Notice of motion aims to restrict short-term rentals in city-supported secondary suites​on February 11, 2025 at 8:07 pm

A Calgary councillor wants the city to restrict secondary suites that received funding through a city-run program from operating short-term rentals.

A notice of motion from Ward 5 Coun. Raj Dhaliwal calls on administration to bring forward a policy framework later this year that would prevent short-term or vacation rentals from operating in basement suites that were built or upgraded with money from the city’s secondary suite incentive program.

His motion unanimously passed a technical review at Tuesday’s executive committee meeting, meaning council will debate and vote on the proposal later this month.

If approved, the restrictions would apply “for a pre-defined period of time” to homeowners who received funding from the city’s secondary suite incentive program, according to Dhaliwal. His motion asks the city to bring forward the policy framework by May 31.

The secondary suite incentive program, which council approved last spring, provides a grant up to $10,000 to homeowners to build and register their secondary suite with the city. Residents can also receive an additional $5,000 if their suite meets requirements for certain accessibility standards, and another $1,250 for energy efficiency improvements.

Backyard suites are not eligible to receive funding from the program — only suites that are attached to the main home.

The city projected last spring that the program would net up to 3,000 new secondary suites in its first year, which would represent a 50 per cent increase in registrations over 2023 numbers. Council allocated $4 million for the program in the city’s last two budgets.

There are more than 13,500 registered secondary suites in Calgary, according to the city.

The incentive program was developed to create more housing units, said Dhaliwal, but he noted an unintended consequence could be homeowners converting their completed secondary suites into short-term rental businesses.

“I don’t want to see someone taking advantage of this program and then once they have their secondary suite done, convert that into a short-term rental,” he said after Tuesday’s meeting.

“That’s what we want to stop.”

If council approves Dhaliwal’s motion later this month, the policy framework would also require incentive program applicants to acknowledge and agree to the restriction as a condition of receiving funding.

Dhaliwal said he wants the city to establish a mechanism to monitor and enforce compliance.

His motion also comes after council approved a new approach to regulating short-term rentals, in response to a growth in Calgary’s vacation rental rental market since 2017. According to a joint study by the city and University of Calgary researchers, there are more than 5,000 short-term rental listings throughout the city.