The City of Calgary is facing a potential loss of $129 million in federal housing grants as officials reconsider their approach to blanket rezoning, according to the Canada Mortgage and Housing Corporation.
Federal Funding in Jeopardy
The CMHC issued a stark warning on Tuesday that Calgary's affordable housing initiatives could suffer significantly if the city abandons its comprehensive rezoning strategy. The $129 million in frozen funds represents critical financial support for developing affordable housing units across the municipality.
This financial standoff comes at a time when Calgary, like many Canadian cities, is grappling with housing affordability challenges. The federal funding was earmarked for projects that would increase housing density and availability for low to middle-income residents.
Rezoning Review Creates Uncertainty
City council's decision to re-examine blanket rezoning policies has created uncertainty about Calgary's commitment to the density requirements tied to federal housing money. The November 26, 2025 announcement highlights the tension between local planning decisions and national housing strategies.
Blanket rezoning, which allows for higher density development across broader areas of the city, has been a cornerstone of the federal government's approach to addressing housing shortages. The CMHC's position indicates that alternative approaches might not qualify for the same level of funding support.
Broader Implications for Housing Development
The potential loss of $129 million could have far-reaching consequences for Calgary's affordable housing pipeline. Multiple projects currently in planning stages may face delays or cancellation without this crucial financial backing.
Local housing advocates have expressed concern about the timing of this funding uncertainty, noting that Calgary continues to experience population growth and increasing pressure on its housing market. The outcome of the rezoning review will likely determine whether the frozen funds become permanently unavailable or can be redirected to support the city's housing priorities.
As the debate continues, city officials must balance local planning preferences with the financial realities of affordable housing development. The decision could set a precedent for how other Canadian municipalities approach similar funding opportunities in the future.
