Overview
Introduction
The Affordable Housing Community Improvement Plan (CIP) was approved by Ottawa City Council on April 17, 2024. A CIP allows municipalities to direct funds and create policies for a designated project area. The Affordable Housing CIP appoints the entire City of Ottawa as the Community Improvement Project Area.
Goal and objectives
The goal of the Affordable Housing CIP is to increase the supply of affordable housing in Ottawa. It aims to reduce the financial barriers to developing affordable rental housing units.
The objectives are to:
- Facilitate the development of affordable rental housing through financial support
- Increase the supply of new affordable rental housing units in Ottawa
- Help achieve the Official Plan’s target that 20 per cent of new housing units in Ottawa are affordable
- Support the diversification of affordable housing units
- Reinforce the provision of affordable housing as a community priority
Tax Increment Equivalent Grant program
The Affordable Housing CIP uses a Tax Increment Equivalent Grant (TIEG) program. The program should incentivize the development of affordable rental units in Ottawa. TIEGs use the future property tax gains generated by a new development to help finance the development through grants. The grants help offset a housing provider’s revenue loss when including affordable units in their development.
The TIEG program provides fixed grants between $6,000 and $8,000 per affordable unit per year for 20 years. A minimum of 15 per cent of the total number of units in a development and a minimum of 15 per cent of each individual unit type must be affordable. For the term of the agreement with the City, rental rates must be at or below city-wide Average Market Rents (AMR). The total annual grant shall not exceed 50 per cent of the incremental increase in property taxes for the development.
The grant may be stacked with programs and funding from other levels of government (e.g., the Canada Mortgage and Housing Corporation or the Federation of Canadian Municipalities). The program can also be stacked with other CIP programs offered by the City of Ottawa. However, if the combined grant funding of all CIP programs exceeds 100 per cent of the municipal property tax uplift, the total grant paid in any year will not exceed 100 per cent of the municipal property tax uplift.
Grant payment and implementation
Implementation
The tax grant program has an open intake window. To apply, a project must have its Site Plan Control application submitted, or Building Permit submitted if the project does not require Site Plan Control. However, the application must be submitted prior to Occupancy Permit issuance.
The Director of Housing Solutions and Investment Services can approve applications with a total grant value of up to $2 million. City Council must approve applications when the total grant value is more than $2 million.
If approved, the applicant will have to enter into an agreement with the City of Ottawa. The agreement will outline the conditions for receipt of the grant. For affordable rental units at or below 80 per cent of Average Market Rent (AMR), tenants must be selected from the City of Ottawa’s Below Market Rent wait list. Units with rents between AMR and 81 per cent of AMR may be advertised to the public, with a maximum household income allowed.
Program intake will run until the end of 2026. After 2026, staff will complete a program review and report back to Council with their recommendations.
Payment
The grant will be paid annually once:
- The project is complete
- Final building inspections are complete
- An Occupancy Permit has been issued
- All deficiencies have been addressed
- The property has been reassessed by the Municipal Property Assessment Corporation (MPAC)
- All assessment appeals relating to the value of the Lands, before the additional assessment or as to the additional assessment, have been filed and decided
- It is confirmed that:
- The units provided match the agreement
- Property taxes are paid in full and are not in arrears
- The new household income is within the income threshold or households are from the City of Ottawa’s Below Market Rent waitlist.
Monitoring
It is important that the Affordable Housing Community Improvement Plan makes progress towards its goal. It will be monitored by collecting the following information:
- Number of applications
- Number of new affordable residential units and unit types created
- Increase in assessment value of participating properties
- Estimate and actual amount of municipal assistance/grants provided
- Value of investment leveraged
Information is collected at the project level and combined for annual reports to City Council.
Apply for a Tax Increment Equivalent Grant
The Affordable Housing Tax Increment Equivalent Grant (TIEG) program incentivizes the development of affordable rental units. It provides a yearly fixed grant for 20 years. The grant helps offset the revenue loss housing providers experience when incorporating affordable units in their developments.