Having adequate, affordable and suitable housing is key to building thriving communities. Our ability to reach our full potential through health and well-being, educational achievements, social connections, attachment to the labour market and community identity can all be impacted by the stability or the instability of our housing. The need for affordable housing is therefore, one of the key issues facing our city.
As part of municipal efforts to meet housing needs in our city, Ottawa City Council approved an Affordable Housing Strategy in February 2002. The Strategy covered a wide range of initiatives including:
- Reducing tax and regulatory barriers including effectively reducing the higher property tax rate for new multi-residential developments,
- Reducing the costs of development through initiatives such as providing land and grants, and reducing fees and charges,
- Requesting the Province to increase the duration and number of Rent Supplement units available,
- Establishing a Housing First policy for surplus City lands and leasing lands for affordable housing projects,
- Establishing a municipal By-law designating housing as a municipal capital facility, and
- Establishing a capital development program.
To date, the implementation of the Affordable Housing Strategy has resulted in the creation of the following tools for affordable housing development:
Some affordable housing incentives are available to developers "as-of-right". These are incentives that were created through By-laws of Council and include:
- Reduced property taxes: the New Multi-Residential Tax Class is for all new residential developments of multiple forms with seven units or more and provides a tax rate comparable to the residential class rate for a period of 35 years.
- Relief from development charges and building permit fees is available for all residential development in the downtown core area of the city.
Non-profit or Charitable Developers have additional as-of-right incentives which provide relief from development charges, planning application fees, building permit fees and parkland levies for the development of affordable housing. Verification of non-profit or charitable status must be presented to the City in order to receive relief.
The City's Municipal Housing Facilities By-law is a tool that gives Council the ability to grant specific development charge relief and other incentives to developers in exchange for affordable rental housing.
Specific returns are expected:
- Housing must be guaranteed to be affordable for a minimum of 20 years
- Rents can be no higher than the CMHC Average Market Rent and a minimum of 60% of the units must be at rents affordable to lower income families
- Units for lower income households must be rented to tenants drawn from The Social Housing Registry's centralized waiting list
Developers may seek discretionary incentives at any time. Proposals are assessed on merit, achievement of City objectives, and in consideration of available resources. Council must approve proposals of this kind.
Program Application and Approval Incentives
Action Ottawa is the housing program initiated by the City of Ottawa to help private and not-for-profit developers build new affordable rental housing for moderate and low-income households. Action Ottawa bundles as-of-right and discretionary incentives with additional resources of capital grants and, in some cases, City-owned land. These incentives are offered to developers through a competitive bid process.
In addition to the as-of-right and discretionary incentives, the Action Ottawa package includes:
- Capital Grants of up to an average of $60,000 per unit (Federal and/or Municipal)
- Long-term lease opportunities on City-owned land at nominal rates
In exchange for incentives, the City requires successful applicants to provide affordable rental units for a minimum of 20 years. The rents can be no higher than the CMHC Average Market Rent, as well as 60% of the units must be at rents affordable to lower income families, and these units must be rented to tenants drawn from The Social Housing Registry's centralized waiting list.
Action Ottawa applications are accepted on a proposal call basis only.
How Action Ottawa incentives fit together to make rents affordable:
As illustrated above, the combination of capital funding, tax relief and relief from municipal fees should enable proponents to reach Average Market Rent levels.
Additional assistance from the City such as land and additional capital funds should allow proponents to offer below market rents.
Financial incentives can also work in "mixed" or "blended" housing projects which contain both full market housing (which benefit from lowered property tax rates for new multi-residential construction), average market rent units and rental housing affordable to lower-income households.
The City of Ottawa's Housing Services branch ("Housing Services") serves as a facilitator for affordable housing development, providing information and advice to private and non-profit housing developers, other City departments and the community at large.
Housing Services will continue to work with affordable housing partners through implementing other aspects of the City's Affordable Housing Strategy, as well as continue to work together to advocate for increased support from other levels of government, which will create much needed affordable housing.