  We present the optical identification and spectroscopy of the host galaxy of
GRB 050826 at a redshift z = 0.296 +/- 0.001. Image subtraction among
observations obtained on three consecutive nights, reveals a fading object 5
hours after the burst, confirming its identification as the optical afterglow
of this event. Deep imaging shows that the optical afterglow is offset by 0.4
arcseconds (~1.76 kpc) from the center of its irregular host galaxy, which is
typical for long-duration gamma-ray bursts. Combining these results with X-ray
measurements acquired by the Swift XRT instrument, we find that GRB 050826
falls entirely within the subluminous, subenergetic group of long gamma-ray
bursts at low redshift (z < 0.3). The results are discussed in the context of
models that possibly account for this trend, including the nature of the
central engine, the evolution of progenitor properties as a function of
redshift, and incompleteness in current gamma-ray burst samples.
