin accepting applications on Sunday, June 1, and successful applicants will enter into a funding agreement with the City that will "finalize any additional requirements such as development permit timelines, building permit timelines, construction schedule, reporting requirements, project completion, and reimbursement."
Applicants with a development permit issued or who have started building construction before May 1, 2025 will not be eligible.
The reimbursement will cover portions of projects that are included in the issued building permit and be paid out after construction has been completed and the conditions of the funding agreement have been met, the City says.
Similar density bonus programs already exist in many other cities in Canada, such as in British Columbia, although many of those programs do not have the reimbursement component.
"Downtown is one of Calgary's fastest growing communities, and Calgarians are embracing the lifestyle," said Director of Downtown Strategy Thom Mahler in a press release. "This program is an incredible opportunity to build high-density development that fits the area, benefits the entire city and creates homes with easy access to jobs, transit, arts, culture, and exciting public amenities."
"With the explosive growth we are seeing here, it's clear that Calgary needs to build more homes," added Mayor Jyoti Gondek. "Building homes downtown ensures we're meeting demand, boosting affordability, providing options for Calgarians, and creating a more connected and livable city for everyone."
