It’s the Calgary citywide rezoning / Housing Accelerator Fund (HAF) story that won’t go away.

In the latest turn of events, city administration and councillors received a letter late Monday that has been interpreted by some as the strongest signal yet that the feds may withhold funding should Calgary repeal its Rezoning for Housing bylaw.

It comes as city administration provides a report on the potential financial impact of citywide rezoning. Citywide rezoning was initiated back in August 2024, allowing the RCG land-use designation on the vast majority of previously single-family zoned parcels in Calgary. A public hearing date is set (March 23), however, for the potential repeal of the citywide rezoning bylaw.

The statement provides some clarity over the expectations from Canada Mortgage and Housing Corporation (CMHC) as it pertains to Calgary allowing four units by right and not reintroducing so-called “exclusionary zoning.”

“In order to remain compliant with the agreement, any updated zoning must not reintroduce exclusionary (single family only) zoning, allow for at least four units on a lot across the city without additional approvals, and must not reintroduce approval processes or other barriers that slow down development,” their letter reads.

Ward 4 Coun. DJ Kelly said he read this as a ‘no’ from CMHC on future funding should Calgary eliminate citywide rezoning after a public hearing in March.

“Throughout this entire process, we’ve been waiting to hear back from the… federal government, about what their take is on it. It will be a yes. Will it be a no?” Kelly told reporters on Wednesday.

“It looks like we have an answer. It looks like the answer is no. So now it’s incumbent upon council to figure out we want, what we want to do with that information.”

Kelly acknowledged that the decisions are separate, and that a decision on citywide rezoning is a planning decision, and not fettered by potential financial impact to the City of Calgary.

Still, he recognized that while the decision is separate, it could impact nearly a billion dollars in federal housing funding.

“I do think that there are things that we can do in terms of tweaking, how we adjust this, how we remove those problematic lots from the register, while still remaining eligible for the funding,” he said.

“It just makes our job harder to do.”

Later in the meeting, when presented with the report on the potential financial impact, Calgary Mayor Jeromy Farkas thanked administration for providing a “worst-case scenario” so they went into the conversation with eyes wide open.

“I think based on the certainty that we’ve had from previous meetings, indications at the political level, that this worst-case scenario is not before us,” he said.

Farkas also said the potential financial impact wasn’t a planning matter. It could be considered during budget or in strategic meetings as an input, but not legally as a part of the planning decision on rezoning.

Different interpretations of the CMHC statement

The interpretation of the CMHC statement does tend to fall along the lines of those in favour or against the repeal of citywide rezoning.

Ward 13 Coun. Dan McLean said that he didn’t interpret it in the same way that Coun. Kelly did.

“No, that’s not my interpretation. Nowhere in that agreement does it say that we have to tie that funding, (or that ) it’s being tied to exclusionary zoning or four units as a right.

“It doesn’t say anywhere in there, in my interpretation of that agreement.”

According to the Amended HAF Contribution Agreement, posted to the City of Calgary’s website, there’s no specific mention of four units by right or returning to exclusionary zoning as a requisite for obtaining funding.

It does mention undertaking downtown zoning bylaw amendments, streamlining approvals to increase housing supply, undertake city-initiated redesignations, promoting missing middle land use districts and enabling housing growth in established areas.

The contract does also have housing targets: 10,627 units in close proximity to rapid transit, 16,156 missing middle housing units, and 4,707 other multi-unit housing units.

Mayor Farkas said that he’s been in contact with his federal counterparts, including reassurance from the Prime Minister, that they recognize Calgary has been a leader in housing nationwide.

“Obviously, the federal government would like to see much more density, much more zoning applied across cities, across from coast to coast to coast. But the local context really matters, and also the written words of the agreement really matter,” Farkas said.  

“So, when you look at the housing accelerator fund agreement that’s been posted online at the City of Calgary website, it doesn’t speak to four units by right. It does not speak to city wide zoning approaches. What it does speak to is specific outcomes.”

CMHC, as they’ve said in the past, told LWC they expect municipalities to fulfill their agreements.

“This includes Calgary’s commitments to eliminate exclusionary zoning and accelerate approvals. If commitments aren’t met, or are reversed, Housing Accelerator Fund (HAF) funding is at risk. Compliance outcomes under the Housing Accelerator Fund vary based on the nature and severity of non-compliance. This ranges from funding reductions for partially unmet commitments to full agreement cancellation where core obligations are not fulfilled,” they wrote in response to questions.   

“We continue to closely monitor Calgary’s deliberations ahead of a decision on Calgary’s HAF funding and look forward to working with Calgary on this in the coming weeks. Any decision will be shared publicly.”