The Connaught Below Market Housing project in Jasper, Alta. Complex development regulations, compounded by high construction costs, have caused supply to lag behind demand.Leanne Pelletier/Leanne Pelletier/Municipality of Jasper
Nestled in the Athabasca River valley, amidst Alberta’s Rocky Mountains, the town of Jasper’s picturesque charm attracts throngs of visitors each summer. To protect the pristine wilderness surrounding the town, a stringent set of regulations cap Jasper’s footprint, and prevent man-made structures from dominating the landscape.
Safeguarding the features that make Jasper an attractive destination at the heart of a national park, however, creates significant pressures on the housing market, as the town’s complex development regulations, compounded by high construction costs, have caused supply to lag behind demand.
An analysis commissioned by the municipality in 2021 found a shortage of 759 dwellings in the roughly 5,000-resident mountain town.
Consequently, Jasper’s rental vacancy rate has remained near zero over the last two decades – but rental rates didn’t accelerate significantly until 2013.
Between 2005 and 2013, the monthly rent for a bachelor unit, the most common type of rental in Jasper, increased by 34 per cent. By contrast, the latest data available shows a 143-per-cent increase between 2013 and 2023, a period over which the monthly rental rate for bachelor units skyrocketed from $692 to $1,683.
As housing need was exacerbated by the Jasper wildfire complex, which destroyed more than 600 dwellings in 2024, Alkarim Devani, CEO and co-founder of MDDL, a real estate development consultancy based in Calgary, saw an opportunity to leverage his company’s expertise and help mitigate the persistent challenges facing Jasper.
“Rebuilding a single-family home is not cheap,” Mr. Devani says. “So when you’re talking about a significant number of residents who are trying to figure out what’s next, we saw a unique opportunity in helping residents find a way to create scale, systemization, and leverage technology.”
The 40-unit rental apartment building is expected to be completed before the end of the year, after 18 months of construction and eight years in the works.Leanne Pelletier/Leanne Pelletier/Municipality of Jasper
Backed by a $250,000 grant from the Alberta Real Estate Foundation, MDDL and the Municipality of Jasper’s partnership, called the Jasper Housing Enablement Initiative, aims to streamline the construction of “missing middle” housing; that is, a range of dwelling types comprising everything from accessory dwelling units (ADUs) in backyards and basements, to row houses, multiplexes and low-rise apartment buildings.
The initiative entails access to MDDL’s geographic information system (GIS) tool, which uses lot characteristics such as size and zoning information to identify the development potential of any given parcel in the town. To complement this, MDDL is developing a design catalogue for multiunit dwellings that aligns with current legislation, alongside cost estimates quoted by local builders.
“Streamlining the development process and mitigating the risk for everyone involved is going to make it more accessible for people to figure out how to build more homes in Jasper,” Mr. Devani says.
Combined, the Housing Enablement Initiative is set to advance the municipality’s Housing Action Plan, whose purpose is to accelerate the supply of housing at an annual rate of 17 per cent.
“We’re hoping that with the introduction of more rental units there would be a decrease in rental rates,” says Leanne Pelletier, the Municipality of Jasper’s housing manager, adding that increasing the supply of housing should also broaden the opportunities Jasper tenants have to access adequate housing.
“Because housing has been in such high demand in Jasper for so long, people are living wherever they can; so maybe you have four people in a bachelor suite, which isn’t necessarily safe or appropriate,” she says. “By having more ADUs, more rental properties, and more homes to purchase, people can move out of undesirable places.”
Damage to a residential area in Jasper in September, 2024.Sarah Palmer/The Globe and Mail
While the Jasper Housing Enablement Initiative should reduce soft construction costs – which typically amount to 20 or 30 per cent of a project’s total – the cost of land, equipment, materials, labour and development charges, relative to profit margins, can make or break a building endeavour, in Jasper and elsewhere.
“The acceleration of approvals and permitting is very important because it helps reduce the time and financing costs,” says Fred Cassano, partner and national real estate leader at PwC Canada. “But hard costs, together with municipal charges, really determine whether a project goes ahead or not.”
Hard costs involve equipment, labour and materials. When labour and equipment are in short supply, costs rise. The same happens with building materials. Because hard costs are largely fixed, and lenders require builders turn a profit, a project’s viability is limited by local incomes.
With a median annual income of $63,600, less than 50 per cent of renters in Jasper can afford to pay more than $1,500 per month in rent. But achieving this price point requires more than reducing the soft costs associated with permitting and designing a housing project.
According to Scott Fash, CEO of the Building Industry and Land Development Association of Alberta, in the aftermath of the Jasper wildfire, developers have shown interest in building much-needed rental housing in the mountain town.
“There’s a tremendous opportunity to leverage everything that’s going on right now with some of the programs and incentives that exist across the country to finally address some of the housing shortage challenges you have in Jasper,” Mr. Fash says, pointing at CMHC’s MLI Select, a mortgage loan insurance product that offers preferential rates to qualifying multifamily rental projects meeting a set of affordability, accessibility, and energy efficiency requirements.
“I’m excited to see the Municipality of Jasper has engaged a group like MDDL,” he says. “Because identifying what lands are going to be available, and what the rules are going to be, is key to getting more people building more affordable rental and home ownership opportunities.”
Wildfire swept through the town of Jasper in July, 2024.Sarah Palmer/The Globe and Mail
Nevertheless, elevated land costs, compounded by limited access to qualified labour and building materials in such a remote location as Jasper add significant pressure on construction costs, making it difficult to build new rental homes at a price-point Jasper renters can afford.
To meet the housing needs of renters already spending more than a third of their income in rent, at least 400 homes are needed, a 2021 report estimated. At the time, consultants estimated Jasper’s median market rate at $1,800.
“The market in Jasper is not going to deliver enough supply to get rents under $1,500 a month,” Mr. Fash says. “You need an incentive or a structure that provides that.”
One way to achieve the affordability levels Jasper tenants need is to make land available at a below-market rate to builders committed to creating affordable rentals, Mr. Fash suggests. “The other alternative is the government could own the land, hire a builder to construct the units and then manage the properties.”
Jasper’s Housing Action Plan considers these options, and proposes developing a land acquisition strategy for community housing, which coupled with government funding, should “ensure a portion of Jasper’s finite land assets remain available for community housing, and are not exhausted through speculative purchases by developers or large corporations.”
The initial phase of the municipality’s first housing endeavour, the Connaught Below Market Housing Development, 40-unit rental apartment building, is expected to be completed before the end of the year, after 18 months of construction, and eight years in the works.