Ottawa to get $176M from federal housing fund

The federal government is pledging to give Ottawa about $176 million through a housing deal that commits the city to loosen zoning rules to allow more units in return.

The money comes from the federal government's $4-billion Housing Accelerator Fund (HAF), which Housing Minister Sean Fraser has been doling out to cities that show "ambition" on helping speed up construction.

Federal and municipal officials announced the agreement on Monday at the site of an Ottawa Community Housing project at Wateridge Village on a former east-end military base.

In a media release, the federal government said the deal will fast-track more than 4,400 housing units in Ottawa over the next three years, while spurring development of thousands more over the decade.

Referring to the multimillion dollar deal as a "huge downpayment," Ottawa Mayor Mark Sutcliffe said the city worked hard to get as much money as it could from the federal government.

"I think our job at the City of Ottawa, and with the support of our federal partners, is to make it as easy as possible to build as fast as possible," Sutcliffe said at the Monday morning announcement.

"Then it's up to the development community and to homebuyers to take it from there."

'Expectation' city will follow process

The announcement comes less than three months after city council asked staff to look at allowing four units on all serviced lots as part of an ongoing zoning bylaw review. It would still need approval at council, which is expected sometime next year.

Fraser has talked up that policy, which would allow fourplexes even in low-density areas, in his negotiations with cities across the country. At least one city, Windsor, Ont., that didn't make the change lost out on the money.

Fraser was not at Monday's announcement, which instead saw Kanata–Carleton MP and Minister of Families, Children and Social Development Jenna Sudds standing beside the mayor.

Sudds didn't say precisely what will happen if council doesn't pass the bylaw, but called following the process to do so "an expectation."

"There's a process in play to get towards the final approval, if you will, to four units as of right," she said. "Obviously that is an expectation, that we continue to move on that path, and I have full confidence in our community and in our city that we will reach that."

The mayor insisted that the bylaw will not be fast-tracked and will undergo the usual level of public consultation.

Minister of Families, Children and Social Development Jenna Sudds, seen here during Question Period in the House of Commons on Oct. 16, 2023, attended Monday's announcement alongside Ottawa Mayor Mark Sutcliffe. (Patrick Doyle/The Canadian Press)

What Ottawa will need to do for the cash

The city's application, approved by council in July, listed nine separate actions to speed up housing construction in Ottawa. The city provided an updated list of commitments on Monday. They include:

• Using HAF money to support non-profit affordable housing projects that are ready to build but lack funding.

• Easing zoning rules around major transit stations, corridors and main streets to allow taller buildings.

• Making city-owned land available quickly for affordable housing.

• A community improvement plan providing financial incentives for affordable housing.

• Streamlining planning approvals, including through e-permitting and digital applications.

• Removing barriers "to allow at least four units per lot city-wide" and allowing multiplexes and lowrise apartments "across neighbourhoods."

• An on-site stormwater management tool to support multi-unit infill developments.

Another commitment — clearing bureaucratic hurdles to converting office space into housing — already passed council in November.

According to a city estimate, about 90 per cent of the money will go toward building affordable housing, while just 10 per cent will support streamlined approvals and enhanced services.

Homebuilders rejoice

Jason Burggraaf, executive director of the Greater Ottawa Home Builders' Association, said the local construction industry has the capacity to build the added homes foreseen in the deal.

He said most will likely be highrise towers.

"Ottawa is not going to be as low rise of a town as we're used to being, but that's a good thing," he said. "It means more amenities, more schools more grocery stores ... and a revitalization of some of those neighbourhoods."

Burggraaf said Ottawa's action plan, notably its efforts to speed up approvals, will make a big difference.

"Timelines are the most important thing," he said. "Time is money in every endeavour, and that's what is really going to help housing in Ottawa."

Burggraaf said he's confident the four-unit policy will move forward, calling it a "critical piece" of the city's plan to add units that could be transformative for Ottawa.

Planning and housing committee chair Coun. Jeff Leiper and vice-chair Coun. Glen Gower both predicted the change to allow four units will pass council in some form, though both expect pushback.

Twelve councillors — with the mayor, a majority — attended the announcement Monday.

Almost the entire Ottawa Liberal caucus and about half of council attended Monday's announcement. (Maxim Allain/CBC)

Housing shortage requires huge investment

When council passed the action plan, the city estimated those efforts would together support the creation of nearly 7,000 housing units, rather than the 4,400 estimated in the new deal.

Monday's announcement follows deals with London, Ont., for $74 million, Halifax for $79 million, Mississauga, Ont., for $113 million, Vancouver for $115 million and Toronto for $471 million, among others.

Across Canada, the HAF aims to trigger construction of hundreds of thousands of additional homes in the next decade.

But a 2023 report by the Canada Mortgage and Housing Corporation estimated that the country will need about 3.5 million more homes by 2030 — beyond what would be built anyway — to push affordability back to 2004 levels.

Ontario alone will need about 1.5 million, according to the report.

Last year, there were 8,632 housing starts in Ottawa, according to CMHC, most of them apartments.

HAF money comes with conditions, as cities are subject to reporting requirements and progress reviews to make sure they're implementing commitments. Only part of the total will be released up front, with the rest coming in annual instalments over three years.