The City of Ottawa’s finance committee has approved an agreement to fast-track building up to 3,000 affordable and mixed-income homes in a partnership with the federal government.
Prime Minister Mark Carney and Mayor Mark Sutcliffe
announced the partnership in December
. The terms have now been agreed to by both the city and
Build Canada Homes
(BCH), a new federal agency launched last September.
The city’s end of the deal includes reducing or waiving development charges, permit fees, cash in lieu of parkland and property taxes. The agreement will be before city council on April 22 for approval.
Under the agreement, the city is receiving funding for 1,000 new affordable or supportive units in Ottawa coming directly from the city’s priority list, an investment of $150 million over the next two years, Sutcliffe said.
BCH will invest to build 2,000 new units on federal land, which will remain under federal ownership. BCH has identified 1495 Heron Rd. and Wateridge Village in the east end near the Montfort Hospital as the initial sites for development under the partnership.
Sutcliffe called it a “historic deal.” As many as 1,800 will be affordable and supportive units, and that includes 200 that will be deeply affordable, he said.
“These will be truly mixed-income communities with the emphasis being on providing affordable and supportive housing. Well over half of these units will be lower, or significantly lower, than what the market can typically provide,” Sutcliffe said.
The city is eliminating development charges on all the units being built by the federal government, but that will be offset by the property taxes generated on the market units they are building, Sutcliffe said. The total commitment from the city is between $200 million and $245 million in waived taxes, fees and other charges.
BCH will be prioritizing the development of three- and four-bedroom family-size units, aiming to exceed the minimum requirements of the zoning bylaw, said Will McDonald, director of the city’s strategic projects office. The partnership will also include requirements to generate long-term, predictable demand for Canadian factory-built housing, Canadian lumber and materials.
The city would be waiving property taxes for affordable units for 75 years to help keep the operating costs of these units low, McDonald said. This equates to $2,900 a unit per year for the 75-year period, for a total of $135 million to $185 million.
“These sites are at locations that have existing infrastructure to support the developments and are large enough to incorporate parks and other amenities,” McDonald said. “So, even though cash in lieu of parkland has been waived as part of this partnership, it would not have been required for these sites.”
The cost to create sustainable affordable housing requires addressing both the cost to build, such as land construction financing and soft costs and the cost to operate the project, he said. BCH will be providing the land financing and capital to construct the homes and will ensure their affordability for 99 years.
BCH and the city are to hold joint public consultations to ensure the community understands what is being proposed for the sites and can provide input before planning decisions are made and site plans are finalized.
The city is not putting any cash into the agreement, Sutcliffe said.
“We are simply forgoing future revenue. All of it is revenue that we would not collect if these homes were not being built, and a huge portion is going to reducing the cost of affordable and supportive homes so the residents of those homes will pay less,” he said.
On paper, the value of the agreement is about $400 million. “However, land, labor, material and financing, the actual value of what the federal government is contributing is more than $1 billion,” Sutcliffe said.
The goal is to start construction on the 3,000 homes within the next 12 months and to have them ready for occupancy in about three years, said Marcia Wallace, the city’s general manager of planning, development and building services.
With any new development project, there are always site-specific elements, she said.
“That’s why we’re eager for council to make a decision so we can get busy on the cross-department, cross-agency kind of work we’ll need to happen to get something built on each of these sites.”
There were numerous questions about how the deal would play out, ranging from the possibility of cost escalations, differences in how Ottawa and BCH calculate affordability and the accelerated public consultation process.
Toon Dreessen, president of Architects DCA in Ottawa, wanted to know more about the sustainability of the homes being constructed.
“Eighty per cent of the cost of a building happens after it’s constructed, and there is nothing in the BCH proposal that speaks to things like a decarbonized building zero operational carbon, a higher durability standard that provides increased value and decreased operating costs,” he said.
Bay ward Coun. Theresa Kavanagh expressed concern about the public consultation process.
“There’s no information at this point to the public about these projects,” she said.
The city will still engage the community in the way it would through the normal planning process, Wallace replied.
“It will look different because it will be truncated, it will be shorter, it will be more condensed, because the objective is to get something moving quickly,” she said. “But I see this as an opportunity.”
Speaking to reporters after the finance committee meeting, Sutcliffe said getting the agreement done was the result of tough negotiating with BCH.
“If this is passed by council, we’re going to have $150 million coming to the city to invest in affordable and supportive housing projects that otherwise would have to wait a lot longer to get built,” he said. “I think it’s a great deal for the city.”
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