City of Lacombe Housing Analysis Summary of Data and Feedback

City of Lacombe Housing Analysis Summary of Data and Feedback October, 2013 Submitted by: Another Way and creo

Percent 1999 2001 2003 2005 2007 2009 2011 % Permits Issued Executive Summary This first stage of the City of Lacombe`s Housing Needs Assessment focuses on the current supply and demand for housing, identifies trends affecting growth, reviews policies and regulations that govern growth, and speculates on the adequacy of future land holdings. The Overall Housing Context The City of Lacombe had approximately 11,707 inhabitants in 2011. The City has been growing at an average of 2.5% per year over the past 10 years (with Sylvan Lake growing at 6.5% and Blackfalds at 10%). There has been little change in household composition over the same time period. It appears that numbers of singles (sharing accommodation and living separately) are growing while households with families are not. Two-thirds of households do not include children. The City of Lacombe is largely comprised of single family dwellings (70%). There has been little change in the mix of dwelling types over the last ten years. The housing stock is relatively young 60% of all units are less than 30 years old while only 5% are more than 65 years old. Of this stock, only 4% of units require major repairs; another 22% require minor repairs. With an average of 2.6 people per dwelling, there is a mismatch between the average number of bedrooms per dwelling and the average number of occupants per dwelling. Lacombe s stock is heavily weighted toward 3 and 4+ bedroom units (75%). Although 21% of Lacombe s population are singles, only 7% of all units contain one bedroom. 4+ Bedrooms 19% Singles by No. Bedrooms in Dwelling One Bedroom 22% Between 2008 and 2012, the City of Lacombe averaged 128 new housing starts per year. Of these new starts, 62% were for single family dwellings. Building permits for renovations almost equalled those for single family dwellings, whereas the number of permits for semi-detached and multi-family dwellings averaged 5%. The vast majority of new construction has been geared to homeownership. 50% 40% 30% 20% 10% 0% Breakdown of Building Permits Single Family Dwellings Residential Renovations Semi-Detached Multi-family Lacombe has almost 1,000 residential rental properties. The five year average apartment vacancy rate is 6.2%, comparable to that of 5.9% in Sylvan Lake. The most current 2013 apartment vacancy rate is less than 1%. 0.2 Apartment Vacancy Rate 3 Bedrooms 25% Two Bedrooms 34% Between 2001 and 2011, the median household income in Lacombe increased by 50% and reached $75,243. The median household income of homeowners was $88,677, whereas the median income of renters was less than half ($38,628). In 2011, 11% of people in Lacombe were considered low income (compared to 12% in the province as a whole). The 2011 census data shows an average monthly shelter cost of $952. Over 10 years, average household spending on housing increased 42% for renters and 48% for homeowners. 0.15 0.1 0.05 0 1 Bedroom 2 Bedroom 3+ Bedroom Average 1

Lacombe s five year median MLS sale price is $272,000 10% less than that of Sylvan Lake and 6% lower than Blackfalds. Sales prices are within 4% of all sales within the Central Alberta Real Estate Board. In 2012, Lacombe`s newer units sold at a higher cost per square foot ($273) than other new homes built in the area ($238). Homes built before 1993 sold for less per square foot ($170) than the average of $177 for older homes. As of June 2013, Lacombe had the greatest percentage of affordable units for sale in the area. 80% 60% 40% 20% 0% % Total Under $300,000 MLS Listings June, 2013 % Total Over $300,000 If it was possible to build for as little as $180,000 per unit, there would be a market of up to 470 renters that could potentially move into homeownership. (Barriers to entry, such as lack of down payment or poor credit, would have to be addressed in addition to qualifying income and purchase price.) The Affordable Housing Market According to CMHC, housing is deemed affordable if expenditures on housing do not exceed 30% of gross income. In Lacombe (2011), 22% of all households spent more than 30%. Renters were 3 times more likely to spend more than 30% of income on housing than were owners. Further, 59% of households spending more than 30% of income on housing had annual incomes of less than $30,000. Shelter to Income Analysis # Spending > than Total Annual Household Income 30% on Housing $0 - $29,999 575 $30,000 - $59,999 310 $60,000+ 70 Lacombe Blackfalds Sylvan Lake Given average yearly income adjusted for household size, overall, bachelor and one bedroom units were not considered affordable whereas units of 2 or more bedrooms were considered affordable. options for seniors or people struggling with mental illness or addictions. There is also no emergency or transitional shelter accommodation available in Lacombe (which is typical of smaller centres). There are almost 100 people on waiting lists for subsidized housing. A gap analysis shows a need for at least another 235 affordable rental units for renters spending more than 50% of their income on housing. A total of 465 renters spend more than 30% on rent and require more affordable housing. Using the biggest frame, almost 1,000 renter and homeowner households are in housing need, spending at least 30% of their incomes on housing. The vast majority of needed units (69%) are one bedroom units. The Policy Context The Municipal Development Plan specifies that no less than 60 percent and no more than 80 percent of the total potential dwelling units be single detached dwellings and no more than 40 percent and no less than 20 percent be semi-detached, apartment, four-plex, and row housing units. The Land Use Bylaw specifies the rules and regulations for the development of residential uses, including: Types of residential uses permitted in Lacombe, from low intensity residential to commercial/residential mixed use; Restrictions on where certain residential uses can be located and on what terms; Minimum lot area required per dwelling; and Maximum density of units per hectare in a given land use category. The Downtown Area Redevelopment Plan Allow[s] for greater housing choices to accommodate a range of lifestyles, ages and incomes...a mix of housing types and densities has been planned to accommodate a range of lifestyles, ages and incomes. Allowing for a greater mix of housing types also offers options for both ownership and rental units. Yet, the vast majority (74%) of all residentially zoned land is intended for the lowest intensity single family uses. Only 15% is earmarked for medium density development with the balance slated for high density and other mixed use development. Further, even when builders acquire land that permits higher density, such land is only being developed at 65% of its `highest and best use`. Lacombe has a total of 241 subsidized affordable housing units. Almost all of these are independent living units which serve families and seniors who do not require supports. Supportive living units are restricted to people with developmental disabilities. There are no supportive living 2

200 150 100 50 0 Achieved Density - New Subdivisions 2008-2013 R1b R1c R2 R3 R4 R5 R6 Units Achieved Units Permitted significantly fewer units than allowed under the Land Use By- Law. If density targets are not met, the City will need to find a way to increase the supply of new serviced lots to approximately 40 hectares every 5 years. Trends and Factors to Consider The City does not have an inventory of City-owned land nor does it act as a developer. The City does pass on the cost of servicing new land (for both residential and commercial purposes). The municipality will charge an average of $60,103 per hectare in off-site levies by 2016. Future Growth As of June 2013, 5% of all residential land is serviced but vacant. This translates into 17 acres of serviced land, ready for building, almost all of which is outside of the City core. At best, 17 hectares can accommodate a maximum of 595 units with 2.5 people per unit for a total of up to 1,488 inhabitants. Given the population projections based on a growth rate of 2.4% per year, it is estimated that by 2016, there will be an additional 1,474 people living in Lacombe who will need another 590 units. Services land should be exhausted by that date. By 2026, there will be a cumulative total requirement of 5,002 units (above those required in 2011). This suggests that, the City will have to ensure that at least 20 hectares of serviced land (it does not own) is developed and built out every five years starting no later than 2015. Two focus groups were held in order to supplement and verify the published data gathered to date. The first group was held with organizations that understand the demand for affordable housing, and the second included members of the private sector involved in real estate and housing development. A number of trends and factors that are seen to influence the current and future development of Lacombe s housing stock have been identified. `This list is not exhaustive, but it does attempt to group key drivers into themes for consideration in the next phase of this project. These themes are presented in alphabetical order rather than order of priority). This 20 hectare supply figure is based on the assumption that lands are built out to their highest and best use. That being said, between 2008 and 2012, suburban development placed 19.1 ha into the market, but only created 370 units. This is Aging of the Population Economics of New Construction Entrenched Poverty Grant Funding : Limits of Sources and Uses Growth Rate Slower than Surrounding Communities Innovation Seen in Other Jurisdictions Other Stakeholders Want to Participate Public Supports a Greater Range of Housing Options Transportation Has to be Integrated into Housing Developments Vacant Land and Development Initiatives Not Being Utilized 3

Table of Contents 1. Introduction... 6 2. Geographic Context... 6 3. Understanding the Housing Stock... 7 a) Dwellings... 7 b) Age and Condition... 7 c) Bedroom Configuration... 9 4. Key Demographic Drivers... 9 a) Population Changes... 9 b) Demographics... 11 c) Income... 12 d) Mobility of Homeowners... 14 5. Recent Housing Activity... 15 a. Housing Development... 15 b. Rental Accommodation... 16 c. Homeownership Market... 19 d) Potential Homeownership Market... 23 6. Understanding Policy Constraints... 24 a) Municipal Development Plan (MDP) Bylaw No. 320... 24 b) Land Use Bylaw No. 300... 26 c) Downtown Area Redevelopment & Urban Design Plan Bylaw 380... 26 d) Other Research Documents... 27 7. Estimating Future Supply and Demand of Land... 28 a. Population Projections... 28 b. Land Use Analysis... 29 c. Vacant Urban Land... 29 d. Serviced New, Suburban Land... 30 e. Projected Demand and Supply of Serviced Land... 31 8. Understanding the Affordable Housing Market... 33 a. Calculating Housing Affordability... 33 b. Housing Suitability... 34 c. Affordable Housing Inventory... 34 b. Gap Analysis... 36 c. Other Indications of Housing Demand... 37 9. Focus Group Feedback... 39 4

a. Housing Demand Focus Group:... 40 b. Housing Supply Focus Group:... 41 10. Trends and Factors that Affect Housing Patterns in the Future... 43 5

City of Lacombe Housing Analysis 1. Introduction The purpose of this document is to summarize the information gathered as part of the larger City of Lacombe Housing Needs Assessment. This first stage of intelligence gathering combines a review of statistical information, interviews, and a summary of focus group discussions. This data was used to help understand how and why the City s housing stock functions the way it does. This report focuses the current supply and demand for housing (across a continuum of options), identifies trends affecting growth, reviews policies and regulations that govern growth, and speculates on the adequacy of future land holdings. The next report will summarize options for future growth and development, once preferences are identified by key stakeholders. 2. Geographic Context The City of Lacombe is situated in central Alberta. Lacombe is surrounded by smaller towns nestled in the County of Lacombe. The City is located approximately 20 kilometres from Alberta s third largest city, Red Deer. Along with other smaller centres such as Blackfalds and Penhold, Lacombe operates within the gravitational pull of Red Deer. (Over 200,000 people live and work within one hour of Red Deer.) Where possible, the findings in this report are presented in a regional context so as to allow for a comparison of similarly-sized centres and to reinforce the concept that housing markets are best understood in larger regional settings. The map below illustrates the boundaries of the City. 6

3. Understanding the Housing Stock a) Dwellings The City of Lacombe is largely comprised of single family dwellings. Census data indicates that there has been little change in the mix of dwelling types over the last ten years. See below for the breakdown of housing types in 2011. (Note that CMHC uses the term townhouse, whereas the City of Lacombe and Statistics Canada use the term row house. Both terms refer to the same built form. Further, fourplexes are included in the category apartment/duplex unit.) The composition of Lacombe s housing stock is static Breakdown of Housing Stock By Dwelling Type 3% 2% 13% Single-detached house Movable dwelling 8% 4% Semi-detached house Row house 70% Apartment; duplex Apartment that has fewer than five storeys b) Age and Condition Lacombe was incorporated as a village in 1896, as a town in 1902, and then as a City in 2010. Lacombe s current housing stock is a reflection of this history. The oldest homes and areas were built on large lots for stately homes. New development did not increase dramatically until the late 1980 s. As a result, most of Lacombe s housing stock (60%) is less than thirty years of age. Only 5% of all housing stock is more than 65 years of age, which speaks to the relative youth of the city, 7

Age of Housing Units Less than 30 years old 30-65 years old More than 65 years old 5% 35% 60% All of the oldest units (built before 1946) are owner-occupied. As the follow table illustrates, renters are most likely to occupy units that are between 30 and 65 years old. Period of Construction and Tenure Period of Construction % Owner Occupied % Renter Occupied Before 1946 100% 0% 1946-1980 67% 33% 1981-2011 83% 17% The 2011 census takers asked respondents to evaluate the condition of their dwelling. (The results are, therefore, highly subjective.) Overall, the vast majority of Lacombe s units were deemed to only require regular maintenance (74%). The graphic below illustrates the estimated condition of Lacombe s housing stock. 22% Condition of Dwelling 4% 74% Regular Maintenance Only Minor Repairs Needed Major Repairs Needed Housing stock needing major repair is largely found in single family dwellings that are close to 50 years old. Units are either owner or renter occupied. Those units needing minor repairs were fairly evenly distributed throughout the 5 65 years old categories. The units needing major repairs, however, were most likely to have been built between 1946 and 1980, making them between 30 and 65 years of age. A full 60% of units needing major repair are approximately 50 years old. 8

Of the units needing minor repair, 75% were single detached homes; the balance being semi-detached, row or apartment buildings. Almost all of the units needing major repair were single detached homes 1. While 82% of the units needing minor repair were owner occupied, 44% of dwellings needing major repairs were rental units. Condition of Dwelling and Housing Tenure Condition of Dwelling Owned Units Rented Units Regular Maintenance Only 77% 23% Minor repairs Needed 82% 18% Major repairs Needed 56% 44% The owners of those dwellings needing major repairs ranged from 35 to over 75 years of age. Approximately one-third of the units needing major repair were owned by seniors (36%). c) Bedroom Configuration Although 21% of Lacombe s population are singles, only 7% of all units contain one bedroom. Lacombe s inventory is heavily skewed towards 4 or more bedroom units even though only 11% of households contain five or more persons. The following chart compares household and bedroom size. 50% Size of Households by Numbers of Bedrooms 40% 30% 20% Bedrooms Persons Per Household 10% 0% 1 bedroom 2 bedrooms 3 bedrooms 4+ bedrooms 4) Key Demographic Drivers a) Population Changes According to the federal census, Lacombe s population reached 11,707 in 2011. This represents a 9% increase in population since the last federal census in 2006. 1 Due to the voluntary nature of the 2011 census, there were lower than historical response rates to the census. This, in addition to the need to protect the privacy of individuals in smaller centres, compelled Statistics Canada suppress the data where the results might identify respondents. As a result, some of the cross-tabulations do not add up to total figures. Therefore, in cases such as the cross-tabulation of homes needing major repair, the direction of the trend can only be inferred and not taken directly from the Statistics Canada data tables. 9

(It must be noted that the Statistics Canada population count was based on a voluntary census which had a 75% participation rate. (Low income individuals are least likely to participate in the census and therefore the results likely under-represent poor individuals.) The City of Lacombe attempted to conduct its own census in 2011, but was not able to complete the enumeration. Based on the results of the City`s incomplete census count, it is believed that the federal census data also underestimates the total number of inhabitants. In lieu of better information, and with these caveats in mind, the results of the federal census are used throughout this document. ) Lacombe s 25 year population growth rate averages 2.3% per year. Its period of highest growth occurred between 1996 and 2001, when it experienced an average annual growth rate of 4.8%. Since that period, Lacombe s growth has slowed. Most noticeably, its last 5-year growth rate has slowed to an average of 1.8% per year. The following chart illustrates these changes in five year increments. 5.0% 4.0% Changes in Population, 5 Year Intervals Lacombe s annual % population growth has been declining since 2000. 3.0% 2.0% 1.0% 0.0% 1986-1990 1991-1995 1996-2000 2001-2005 2006-2011 While Lacombe has been growing at an average of 2.5% per year over the past 10 years, neighbouring communities have grown at very different rates. As the following graph illustrates, Ponoka failed to grow between 2001 and 2011, while Sylvan Lake grew by 6.5% and Blackfalds grew by 10% per year (allowing its population to more than double). The following graph illustrates the various growth curves of other nearby towns. 14000 12000 10000 8000 6000 4000 2000 0 Changes in Total Population 2001 2006 2011 Lacombe Blackfalds Sylvan Lake Ponoka Lacombe is not growing as quickly as some of the other nearby towns. 10

b) Demographics The following chart illustrates the breakdown of the population by age. The cohort with the largest population is comprised of people between the ages of 45 and 54. Population Breakdown by Age, 2011 85 years and over 75 to 84 years 65 to 74 years 55 to 64 years 45 to 54 years 25 to 44 years 20 to 24 years 15 to 19 years 5 to 14 years 0 to 4 years Seniors will soon become Lacombe s fastest growing cohort. 0 500 1000 1500 2000 2500 3000 3500 Over the past ten years, two groups grew more quickly than the average. Children under the age of 5 increased 35% over 2001 figures. Middle aged individuals (aged 55 64 years of age) grew by 44% between 2001 and 2011. Seniors currently represent 14% of the total population. In the next 10 years, a significant number of middle aged people will become seniors (over the age of 65) adding to the bulge on seniors on the population pyramid. All things being equal, by the next federal census, seniors could represent 25% of all people living in Lacombe. While Lacombe had an overall average number of 2.6 persons per household in 2011, this figure varied depending on housing tenure. For example, owner households were larger at 2.7 persons per household, whereas renter households averaged 2.1 persons. Over the next decade it is expected that the number of couple and single households will increase as children leave home and seniors lose marriage partners. It is expected that average household size will decrease over time. 2011 Household Size Percent 1 person 24% 2 persons 34% 3 persons 17% 4 persons 14% 5+ persons 11% Consistent with this data is information on household composition. As the following graphic illustrates, more than half of all households do not contain children. 11

Other household types 14% Household Composition, 2011 One-person households 24% Households containing a couple with children 33% Households containing a couple without children 29% 76% of families still consist of married couples with children. The following table compares the information in another way. It illustrates the percentages of household types over time (comparing 2001 to 2011 census figures). This clearly indicates that there has not been a significant change in the proportion of household types over the past ten years. Households containing a couple with children have decreased slightly from 35% to 33% while one person households and other households have increased by 1%. This other category includes unrelated people living together (shared accommodation). It appears that singles (living together and separately) are growing while households with families are not. Changes in Household Composition (Numbers and Percentages of Households) 2001 2001% 2011 2011% Households containing a couple with children 1225 35% 1465 33% Households containing a couple without children 1000 29% 1260 29% One-person households 780 23% 1055 24% Other household types 455 13% 630 14% Total households 3455 4410 There is little change in household composition. There has been little change in the overall composition families (vs. households) between 2001 and 2011. For example, while the absolute number of sole parent families increased by 120 - to a total of 450 families - single parent families continued to represent 14% of all families. In 2011, most families (76%) were still married couples with children. Couples without children represented 10% of all households. c) Income According to the 2011 federal census, the median household income was $75,243. This amount is lower than the median household incomes of Blackfalds ($80,626), or Sylvan Lake ($83,952). The following graph illustrates the 2010 annual household income of Lacombe s residents. (Statistics Canada does not offer further breakdowns of households earning over $150,000 per year.) 12

Annual Household Income 16% 14% 12% 10% 8% 6% 4% 2% 0% Between 2001 and 2011, the median household income in Lacombe increased by 50% from $50,247 to $75,243. This dramatic increase in income was experienced by families (including single parent families) and single person households. The incomes of single parent families increased the most (78%) from $28,662 in 2001 to $50,940 in 2011. Although singles increased their incomes by 65% over ten years, this group continues to have the lowest median income of $31,874 per year (2011). Over the same 10 years, average household spending on housing increased 42% for renters and 48% for homeowners. The graph below illustrates the changes in income over time. Changes in Median Income $100,000 $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $- 2001 2006 2011 All Households All census families All Singles Lone-parent families Over 10 years, incomes have increased by 50% while housing expenses have increased by 42% - 48% on average. The median incomes of homeowners and renters differed. The median household income of homeowners was $88,677, whereas the median income of renters was less than half ($38,628). Low Income Cuts Offs (LICO) are used to define poverty levels. The levels are established based on the size of the municipality, the number of people in the household, and the amount needed to meet basic needs. If household income falls below this amount, the household is considered poor. The last LICOs were developed in 2011. The following table 13

illustrates the annual incomes required not to be deemed poor in Lacombe and other communities with populations under 30,000. Size of Household LICO 1 person $18,246 2 persons $22,714 3 persons $27,924 4 persons $33,905 5 persons $38,454 6 persons $43,370 7 or more persons $48,285 Unfortunately in the 2011 census, Statistics Canada discontinued the use of the LICO method to determine levels of poverty. It used another method (the Low Income Measure Before Tax) which precludes comparing poverty levels over time 2. That being said, the newly calculated poverty levels for Lacombe were as follows: Population that is low income - 1,240 individuals % of the total population that is low income 11% % Low income that are children under 18-34% (425 individuals) % Low income that are adults 18 to 65 54% (665 individuals) % Low income that are senior over 65 12% (150 individuals) Lacombe s poverty rate is in line with the provincial average of 12% The numbers (and types) of low income households in Lacombe are not currently available from Statistics Canada. d) Mobility of Homeowners The 2011 census results show that 63% of homeowner households did not move in the five years prior to the census. The characteristics of those who did move (1,225 households) varied depending on the type of dwelling in which they lived. For example, 37% of households living in single detached homes, duplexes or row houses moved in the previous 5 years. Of those who did move, 56% moved outside of the City of Lacombe. In contrast, slightly fewer (34%) of the owners of apartment units (condominiums) or movable dwellings moved within 5 years of the previous census. However, when this group moved, 84% moved out of the city. This may suggest that when people who live in condominiums or mobile homes move, they are unlikely to remain in Lacombe. Movers living in lower valued properties are less likely to move, but when they do, they leave the City of Lacombe. This hypothesis is confirmed by comparing the mobility of owners based on the stated values of their properties. Overall, the greater the values of their homes, the more likely the owners were to sell their units. The value of the units was, however, inversely co-related to their likelihood of staying in Lacombe. People with lower valued units were far more likely to leave Lacombe than people with higher valued units. Again, this suggests that Lacombe may have difficulty retaining owners of lower valued properties. See below for details. 5 Year Mobility and Value of owned Dwelling Value of Dwelling Non-Movers Movers Moved within Lacombe Moved out of Lacombe <$250,000 68% 31% 21% 79% $251,000 - $500,000 63% 37% 43% 57% >$500,000 53% 47% 60% 40% 2 Different tools for measuring poverty yield significantly different results. For 2010, the numbers of poor people living in Alberta ranged from 381,000 (using LICAO) to 494,170 (using LIM). 14

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 No. Permits It should be noted that the ages of the people who moved within Lacombe and those who moved out of Lacombe did not vary. 5. Recent Housing Activity a. Housing Development Housing starts can be used to understand patterns in new construction. Historically, single family dwellings have made up two-thirds of all new home construction. There was one apartment building erected in 2012 which helped increase the mix of dwelling types in Lacombe. Overall, Lacombe appears to be on par for new construction when compared to Sylvan Lake. Housing Starts - Lacombe 2008 2009 2010 2011 2012 Average % of Total Single Family 77 52 122 66 82 80 62% Semi-Detached/Row 41 3 14 39 39 27 21% Apartment 8-10 - 88 21 17% Total 126 55 146 105 209 128 Sylvan Lake Total 79 101 139 207 132 Source: CMHC Housing Outlook, Prairie Region Reports 2008-2013 By examining the breakdown of building permits 3, we can see that there has been a steady change in the mix of permits issued. The following chart illustrates the changes in numbers of permits issued since 1999. The numbers of multi-family and semi-detached permits have remained fairly flat, and in fact have stayed at below 10% of building permits for over 10 years. A total of 41 building permits were issued for secondary suites between 2008 and 2012, an average of 10 units per year. This may be of concern as these are the most affordable types of family-oriented new construction. These issues are explored in greater detail on the Supply Side Focus Group section. 140 Residential Building Permits by Type 120 100 80 60 40 20 Single Family Dwellings Residential Renovations Semi-Detached Multi-family 0 The number (volume) of building permits issued is a reflection of the local and provincial economy. In the last five years, there has been a downward trend in the number of single family dwelling permits and a steady increase in home 3 Note that building permits are required for a wider range of construction activities than housing starts, and, therefore, the two sets of numbers are not directly comparable. 15

Annual Starts renovations. The relative increase in renovations may be due to a number of factors including the sluggish economy and a related reluctance to buy- up, the decision to renovate (rather than buy new) in the face of retirement, and a lack of other compelling dwelling choices. (Note that home renovations do not add to the housing stock and do not assist with either affordability or supply.) The volume of building activity is reflected in the construction value of the total permits issued. The 2012 total construction value of building permits was significantly lower than 5 years ago. Single family dwelling permits, for example, totalled $24,938,749 in 2007 but only reached $14,387,144 in 2012. This represents a very significant decrease in new housing investment, as the table below illustrates. Type of Permit % Change in Value 2007-2012 Single Family Dwellings -42% Residential Renovations -28% Semi-Detached -2% Multi-family -19% Over the past five years, the vast majority of units have been built for homeowners. Based on local developer knowledge, with the exception of 2012, virtually no units were developed with renters in mind (assuming that condominiums were owner-occupied.) Including the 2012 anomaly where 88 rental units were built, the five year average for rental units started in Lacombe was 14% (18 starts per year). Excluding the 2012 year, only 3 units of rental housing were built between 2008 and 2011. This represents 1% of all housing built in those four years. Rental stock has decreased 5% in the past 10 years 160 140 120 100 80 60 40 20 - Housing Starts by Tenure 2008 2009 2010 2011 2012 Homeowner Rental Condo In 2011, almost one-third of the owned housing stock was owned by persons aged 60 years or older. Sixteen percent of Lacombe s housing stock was owned by persons aged 70 or older. As the population continues to age, it can be anticipated that much of this housing stock will turn-over. b. Rental Accommodation According to census data, the number of rental properties has remained fairly constant between 2001 and 2011. Because the number of owned properties increased during that period, the percentage of rental properties decreased overall from 28% in 2001 to 23% in 2011. 16

Lacombe has almost 1,000 residential rental properties. These units are scattered throughout the City of Lacombe as can be seen in the map Rental Properties: Residential. The vast majority of the units are found in single family dwellings or duplexes. Approximately 244 apartment units (25% of all units) are in buildings with three or more units. 4 There appears to be heightened demand for additional rental development. The total number of apartment rental units has remained fairly constant the past five years. (Vacancy rates only became available in 2009 when CMHC began gathering data on this rental stock for the City.) Since 2009, vacancy rates have varied somewhat, with 2 bedroom units having the greatest percentage of available units. (On average, two bedroom units have had 9% vacancy rates.) The five year overall apartment vacancy rate is 6.2%, very close to that of Sylvan Lake s at 5.9%. 4 The City of Lacombe derived these figures on the assumption that rental properties are those properties where the owner s registered address on title is not found in the City of Lacombe. The data is based on summer 2013 tax records. 17

Percent 0.18 0.16 0.14 0.12 0.1 0.08 0.06 0.04 0.02 0 Apartment Vacancy Rates 2009 2010 2011 2012 2013 1 Bedroom 2 Bedroom 3+ Bedroom Average The use of percentages can be somewhat misleading in a smaller City. Put in context, in 2011, there were a total of 28 vacant apartment units, whereas in 2012, there were only 11 vacant apartment units in all of Lacombe 5. As of April, 2013, the overall vacancy rate for apartments in Lacombe was.4%, the lowest it has been since CMHC started collecting data on Lacombe. Despite these low vacancy levels, rental rates have remained fairly constant, increasing by only 4% over four years. CMHC s Monthly Average Rental Rates 2010 2011 2012 2013 1 Bedroom Apartment $631 $630 $635 $654 2 Bedroom Apartment $745 $755 $771 $783 3+ Bedroom Apartment $844 $828 $850 $864 Lacombe Average Apartments $720 $722 $735 $750 These rental rates must be placed in the context of the data set from which they were derived CMHC surveys of apartment buildings only (largely one bedroom units). This data set, by definition, presents a distorted picture of the rental market in Lacombe (showing rental rates as being much lower than the actual average for all rental units.) In contrast, the rental rates revealed by the 2011 census data were derived from all of the renters surveyed, including those of single family dwellings and homes with more than four bedrooms. As a result, the 2011 census data shows an average monthly shelter cost of $952 (32% higher than the CMHC figure for 2011). Households are identified as in Core Housing Need if they spend no more than 30% of their gross income on housing. They are deemed to be in Dire Housing Need if they spend more than 50%. These Core Need Income Thresholds (CNITS) are set by the Province of Alberta, and adjusted for each municipality. The CNITS illustrates how much households would have to earn in order to be able to afford average apartment rental rates. The following table reflects the CNITS for Lacombe in 2013. These CNITS are based on the CMHC rental market report (apartments only) and therefore understate actual average market rents. As of April, 2013, apartment vacancy rates were below 1%. Theoretical Affordability Thresholds for Renters in Lacombe (CNITs) Bedrooms Bachelor 1 Bedrooms 2 Bedrooms 3 Bedrooms 4+ Bedrooms Income Needed $28,500 $31,500 $34,500 $38,500 $41,500 Mo. Payment $713 $788 $863 $962 $1,037 5 Units are considered vacant if they are unoccupied at the time of the survey. 18

When the actual rental payments (for all rental units, not just apartments) are used as the reference point, it becomes clear that actual payments for bachelor and 1 bedroom units in Lacombe exceed CNIT thresholds and, therefore, are not affordable. Actual Rent Paid in Lacombe (Statistics Canada data) Bedrooms Bachelor 1 Bedrooms 2 Bedrooms 3 Bedrooms 4+ Bedrooms Yearly Income $25,000 $25,000 $35,000 $45,000 $45,000 Mo. Payment $1,021 $1,021 $777 $954 $954 Affordable? No No Yes Yes Yes c. Homeownership Market The Multiple Listing Service (MLS) is used to advertise homes for sale in the area. The Central Alberta Real Estate Board tracks numbers, values and characteristics of listings in the region. The following MLS data is restricted to price and location and does not factor in the quality, age or condition of the units. Historically, the volume of Lacombe s listings has remained lower than that of Sylvan Lake (even though Sylvan Lake s population is equal to that of Lacombe s) and greater than that of Blackfalds. Lacombe s April average number of MLS active listings is approximately 150 residential units. 250 Active Listings, April, 2013 200 150 100 Blackfalds Lacombe Sylvan lake 50 0 5 Year Average 10 Year Average As of June, 2013, Lacombe had 130 residential listings on the Multiple Listing Service (MLS). In contrast, Blackfalds had 95 and Sylvan Lake had 298. The latter two sets of listings included local/regional listings just outside of town. When comparing the relative affordability of these listings, the three centres can be compared by breaking down the listings by asking price. Asking Price Range Lacombe Blackfalds Sylvan Lake $0 - $100,000 5% 2% 4% $100,000 - $200,000 14% 2% 8% $200,000 - $300,000 33% 26% 27% $300,000 - $400,000 25% 33% 14% $400,000 - $500,000 12% 17% 14% > $500,000 11% 20% 33% 19

As of June, 2013, Lacombe had the greatest percentage of affordable units listed on the MLS. Specifically, 52% of all of Lacombe s listings were under $300,000, while only 31% of Blackfalds and 39% of Sylvan Lake s listings were under $300,000. Converted to absolute numbers, Lacombe had 67 units for sale under $300,000 at that moment in time. (Note that these figures speak to neither the quality nor suitability of the housing stock.) % of MLS Listings June, 2013 70% 60% 50% 40% 30% 20% 10% 0% % Total Under $300,000 % Total Over $300,000 Lacombe Blackfalds Sylvan Lake This current snap-shot of real estate activity is borne out by 10 years of actual sales prices. Lacombe s five year median sale price is $272,000 10% less than that of Sylvan Lake. Lacombe s ten year median sales price of $239,400 is 6% lower than that of Blackfalds and 12% lower than Sylvan Lake. Lacombe s MLS listings are relatively more affordable than those of its neighbouring towns Median Sales Price April, 2013 10 Year Average 5 Year Average Sylvan lake Lacombe Blackfalds $- $100,000 $200,000 $300,000 The value of median home sales declined, overall, the past seven years, with the exception of single family dwellings (holding their value over time). The following graph illustrates median sales prices by type of dwelling, over time. (The terms used by the MLS are not the same as those used by the City of Lacombe. A townhouse is the equivalent of a row house and a half duplex is one-half of semi-detached dwelling.) 20

$350,000 Median Sales Prices by Type $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 Single Family Dwelling Townhouse Half Duplex Apartment $- 2007 2008 2009 2010 2011 2012 2013 Lacombe s median sales prices are within 4% of all sales in the Central Alberta Real Estate Board. Five year data suggests that Lacombe s real estate market is in line with regional norms. 5 Year Median Sales Price Apartment Unit Townhouse Single Family Detached Lacombe $195,000 $210,000 $309,000 Central Alberta Real Estate Board $190,000 $219,900 $305,000 A more detailed analysis of all sales in 2012 reveals the differences between the types of products available in the region, primarily as refined on the basis of the age and size of the stock. For example, 139 single detached houses were sold in Lacombe compared to 182 in Sylvan Lake, 132 in Blackfalds, and 68 in Ponoka. The ages of the units varied considerably with only 11% of units in Blackfalds and 16% of units in Sylvan Lake being older than 1998. In contrast, 34% of all units sold in Lacombe were built before 1998. 21

% Sales of Older Units 70% 60% 50% 40% 30% 20% Lacombe Ponoka Blackfalds Sylvan Lake 10% 0% Built Before 1993 Sales prices in 2012 were co-related to both the age and the price of the home. Specifically, as the following table illustrates, Lacombe s newest homes sold for approximately 13% more than the average per sq. ft. sales price in the area. In fact, all of Lacombe s stock built after 1998 sold for more than the average per sq. ft. price. In contrast, its oldest stock (built before 1993) sold for 4% less than the average price. Comparison of Median Sales Price Per SQ. Ft. Year Built Lacombe Ponoka Blackfalds Sylvan Lake AVERAGE >2007 $ 273.33 $ 222.35 $ 219.01 $ 238.13 $ 238.20 2003-2007 $ 249.66 $ 238.51 $ 252.94 $ 235.49 $ 244.15 1998-2002 $ 262.19 $ 234.45 $ 240.30 $ 261.45 $ 249.60 1993-1997 $ 225.51 $ 209.05 $ 244.13 $ 261.07 $ 234.94 <1993 $ 169.77 $ 141.95 $ 183.56 $ 213.06 $ 177.08 The reverse pattern was observed when the units sold were compared on the basis of size. Specifically, Lacombe s newest units were 5% smaller than the average and its oldest units were 12% larger. See below for more details. This suggests that newest units tend to be both smaller and more expensive than older stock. Comparison of Sq. Footage Year Built Lacombe Ponoka Blackfalds Sylvan Lake AVERAGE >2007 1,281 1,347 1,347 1,411 1,347 2003-2007 1,462 1,467 1,189 1,377 1,374 1998-2002 1,276 1,415 1,155 1,201 1,262 1993-1997 1,286 1,024 1,065 1,287 1,165 <1993 1,355 1,152 1,125 1,119 1,188 Affordability Median sales data for April, 2013 is provided below. To determine how affordable these prices are, the research team estimated required income based on a 10% down payment and standard qualifying figures for mortgage calculations. Monthly housing payments were set not to exceed 30%. 22

Lacombe Median Sales Price April 2013 Product SFD Townhouse Half Duplex Apartment Sales Price $311,000 $210,000 $209,000 $160,000 Annual Total Income to Quality $100,000+ $70,000- $70,000- $55,000- $99,999 $99,999 $69,999 No. Households that Might Qualify 1,470 853 853 408 % of Households that Might Qualify 33% 19% 19% 9% This data suggest that 80% of all households in Lacombe could afford to purchase an average priced unit of some type (assuming that they had a 10% down payment and could qualify for a mortgage). The other 20% of residents could not qualify for a mortgage based on their income alone. Property taxes also affect the overall affordability of homeownership. To compare taxes in similar jurisdictions, the total mill rates for residential properties are provided in the table below. Note that the total taxes paid on a $300,000 property are almost identical for Lacombe and Blackfalds, and less than $40 more (per month) than in Sylvan Lake. This suggests that mill rates are not likely to be a significant factor when determining where to purchase within the region. 2013 Residential Mill Rate 2013 Total Mill Rate Total Taxes on $300,000 home Difference in Annual Total Tax on $300,000 home Lacombe 7.1122 9.742 $ 2,923 Blackfalds 7.4676 9.4401 $ 2,832 $ 91 Sylvan Lake 5.307 8.245 $ 2,474 $ 449 d) Potential Homeownership Market At 2011, almost half of all renters earned more than $40,000 per year. The following chart illustrates the potential ownership market if product was available at the price points modelled below. Possible Size of New Homeownership Market Annual Income $30,000 - $39,999 $40,000 - $59,999 $60,000 - $79,999 $80,000 - $99,999 over $100,000 No. Households 100 240 100 80 50 Affordable @ 30% Income on Housing $1,000 $1,500 $2,000 $2,500 $3,000 Maximum Sales Price@ 3x total Income $120,000 $180,000 $240,000 $300,000 $360,000 Down payment 10% $12,000 $18,000 $24,000 $30,000 $36,000 Mortgage $108,000 $162,000 $216,000 $270,000 $324,000 Mo. Mortgage @ 5%, 30 years $631 $947 $1,263 $1,578 $1,894 Utilities $300 $300 $300 $300 $300 Insurance $50 $50 $50 $50 $50 Property Taxes @ 9.742 $97 $146 $195 $244 $292 Mo. Total $1,079 $1,443 $1,808 $2,172 $2,536 Mo. Income Shortfall/Surplus -$79 $57 $192 $328 $464 If it was possible to develop units for as little as $180,000 per unit, there would be a market of up to 470 renters that could move into homeownership. (Barriers to entry, such as lack of down payment or poor credit, would have to be addressed into addition to qualifying income and purchase price.) 23

6. Understanding Policy Constraints In order to understand the planning context, the following documents have been reviewed for their policies and goals for housing in Lacombe. a) Municipal Development Plan (MDP) Bylaw No. 320 The MDP is to guide future growth and development to ensure that it is sustainable, orderly, appropriate, complementary, efficient, and that it enhances the quality of life for the citizens of Lacombe. In the following section, the Plan is quoted in some detail as this statutory document is both a reflection of the goals for the community as well as a mirror for the development that has occurred since the plan was originally passed in 2004 (and updated in 2009). The development that has occurred since 2004 is a direct result of the policies and objectives stated in this document (and subsequently reflected in the Land Use Bylaw). An analysis of how this document helps and/or hinders the achievement of a new vision for housing will be supplied once community consultation is concluded and preferred options are identified. The Future Land Use Concept... identifies the preferred long range growth and land use pattern as envisioned by the Town. This includes the type and location of different land uses, the general location of major roads, and possible growth areas. The land use concept may be further defined through the preparation and adoption of statutory and nonstatutory plans for smaller geographic areas of the Town (direct quote from the Plan). The plan has macro-level goals for the City. These include the following housing-related goals (quoted from Plan): To manage the rate, type and direction of future growth and development in a manner that is compatible with the heritage, character and physical setting of Lacombe, will enhance the sense of community, and is within the financial capacity of the community. The MPD has created the status quo and will need to be To identify growth needs and directions for Lacombe and plan for any necessary amended if there is a annexations to ensure the Town has access to an adequate supply of readily serviceable different vision for land. This shall include maintaining a 20 year supply of land within the Town s corporate housing in Lacombe. boundaries for residential, commercial and industrial land uses. To encourage infill development and intensification within existing built areas shall be encouraged to take advantage of existing municipal utilities and roads. To promote the development of a compact community and encourage development at efficient density levels to make maximum use of infrastructure, land supply, and public expenditures for maintenance and operating and reduce per unit development costs. The Growth Management section of the MDP states that the goal for residential development is to facilitate a balanced range of housing opportunities supporting the needs and preferences of all household types and income levels within attractive, aesthetically pleasing residential areas. The Objectives are (quote): 1. To identify areas suitable for new residential development and ensure an adequate supply of land for residential purposes; 2. To ensure a high standard of residential development and neighbourhood design; 3. To promote a mix of housing types to meet a variety of lifestyles, life cycle demands and market preferences; and 4. To manage future residential development so that it does not impact adversely on the existing community. The Policies are as follows (quote): 1) The Town shall direct residential development to the areas identified on the Future Land Use Concept 24

2) The Town shall encourage the provision of a variety of housing forms in terms of lot size, dwelling type, appearance, and affordability 3) In considering the design of new residential areas, the Town shall ensure that the following mix of housing types is achieved across the community s overall residential area: no less than 60 percent and no more than 80 percent of the total potential dwelling units being single detached dwellings; and no more than 40 percent and no less than 20 percent of the total potential dwelling units being semidetached, apartment, four-plex, and row housing. This mix is to be achieved on a broad, communitywide basis rather than on a site specific basis to allow for the creation of distinct residential neighbourhoods or sub-neighbourhoods. 4) The Town shall encourage the integration of differing forms of housing on a street-by-street basis using medium density housing forms such as semi-detached dwellings and row housing to transition from low density housing to multi-family housing wherever possible. 5) In locating sites for multi-family housing, the following criteria shall be considered: close proximity to a major collector or arterial road; adjacent or nearby open space and path system; proximity to a school; compatibility with existing housing and uses; and lot size sufficient to minimize traffic and parking congestion. 6) Manufactured homes may be permitted only: as replacements for units within existing manufactured home communities; or as part of a comprehensively designed and architecturally controlled manufactured home subdivision or park that is integrated with the overall design and character of surrounding residential uses; or on an individual site basis where such development is of a high standard of design. 7) Residential areas shall be adequately buffered from highways, industrial and commercial areas. 8) The overall design density for existing and future residential areas of the Town shall average between 10 and 12.5 dwelling units per gross developable hectare. This design density does not apply to individual sites. Variations may be permitted if accommodated in an adopted statutory or non-statutory plan. 9) The Land Use Bylaw shall be used to regulate changes in residential density within existing residential areas to ensure that older, low density areas do not experience extreme density increases. For the purposes of this policy, an extreme increase in density will be considered to have occurred if the number of units on an individual residential block (based on lots on both sides of a street) that would be possible under the current Land Use Bylaw designation increases by threefold or more under a proposed Land Use Bylaw designation. Where there is an adopted area redevelopment plan the policy of the area redevelopment plan relating to density shall prevail over this policy. 10) The Town shall require a high standard of subdivision design to promote the efficient use of land, roads and utilities, compatibility between housing types and land uses and aesthetically pleasing residential environments. Subdivision designs should: provide for varied lot sizes to accommodate different housing types, sizes and designs; minimize through traffic on local roads; provide sufficient on-street and off-street parking; encourage the retention and integration of natural and historically interesting amenities and features; provide for adequate parks, open space and pathway systems; provide opportunities for lots with and without lanes; provide buffers and/or distance separation of land uses and features of lesser compatibility; and promote high visual standards and interesting streetscapes. 11) The lands identified on the Future Land Use Concept as Canadian University College area shall be managed as a predominantly residential and institutional area that allows for a mixture of compatible land uses. While primarily intended to facilitate the development and expansion of the College, this area may contain a variety of land uses that are not typically contained on a college campus. This includes non-residential uses that complement the operations and programs of this private education institution such as commercial uses and compatible light 25

industrial uses. The ultimate mixture of uses allowed in this area and their respective locations shall be in accordance with an approved area structure plan or campus master plan. b) 2009 Land Use Bylaw No. 300 The Land Use Bylaw governs the development of residential uses in Lacombe. It is the most commonly used tool of housing developers and development officers. The By-Law reflects the overarching goals of the Municipal Development Plan and specifies the rules and regulations for the development of residential uses, including the following: Types of residential uses permitted in Lacombe, from low intensity residential (R1) to commercial/residential mixed use in RC-MU; Restrictions on where certain residential uses can be located and on what terms, e.g. secondary suites and mobile homes; Minimum lot area required per dwelling; Maximum density of units per hectare in a given land use category; Permitted and Discretionary uses within land uses; Other regulations including height, landscaping, etc. The following table demonstrates how the goals of the MDP are reflected in the Land Use By-Law and how it has come to be that the vast majority of residential land is occupied by Single Family Dwellings (as reflected in the R1 and R2 categories). Land Use Zone Interior Lot Min Area m2 Max Density/Ha R1a 740 14 R1b 656 15 R1c 465 22 R1d 375 27 R2 310 32 R3 1 588 17 R3 2 370 27 R4 1 200 50 R4 2 Not specified 35 R5 Not specified 80 R6 Not specified 150 R-CE 1860 5 R I 4050 14 Average Density of Units/Ha by Cluster % of Total Residential Land by Cluster 22 74% 32 15% 115 7% 10 (est.) 4% c) 2013 Downtown Area Redevelopment & Urban Design Plan Bylaw 380 The Downtown plan has an overall goal for housing in the heart of the City - Allow for greater housing choices to accommodate a range of lifestyles, ages and incomes. Housing options within a community should appeal to a broad demographic. A mix of housing types and densities has been planned to accommodate a range of lifestyles, ages and incomes. Allowing for a greater mix of housing types also offers options for both ownership and rental units. The plan divides the downtown into districts, each of which has distinct housing goals and recommendations/policies. These are quoted below. (Note that the Plan also includes details on zoning and concept maps to determine density.) District D - Mixed-Use Transition District Located adjacent to the Downtown core, this District contains a mix of high, medium and low density residential uses along with commercial uses dispersed throughout. As a transitional area, this District will provide a range of housing 26

options that are compatible with adjacent commercial and lower density residential uses. Opportunities for higher density street-oriented residential development should be provided, allowing ground floor commercial development in strategic locations (e.g. at corners of major intersections). District E - Medium Density Transition District This District consists mostly of low density single family residential land uses with the exception of a half block of medium density units along eastern side of 47 Street and a small consolidation on the northeast corner of 52 Avenue and 51 Street. As development pressures grow, compatible intensification infill such as semi-detached or row housing units should be encouraged at strategic locations (along 52 Avenue and 54 Avenue, on corner sites, along major roadways [50 Street], on the east side of 47 Street). Secondary suites and garage suites should also be permitted on existing single family residential lots. District F - Historic Residential District This District primarily consists of low density single family residential land uses with a large concentration of historically significant structures. As such, there is a desire to retain the historic character and low density housing forms existing in this area by regulating the character, height, massing, and lot coverage of infill development. Renovations of existing structures should also be regulated to ensure compatibility in terms of character and architectural quality. District G - Central Residential District This District is characterized primarily by low density single family residential land uses with a small mix of medium and higher density residential uses as well as several public / institutional uses. The existing built up area is anticipated to remain as a stable low density neighbourhood with support for single family infill and opportunities for multi-family infill development at strategic locations along major roadways and in proximity to schools and public facilities. d) Other Research Documents The following research documents were also reviewed to gain an understanding of local housing priorities and recommendations. Key findings/points relevant to the current housing needs assessment are noted in bullet form below: 2004 Housing Needs Assessment Supply - lack of rental accommodations Housing needs - The Low-Income Cut-Off (LICO) is a general measure of poverty. According to this measure, there may be as many as 575 households in Lacombe living in poverty. This includes: 300 one-person households 75 two-person households 130 three-person households 70 four-person households The Core Need Income Threshold (CNIT) is a measure of households likely experiencing housing affordability issues. According to this measure, there may be as many as 880 households in Lacombe experiencing housing hardship. Of these households, 550 households may be in core housing need and another 330 households may be in dire housing need. Should this trend and the current growth rates continue, by 2010, there may be as many as 625 households in Lacombe in core housing need and another 375 households in dire housing need. The growing inability of low and even middle-income families to find housing at reasonable prices really worries me. Rents have skyrocketed...the Town needs to work at attracting new developers willing to create more apartments, condos, duplexes, etc. to accommodate the needs of Lacombe s fast-growing population and economically-diverse population". 2006 - Social Needs Assessment Housing security # 7 out of 26 concerns identified 27

Lack of affordable housing Affordable housing is a prevalent issue throughout the Province of Alberta, and Lacombe Town and County are no exception. This topic was one of the most frequently mentioned in the open ended question, with numerous respondents citing poor living conditions in current residences, lack of vacancy in affordable units and an influx of new construction outside of the average household s reach. 2008 Housing Task Force Report Low income and social needs housing top priority Lack of residential housing options wait list of 50 names re: senior and low income housing 2011 Growth Plan Framework Expand housing choices 2013 - Imagine Lacombe Summary of Input Better long-range planning and a clear vision Sustainability More sustainable infrastructure systems (e.g. renewable energy, stormwater) Greater support services for families, children, seniors, people with disabilities More affordable housing There is a need for a greater diversity of affordable housing, including assisted living facilities for seniors 7. Estimating Future Supply and Demand of Land a. Population Projections Given the long term annual growth rate, mitigated by the last five year s rate, we propose to use a 2.4% growth rate for the next 15 years. This is based on historic trends along with the realization that with an aging population the number of couple and single households will increase as children leave home and seniors lose marriage partners. This factor will likely reduce the average household size. The modesty of population growth appears to be reinforced by Alberta`s Ministry of Education. Central Alberta`s kindergarten to grade 12 growth rate is expected to be 13%, compared to growth rates of 23% for the Calgary are and 18% for the Edmonton area 6. While 2.4% is higher than the statistical data alone suggests, we believe it is better to be cautious and overestimate the demand for housing and services rather than be caught off guard with insufficient supply. Population projections include lower and higher growth rate scenarios. The following chart shows the projected 2.4% annual growth rate along with two other scenarios. 6 See http://education.alberta.ca/media/6850185/transformation-in-progress-february-2013-final.pdf 28

25000 Annual Population Growth Scenarios 20000 15000 10000 5000 Projected Growth @ 2.4% Low Growth @ 1.5% High Growth @ 3.5% 0 2011 2016 2021 2026 b. Land Use Analysis The City of Lacombe has a land area of almost 21 km 2. The vast majority of residentially zoned land is intended for lowintensity single family uses. The following table illustrates the distribution of residential land by zoning type. Zoning Cluster % of Total Residential Land 1 and R2 (low density) 74% R3 and R4 (medium density) 15% R5 and R6 (high density) 6% All other mixed use 5% c. Vacant Urban Land As of June, 2013, 5% of all residential land is serviced but vacant. This means that 17 hectares is available to develop. Almost all of that land is located on the outer limits of the City in new or undeveloped subdivisions. See map Overall Vacant Properties. 29

The City neither banks land for future development nor directly services undeveloped land The City s policies regarding the rejuvenation of downtown attempt to maximize the use of existing infrastructure and services while decreasing sprawl. If all of the vacant land was built out to its maximum density (excluding land zoned SFD), the City could accommodate another 595 dwelling units. If the vacant land was only built out at half its maximum density only another 298 dwelling units could be built on currently serviced land in Lacombe. In 2011, Lacombe averaged 2.5 people per dwelling unit. This suggests that the current inventory of vacant land could accommodate up to 1,488 additional people in these new units. (Put another way, 17 hectares can accommodate a maximum of 595 units with 2.5 people per unit for a total of up to 1,488 inhabitants). d. Serviced New, Suburban Land The City of Lacombe does not own residentially zoned land outside of municipal and environmental reserves, and therefore is not able to bring new, serviced land to the market for development. The City is also not normally involved in servicing new land, particularly in larger subdivisions. The City s role in development is restricted to the issuance of permits and the charging of off-site levies associated with large roadways, pump stations and other infrastructure of a quasi-regional nature. (Unlike other jurisdictions, the City does not service raw land and charge-back developers.) Builders are not maximizing zoning potential Between 2008 and 2013, the City received applications for a total of 327 newly serviced lots (of varying sizes and land uses), with a yearly average of 55 applications. Over three-quarters of these applications were for single family homes (zoned R1). The balance of the applications was in R3, R4, R5 and R6 zones. Although greater density is permitted in these zones, the applicants rarely sought the allowable density and, overall, settled for 65% of the total density possible on these sites. For example, although one developer purchased six lots of R4 land (which allows for apartment buildings), he applied to build six, single family dwellings. The following chart compares the unit density permitted under the various land use categories and the actual numbers of units achieved. 30