The oil town of Cold Lake is offering developers up to $7,500 per unit to build new rental apartments in the northeastern Alberta city. The cash offer is meant to help with "the housing crunch our community is facing," said Cold Lake Mayor Craig Copeland.
Under the policy developers can receive a grant of $5,000 per unit when building a three-to-12-unit rental project, or $7,500 per unit for building one that has 13 or more units. For a 100-unit building, a landlord could pocket $7.5 million in a community with a near-zero rental vacancy rate. There are no rent controls in Alberta.
In order to qualify for this program, developers must meet certain criteria.
"The application for the incentive program must be submitted prior to construction and the development must be a new project," Copeland said. "The project must be completed within 24 months of approval of the incentive and the units are required to remain as rental property for a minimum of five years, otherwise the grant must be paid back. The grant will be paid to the developer only upon receiving formal approval for occupancy of the units."
The subsidy isn't automatic. Applications for the incentive program will go to administration for review, then to council for a decision.
While the program is new to Cold Lake, other municipalities have long used such programs to encourage rental-unit construction.
The City of Edmonton, for example, is still offering home owners up to $20,000 for building or upgrading secondary, garage or garden suites.
from Western Investor June 2013
