Monday, January 12, 2026
As we move through 2026, Calgary’s housing market continues to face significant pressure from population growth, rising construction costs, and a persistent shortage of affordable options. The city’s population is expected to surpass 1.5 million in the coming years, driven by migration and economic diversification into sectors like tech and renewables. This has led to increased demand for rental and ownership housing, especially in urban infill areas where space is limited and development must be smart and efficient. For developers, building affordable housing—units priced or rented at below-market rates for low- to moderate-income households—presents both a social good and a business opportunity. However, high land prices, labor shortages, and material costs (projected to rise modestly by 2-4% in 2026) can make projects challenging to pencil out.
The positive side is that governments at all levels are stepping up with incentives to bridge these gaps. These programs aim to increase housing supply while ensuring affordability, often defined as costing no more than 30% of a household’s income. Federal initiatives like the CMHC Affordable Housing Fund provide loans and grants, provincial supports offer funding for rentals, and the City of Calgary’s programs deliver cash incentives for conversions and new builds. When used strategically, these can reduce project costs by 20-50%, making affordable housing viable and even profitable through long-term rental yields or sales premiums.
This guide is designed for Calgary developers—whether you’re a private firm, non-profit, or partnership—looking to navigate these incentives in 2026. We’ll break down the key programs, eligibility requirements, funding amounts, application tips, real-world examples, how to stack incentives for maximum impact, common challenges with solutions, and the outlook for the year ahead. By understanding these tools, you can turn potential obstacles into advantages, delivering more units while maintaining healthy margins. Let’s dive in.
Understanding the Need for Affordable Housing Incentives in Calgary
Before exploring the incentives, it’s worth noting why they’re so crucial in 2026. Calgary’s housing crisis is well-documented: Rental vacancy rates hover around 4-6%, with average rents for a one-bedroom apartment exceeding $1,800 monthly. Homeownership is out of reach for many, with median prices over $500,000. Infill developments—replacing older single-family homes with multi-unit structures like duplexes or row homes—help, but costs for land, permits, and construction can exceed $500 per square foot.
Government incentives address this by subsidizing the “viability gap”—the difference between market-rate development costs and what affordable projects can afford. They encourage private developers to include affordable units (e.g., 20-30% of a project at 80% of market rent) in mixed-income builds, ensuring broader access. Programs also prioritize sustainability, with bonuses for energy-efficient or net-zero features. For developers, this means lower risk, faster approvals, and access to low-cost capital, ultimately leading to better returns through stable occupancy and community support.
Incentives aren’t handouts—they’re investments. For every dollar of public funding, they leverage 3-5 times in private capital, as seen in Calgary’s recent office-to-residential conversions. Now, let’s look at the main programs.
1. CMHC Affordable Housing Fund & Seed Funding
The CMHC Affordable Housing Fund is one of the most robust federal programs for 2026, providing forgivable loans, contributions, and seed funding to kickstart projects. It targets new construction or major renovations that create affordable rental or ownership units.
Typical Funding Available: Seed funding up to $100,000 for planning; main fund offers $50,000–$200,000+ per unit in forgivable loans or grants, depending on affordability depth (e.g., units at 30% of median income qualify for more). Total project funding can reach millions. Eligibility: Open to private developers, non-profits, Indigenous organizations, and municipalities. Projects must include at least 20% affordable units for 20-25 years, with priority for deeply affordable (below 80% market rent) or mixed-income builds. Best For: Multi-family rentals, co-ops, and infill developments with affordable components. Application Tips: Apply through CMHC’s portal with a detailed business plan, affordability commitments, and pro forma showing viability. Seed funding is non-repayable for feasibility studies; main fund requires matching private investment. Deadlines are quarterly, so plan for early 2026 submissions. Real Example: In 2025, a Calgary developer used CMHC funding for a 100-unit mixed-income apartment in the Beltline, receiving $8 million in forgivable loans. This covered 30% of costs, allowing 25% affordable units while keeping the project profitable through market-rate rents. Pros: Flexible for various project sizes; forgivable portions don’t need repayment if affordability is maintained. Cons: Strict reporting on affordability; competition is high, so strong applications are key. Why It’s Valuable in Calgary: With infill lots expensive, this fund helps offset land costs, making downtown or inner-city projects feasible.
Developers should note that CMHC also offers mortgage insurance premium reductions for buyers of affordable ownership units, adding indirect value by making sales easier.
2. City of Calgary Development Incentive Program (DIP) – Affordable Housing Bonus
Calgary’s DIP is a local powerhouse for 2026, providing cash incentives for projects that convert or build with affordable housing in mind. The program, expanded in recent years, focuses on downtown and inner-city areas to boost density and vibrancy.
Typical Funding Available: Up to $75 per square foot for converted space, with bonuses for affordable units (e.g., additional $10-20 per sq ft for 20%+ affordable). Project caps at $15 million, but total program funding exceeds $200 million. Eligibility: Projects in designated areas (downtown core, Beltline) that repurpose at least 50% of space for residential, with 10-30% affordable units. Open to private developers and partnerships. Best For: Office-to-residential conversions, mixed-use infill, and new multi-family builds. Application Tips: Submit through the city’s online portal with plans showing affordability commitments (e.g., rent caps for 20 years). Pre-approval meetings with city planners speed things up. Applications are ongoing, but budget allocations may prioritize early submissions. Real Example: The Barclay Centre conversion in 2025 received $10 million in DIP funding, creating 166 homes with 27% affordable. Developers reported this covered the viability gap, turning a marginal project into a profitable one with strong rental yields. Pros: Direct cash reduces upfront costs; fast-tracked approvals for qualifying projects. Cons: Limited to specific zones; affordability requirements must be maintained long-term. Why It’s Valuable in Calgary: Infill land is scarce and pricey; DIP makes conversions attractive, adding housing supply quickly.
The program also encourages green features, with extra bonuses for energy-efficient designs, tying into broader sustainability goals.
3. Calgary Affordable Housing Reserve Fund & Partnership Grants
The City of Calgary’s Affordable Housing Reserve Fund is a dedicated pool of money for projects that deliver affordable units, often through grants, land donations, or fee waivers.
Typical Funding Available: $500,000–$5 million+ in grants or equivalent land value per project. Eligibility: Developers partnering with the city or non-profits for projects with at least 20% affordable units. Priority for rentals serving low-income or vulnerable groups. Best For: Purpose-built rentals, supportive housing, and community-led infill. Application Tips: Apply via the city’s housing division with a proposal outlining affordability, timelines, and community benefits. Partnerships with organizations like Habitat for Humanity boost chances. Funding is competitive, so apply early in 2026 cycles. Real Example: In 2025, a partnership grant helped build 80 affordable units in Ogden, with the city providing land worth $2 million. Developers leveraged this to secure additional financing, achieving break-even in 5 years through stable rents. Pros: Flexible use (grants or land); supports innovative models like co-housing. Cons: Requires strong community ties; funding limited by annual budgets. Why It’s Valuable in Calgary: Reduces land acquisition barriers, key in high-cost urban areas.
This fund often works with DIP for stacked benefits on larger projects.
4. Alberta Affordable Housing Partnership Program
Alberta’s provincial program provides funding for projects that increase affordable supply, focusing on rentals and ownership for low-income households.
Typical Funding Available: Grants up to $100,000 per unit for deeply affordable rentals. Eligibility: Non-profits, municipalities, and private developers with affordability commitments (e.g., 20 years at below-market rates). Best For: Multi-family rentals and supportive housing in urban areas. Application Tips: Submit through Alberta’s housing ministry with financials and impact assessments. 2026 funding rounds open quarterly; emphasize local need data. Real Example: A 2025 Edmonton project (similar to Calgary potential) received $5 million for 60 units, allowing rents 30% below market. Developers reported improved feasibility through grant stacking. Pros: High per-unit funding; supports vulnerable groups. Cons: Competitive; requires long-term affordability locks. Why It’s Valuable in Calgary: Complements city programs for larger scale.
The province is expanding this in 2026 to address shortages.
5. Federal Rapid Housing Initiative (RHI) & Co-Investment Fund
The federal RHI and National Housing Co-Investment Fund (NHCIF) offer quick funding for affordable projects.
Typical Funding Available: $50,000–$200,000+ per unit in forgivable loans/grants for RHI; NHCIF provides low-interest loans with contributions. Eligibility: Projects with 20%+ affordable units, fast timelines (12-18 months). Best For: Rentals and mixed-income infill. Application Tips: Apply via CMHC with shovel-ready plans. RHI favors modular/prefab for speed. Real Example: Calgary’s 2025 RHI projects added 300 units with $15 million funding, focusing on modular builds for quick delivery. Pros: Fast funding; forgivable portions. Cons: Tight deadlines; affordability for 20 years. **Why Valuable: Accelerates infill supply.
6. GST/HST Rebate for New Affordable Rental Housing
This federal rebate refunds 100% of GST/HST on new purpose-built rentals with affordable components.
Typical Savings: 5–13% of construction costs (hundreds of thousands for large projects). Eligibility: New rentals with rents below thresholds. Best For: Purpose-built apartments. Application Tips: Claim through CRA post-construction. Real Example: A 2025 Calgary rental project saved $1.2 million, making units affordable. Pros: Automatic savings. Cons: Only for rentals. Why Valuable: Direct cost cut.
7. Municipal Development Charges & Levy Waivers
Calgary waives or defers charges for affordable projects.
Typical Savings: $50,000–$500,000+ per project. Eligibility: 10–30% affordable units. Best For: Infill multi-family. Application Tips: Negotiate during permitting. Real Example: Waivers helped a 2025 infill add 20 affordable units. Pros: Upfront relief. Cons: Tied to affordability. Why Valuable: Lowers barriers.
8. Low-Cost Financing Through CMHC & ATB Financial
CMHC offers low-interest loans for affordable projects; ATB provides similar.
Typical Benefit: Below-market rates, longer terms. Eligibility: Affordable components. Best For: All types. Application Tips: Apply early with pro forma. Real Example: $10 million loan helped a 2025 project. Pros: Reduces debt service. Cons: Reporting required. Why Valuable: Improves cash flow.
9. Green & Net-Zero Incentives for Affordable Housing
Federal/provincial green grants for efficient projects.
Typical Incentives: Extra $5,000–$20,000 per unit. Eligibility: LEED/net-zero standards. Best For: Sustainable builds. Application Tips: Incorporate in design. Real Example: 2025 project got $2 million extra. Pros: Dual benefits. Cons: Added design cost. Why Valuable: Future-proofs.
10. Tax Credits & Depreciation Benefits
Accelerated depreciation and credits for affordable rentals.
Typical Benefit: Reduced taxes. Eligibility: Rental projects. Best For: Long-hold. Application Tips: Consult tax pros. Real Example: Saved $500,000 over 10 years. Pros: Ongoing savings. Cons: Complex. Why Valuable: Boosts returns.
How to Stack Incentives for Maximum Savings
Stacking—combining multiple programs—is key to profitability. For example, use CMHC loans for financing, DIP grants for construction, and GST rebate for taxes. A $20 million project could save $5-10 million this way.
Tips: Start with a feasibility study; align affordability levels; document everything.
Challenges & Tips for Success in 2026
Challenges: Long approvals, affordability locks, competition.
Tips: Partner with non-profits, hire consultants, focus on mixed-income.
Outlook for 2026: A Strong Year for Affordable Housing Developers
2026 promises expanded funding and streamlined processes, with Calgary’s supply focus driving opportunities.
These incentives make affordable housing a smart business move.
For developers ready to dive in, teaming up with experienced local builders can streamline the process. Good Earth Builders, with over 23 years in Calgary and 846 completed projects, specializes in sustainable, multi-family affordable housing. Their commitment to planting 10 trees per job adds environmental value. Contact them for a consultation on leveraging 2026 incentives for your next project.
