Calgary's Housing Budget Faces Scrutiny Over Developer Incentives
Calgary city council engaged in intense debate Thursday morning during marathon 2026 budget meetings, with the city's various housing programs coming under detailed examination. Housing represents one of administration's four key priorities in next year's budget, which features $4.6 billion in operating expenses and $3.6 billion in capital expenditures.
Office Conversion Program Draws Criticism
The downtown office-to-residential conversion incentives faced particular scrutiny from councillors, with some equating the program to corporate welfare for developers. The initiative provides building owners up to $75 per square foot to transform vacant office properties into residential spaces.
Chief housing officer Reid Hendry and downtown strategy director Thom Mahler faced tough questions about the program's justification. Since 2021, the city has committed more than $200 million to the incentive program, supporting 21 different conversion projects that promise to deliver 2,688 housing units upon completion.
Mahler defended the program, stating the primary goal is to restore downtown property values that declined dramatically over a decade ago. "That is the number-one metric I'll hold myself accountable to: Are we moving the needle on property value?" he told council.
Financial Impact and Council Concerns
According to city analysis, the $200 million invested so far—which includes $50 million in federal housing accelerator funds—has generated a four-to-one return on investment and a seven-to-one overall economic impact. Mahler emphasized that completed conversions consistently generate higher property tax revenue as residential properties compared to their previous status as declining office assets.
However, Ward 13 Coun. Dan McLean expressed skepticism about the program's value proposition. "If it really was a seven-times multiplier, I think the private sector would be all over it," he argued, echoing concerns from other councillors about the appropriateness of what they characterized as corporate welfare.
The city's housing-related budget items include $40 million to continue the downtown conversion incentives and $26.2 million for a 260-unit affordable housing project in Southview. Mahler indicated that achieving the city's target of replacing six million square feet of vacant office space by 2031 would require approximately $450 million in total investment.
So far, six conversion projects have been completed, with funding only allocated after conversions are finished. The Barron Building office conversion project, highlighted during discussions, has faced significant cost overruns according to September 2025 documentation.
