Advocates push city to boost $15M affordable housing budget
Rising construction costs mean fewer units, committee hears, while rental costs present issue, too
Housing advocates and some city councillors argue the City of Ottawa should spend more on building affordable housing than the $15 million currently planned for 2023, given a spike in rents and the rising costs of constructing the units.
Four of 12 councillors on the planning and housing committee dissented on that capital portion of the budget on Wednesday, pointing to how housing affordability was a key issue in the fall municipal election, and is a major concern for residents.
The $15 million in municipal spending for new affordable housing construction became the norm in the last term of council.
As the meeting began, both Kaite Burkholder Harris of the Alliance to End Homelessness and Valerie Wright of the Council on Aging of Ottawa had urged the committee to double the city's capital spending to $30 million.
"We know that because of inflation, rising interest rates and debt service costs, $15 million today is not what it was even a few years ago," agreed Mike Bulthuis of the Ottawa Community Land Trust.
All three organizations suggested the city explore other ways to add units beyond traditional construction, such as using vacant city land.
Bulthuis's group is focused on buying up existing rental units on the private market that can be leased by non-profit organizations to try to "slow that bleed."
He and Burkholder Harris suggested Ottawa look to the City of Toronto, which has begun a "multi-unit residential acquisition" program to provide grants to non-profits to do exactly that.
Wright argued the city needs to offer more housing options for older adults so they can age in their communities affordably, though not necessarily in homes that are too large for their current needs.
Need to find somewhere to cut
Several councillors were sympathetic to those concerns, although no one tried to boost the $15 million at the committee level, because rules require they find an equivalent cut.
Committee chair Coun. Jeff Leiper said even when the debate heads to full city council on March 1 for a final vote, it will be hard to find millions for new affordable housing given his colleagues' desire to keep taxes low. There simply isn't that wriggle room, he said.
"This is the implication of a decision taken three months ago to cap the budget at what I consider to be an arbitrarily low 2.5 per cent tax increase," said Leiper. "If we want to make significant progress on key files ... like affordable housing and transit, we have to contemplate either big cuts elsewhere in the budget or raising that tax rate."
Troster dissented on the capital spending for housing, along with planning and housing committee members Riley Brockington, Laine Johnson and Theresa Kavanagh.
Housing plan to be updated
Acting chief financial officer Cyril Rogers promised the figure would be updated by the 2024 budget, after staff revisit the long-term financial plan for housing.
Leiper said it will be important for housing advocates and city councillors to push for an increase.
As it stands, the City of Ottawa has been unable to meet its own target of 500 units under that strategy. Rising construction costs mean that money doesn't go nearly as far, but that's not the only problem.
The plan counted on the federal and provincial governments regularly matching the city's own municipal $15 million allocation each year, but they have yet to commit to that, explained Donna Gray, general manager of community and social services.
Instead, Ontario provides about $5.9 million yearly. The federal government, meanwhile, announced funding of $18.7 million for 48 units in Ottawa on Feb. 13 in its third round of the federal "rapid housing initiative," but that is one-time funding for specific projects.
Rising rents was also a key concern for many on Wednesday.
The average rent for a two-bedroom apartment rose 4.5 per cent in Ottawa from 2021 to 2022 and now averages $1,625 for a purpose-built rental and $2,075 for a condo, according to the annual rental report released in January by the Canada Mortgage and Housing Corporation. Rents jumped significantly when a unit turned over to a new tenant, it said.
The average home resale price in Ottawa, on the other hand, dropped to $676,272 in January from $769,274 in the same month in 2022.
Applications from developers have also dropped from their record highs a year ago as builders, too, face much higher interest rates, said the city's director of planning services Derrick Moodie.