City of Ottawa to prepare plan for affordable rental funding from federal government

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The City of Ottawa’s housing and planning committee has asked staff to get its ducks in a row to get a share in a $1.5-billion federal non-profit housing fund.

Prime Minister Justin Trudeau announced the new Canada Rental Protection Fund on April 4. The program is aimed at helping non-profit organizations acquire more rental units and ensure they remain affordable.

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Although few details were released, the fund is to provide $1 billion in loans and $470 million in contributions to non-profits and other partners to help them acquire affordable rental units. More details are expected in the April 16 federal budget.

An acquisition strategy focusing on nonprofits increases housing stock that is guaranteed to be permanently affordable, Kaite Burkholder-Harris, executive director of the Alliance to End Homelessness Ottawa, told the members of the city’s planning and housing  committee on Wednesday.

That ensures the housing is available for those with the lowest incomes and relieves pressure on the whole system, she said.

“Ironically, focusing on increasing non-profit housing creates real competition in the overall market because there are truly affordable options for people.”

Two weeks ago, the committee received a loss of affordable rental housing report that found Ottawa was losing 31 affordable rental housing units for every affordable rental housing unit built between the census years of 2011 and 2021.

Theoretically, even if the city built 500 affordable units a year instead of the 100 units currently being built, that would only result in reducing the impact to six units lost for every unit built, said housing researcher Steve Pomeroy, who crunched the numbers in the report based on the availability of apartments and rooms rented for less than $1,000 a month.

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The other choice is to slow those losses. One approach would be to move moderately affordable stock in the private market to non-market ownership, said Pomeroy, a board member with the Ottawa Community Land Trust, which is acquiring market rental properties and converting them into non-profit rentals.

“Run by a non-profit, we would be able to preserve the existing lower rents that are already there,” he told the committee.

One recent example of this approach was the $86-million acquisition of two Minto properties in the Tanglewood and Chesterton and Bowhill areas in the west end, adding 311 townhomes to the Ottawa Community Housing supply. 

If the city could formalize a process based on lessons learned in the Minto acquisition, it would enable non-profits to continue to address affordable rentals through acquisitions as well as building new affordable housing, Pomeroy said.

He urged councillors not to rely on federal funding alone. Even the $1.5 billion in federal funding is not very much when it has to spread throughout Canada, he said. The city could allow non-profits to borrow more to acquire affordable housing by doing things like waiving property taxes, for example.

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Coun. Stephanie Plante, who was behind the motion that the city assess the merits of an acquisition fund, asked Pomeroy whether such fund would raise the prices of modest rentals just because the government was motivated to buy them.

Pomeroy said the land trust had “kicked a lot of tires” on rental properties and found that they were already overpriced.

“There’s nothing that we’re going to do that’s going to raise the price any higher,” he said. “Hopefully, we can do something to bring it down.”

Homelessness is the extreme outcome of a housing market that’s increasing unaffordable, even for middle-class households, Burkholder-Harris told the committee.

Renters who use to be able to find reasonably-priced two- to three-bedroom units for under $1,500 a month are now paying more than $2,500. Those who were previously able to find units for under $1,000 a month are on the brink of homelessness, accruing rental arrears and having to choose between food and rent, she said.

Right now the federal money is on the table. It might not be there after the next federal election, Burkholder-Harris told councillors. At the same time, real estate income trusts need capital to build new projects and are selling off old assets, she added.

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She urged councillors to have a full strategy ready. “The time to act is now.”

Plante said city staff should evaluate funds and strategies set up in other cities, including Toronto’s Multi-Residential Acquisition Fund and Hamilton’s Affordable Housing Funding Program.

“We don’t need to reinvent the wheel because other cities are already driving up the road,” Burkholder-Harris said.

City housing director Paul Lavigne said city staff would obtain more information about the program when the federal budget was released, but it’s timely for the city to do the research and look at other jurisdictions to see what an Ottawa program might look like.

The city needs to develop an overall strategy, not a patchwork, Lavigne said. “We want to be comprehensive in terms of how we approach the preservation of affordable housing and make sure we have all the right tools in the toolbox to achieve our goals.”

The committee voted in favour of having an assessment ready for approval when the city’s long-range financial plan for affordable housing is up for consideratino later this spring.

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