Boosting Our Housing Market with Strategic Initiatives

Despite rising housing costs, Medicine Hat continues to be one of the most affordable communities in Canada, with average home prices around 4.5 times after-tax household income, compared to the Canadian average of 10 times. Yet, the supply of new listings has not kept up with demand, leading to rapidly increasing prices for both home buyers and renters at a time when inflation is increasing the cost of other goods. 

Addressing Housing Needs for All 

Unfortunately, the impact of our current housing supply dynamic is felt disproportionately among lower-income residents. One key issue is the lack of medium-density housing options, such as duplexes, triplexes, row housing, small apartments, and other small-scale multi-unit housing. These types of housing have diminished across North America since the 1950s in favor of single detached homes and larger apartment complexes. 

To balance market demands, supply-side dynamics, and the needs of our community, the City of Medicine Hat has introduced several initiatives. These initiatives address housing needs from various angles, using legislative and financial tools such as new development incentives, changes to zoning and permitting, land-use optimization, and servicing upgrade strategies. 

The Housing Infill and Redevelopment Incentive Program (HIRIP) 

To demonstrate our commitment to real estate developers and residents, the City is offering targeted housing infill and redevelopment incentive. This incentive targets areas where the city has invested in the necessary infrastructure to support housing development, such as utilities connections and road access. HIRIP aims to provide more medium-density housing options, diversify the housing market, and enhance the value of the city's urban areas. 

From a developer’s perspective, infill and redevelopment projects often come with additional costs and challenges, making incentives like HIRIP crucial for urban redevelopment. The program provides financial assistance to local developers and property owners to encourage the rapid development and construction of infill and redevelopment properties. 

Incentives to Spur Development 

Owners of infill properties can apply for incentives of $15,000 per dwelling unit, up to a maximum of $750,000 for new residential development on a single site. The total funding for this program is set at $1,400,000. This financial support not only incentivizes these developments but also reduces the associated risks and increases their attractiveness as investments, encouraging the rapid development and construction of infill and redevelopment properties.

You might wonder, if there's a demand for this type of housing, why is the incentive needed? From a developer’s perspective, infill and redevelopment projects often come with additional costs and challenges. Infill and redevelopment projects require additional capital, time, and resources versus comparable greenfield construction projects. These infill and redevelopment properties require some sort of demolition and/or land preparation before construction can begin, adding to the complexity and cost of developments. The more challenging development landscape, including zoning, permitting, and demolition, further complicates these projects. 

Benefits Beyond Development 

The benefits of this incentive program extend beyond developers and home builders, addressing key housing needs within our community. By increasing the housing supply, especially medium-density options, we're fostering a more competitive real estate and rental market, which should lead to reduced housing costs for residents. This comes from diversifying the housing market, allowing multiple options and housing types for home buyers and renters alike. Additional benefits include the generation of new high-paying jobs in the construction sector, stimulating the local economy, and establishing new tax revenues for the city, which can be allocated towards essential services. 

Stay tuned as Medicine Hat continues to implement these strategic initiatives to enhance our housing market, ensuring a more vibrant, inclusive, and affordable community for all residents.