The Town of Banff is tackling its severe rental housing shortage with a six-point strategy that includes cash incentives for homeowners, taller buildings, and a move to scrap parking requirements for new housing. The push comes as the mountain community faces a rental vacancy rate of less than one per cent and a shortage of 700 to 1,000 homes in a town with roughly 4,500 housing units total.
In May 2026, the federal government handed Banff an extra $320,000 through the Housing Accelerator Fund, bringing total funding under the program to $4.98 million. The money rewards Banff for already issuing 253 building permits, topping the 250 new homes required under its agreement with Ottawa, according to Alison Gerrits, the town’s director of community services.
Banff’s Housing Action plan leans on several policy changes designed to squeeze more housing out of a townsite where 98.5 per cent of developable land is already built on. New rules allow taller buildings with more density and have eliminated the requirement that new housing developments include on-site parking. The parking rule had been a major roadblock for homeowners wanting to add a basement or garden suite.
That shift is already showing results. Since land-use bylaw changes took effect in 2024, the town has received applications for 105 net new housing units. Notably, 14 homeowners applied to build accessory dwelling units in just five months—more than the 13 such applications received over the previous five years combined.
To speed things along, the municipality is offering financial carrots through its Accessory Dwelling Unit Incentive Program. Homeowners can tap up to $30,000 to create a new rental suite or up to $10,000 to bring an existing unpermitted suite up to code.
The strategy also targets undeveloped land, with a possible tax on vacant lots meant to push owners toward building. And the town is promising faster permit approvals to cut red tape for developers.
The centerpiece project, the Wolf Street Housing Project at 50 Wolf Street, broke ground in March 2026. When finished in late 2027, it will deliver 90 permanently below-market-price homes—75 rentals and 15 for-sale units—plus 8,000 square feet of community space. The $41.54-million project is backed by $6.43 million from the Alberta government, $3.33 million from the federal Housing Accelerator Fund, $5 million from the Wim & Nancy Pauw Foundation, and $175,000 from the Federation of Canadian Municipalities’ Green Municipal Fund.
Mayor Corrie DiManno called the latest federal funding a “vote of confidence” and said the Housing Accelerator Fund acted as a “catalyst” for bold decisions. With roughly 40 per cent of Banff’s population made up of short-term workers who keep the tourism economy running, town officials say adding rental options is critical to keeping the community functional.
