It’s one of the biggest concerns of the moment — a central theme of the last provincial election and our current mayoral campaign. It appears on most candidate platforms and they report that it is the most reported issue at the door. Among the many areas of life that have become more expensive, the cost of housing worries many the most — for good reason. Home prices in Ottawa hit record highs during the pandemic and rents skyrocketed. While prices are starting to fall with higher interest rates — the median resale price of a home has fallen more than $100,000 in recent months — homes are still selling more than a year ago. So what should we do? The Ontario government has proposed two main solutions: build more homes and reduce “red tape” at city hall. Some mayoral campaigns have also jumped on board the supply train. Mark Sutcliffe, for example, promises to pave the way for 100,000 homes to be built in a decade, or 10,000 a year. And they all seem to promise a more efficient design process. That might sound good, but what does it actually mean?
Home supply statistics
Let’s start with building houses. When advocates advocate increasing housing supply, it’s important to know what’s actually happening on the ground in Ottawa right now. In each of the last two years, the city issued more than 11,000 building permits for new housing. While not all projects are necessarily completed in the year their building permits are issued, it’s safe to say Ottawa has built about 10,000 homes in each of the last two years. According to the Canada Mortgage and Housing Corporation (CMHC), the capital is on track to break ground on more than 10,000 this year as well. It’s worth mentioning that new home activity over the past two years has been a big jump—about 30 percent—over 2019. There’s no guarantee that homebuilding will continue at its current pace, but it’s important to know that the Ottawa can, and is currently building the number of houses that are on Sutcliffe’s platform. WATCHES | Sutcliffe housing promises:
Sutcliffe promises 100,000 homes over next decade if elected mayor
Ottawa mayoral candidate Mark Sutcliffe is pledging to streamline the development process to make way for 100,000 new homes over the next decade, focusing on intensification within Greenbelt boundaries. There is also significant housing construction capacity in Ottawa. Over the past decade, the planning commission has approved rezoning applications for more than 48,000 residential units. Only 7,000 were actually built. In other words, there are 41,000 potential intensification area homes already pre-planned, homes that can be built whenever a developer thinks the time is right. That’s to say nothing of the ability to build more than 75,000 homes on vacant Ottawa land, including agricultural land outside of Ottawa’s residential area. And that doesn’t include the extra 1,200 hectares added to city limits for developed land as part of the official plan — a major development plan the province has yet to approve.
The “reduction of municipal fees” argument.
The status quo for housing construction will not be enough, however, because estimates for the city’s population growth range between 40 and 50 percent over the next several decades. We must maintain the current rate of construction. This sounds simple, but doing it sustainably while ensuring affordability is more complicated. Some applicants want to reduce or eliminate development fees on multi-family projects that include a certain percentage of affordable units. (For the purposes of this argument, we’re setting aside the fact that the term “affordable housing” is used confusingly to denote everything from publicly subsidized housing to rent discounts in private facilities.) WATCHES | McKenney housing promises:
McKenney wants to end ‘chronic homelessness’ if elected Ottawa mayor
Ottawa mayoral candidate Kathryn McKenney has announced a series of proposed measures designed to increase access to housing for the city’s most vulnerable residents. Development charges are costs imposed by the city on new homes to pay for development – think pipes, transit, community centers – and they add to the cost of a new home. Those taking effect next month can add $30,000 to the cost of a new home in a subdivision or more than $17,000 to the price of a high-rise apartment. Waiver of these fees should indeed spur construction, as it did when Ottawa tried it in the 1990s to encourage downtown intensification, but it robs city coffers of many millions of dollars. That money has to come from somewhere — increased taxes, other fees — or spending has to change. This inconvenient part of the equation is not talked about much for hoogies. Consider the Parkland cash-in-lieu policy recently adopted by the council, including mayoral candidate Catherine McKenney. The city collects money from new development to pay for the parks, but realized the amount it was charging wasn’t going to cut it. The way the revamped policy works, the park fee is 10 percent of the land value in subdivisions, but 25 percent for a 20-story high-rise. That means, according to one industry example, a condo buyer could pay $18,000 under these new park fees, while a homeowner in a subdivision could only pay $7,700. You won’t find many people who are against parks, but we are supposed to encourage intensification. When it comes to the meter replacement policy for parks, the city is making it more expensive to build these units. McKenney argues the fees are necessary because parking within the Greenbelt is “not cheap.” However, they said there would be a review of development charges next term with a view to “shifting” costs “to incentivize smart development”.
The new council’s biggest political challenge
As for the “red tape” argument, most processes could generally use a tweak. For example, the city has a poor record of approving site plans — the last major part of a project before construction moves forward — anywhere near council-approved deadlines. Sure, improvements could be made, but that would probably require more staff. It doesn’t help that the city’s respected general planning director left unexpectedly in August. The next council term faces a dilemma about the future of housing in this city, what it looks like and where it’s going. Pro-zoning properties to accelerate the construction of semi-triples and other types of apartment buildings? The city has already begun the process of developing a brand new comprehensive zoning ordinance. It is a dry technical undertaking and will be one of the most difficult political tasks for the new council. Many people will push back on sprawl, support intensification and want action on climate change, but almost no one thinks their own neighborhood needs more housing. We will tell the younger generation that their house may not have a porch or deck in the back yard, while at the same time asking older communities to accept the look of their neighborhood will change over time. We will ask wards that have seen intensification to accept more, where residents will surely demand that the outlying areas take their share of mid-sized flats, even high-rises. All this to say that affordable housing is complex, something we must remember as the slogans and promises flow freely as the election campaigns head towards polling day on October 24.
