Affordable Housing in Ottawa, Ontario: Part 1

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Revised 2005 November 8
COMMUNITY AND NEIGHBOURHOOD SERVICES
SOCIAL RESEARCH UNIT
Affordable Housing in Ottawa, Ontario: A Case Study of Land Use Policy and Transferability
Prepared for the Affordable Housing Implementation Team by Greg Sauer 1
Planning Student, Faculty of Environmental Design, University of Calgary
© 2005 The City of Calgary, Community and Neighbourhood Services, Social Research Unit

1 The opinions expressed in this paper are strictly those of the author and not The City of Calgary. The information contained in this report has not been verified by The City of Calgary.

1.0 Introduction and Context

Since the early 1990s, the housing market has been unable to deliver new affordable housing stock in the majority of Canadian cities. Although a number of related factors have contributed to this decline in housing starts, the federal government's decision to halt funding for social housing beginning in 1994 has been its primary cause. It was assumed and expected that local governments and non-profit organizations would make the necessary adjustments and provide this service; however, without the commensurate funding or experience to undertake this new mandate, healthy housing markets have been reduced to unacceptable levels.

One of the hardest hit municipalities was Ottawa, with average rents--a good indicator of housing affordability--lagging behind only the metropolitan cities of Toronto and Vancouver. When coupled with the lowest vacancy rates in the country, Ottawa has been left with 51,000 households in Core Housing Need (a measure used by Canada Mortgage and Housing) and a social housing waiting list that stood at approximately 11,500 in 2004 (City of Ottawa, 2005a). Given these levels of demand for affordability, it is of little wonder that Ottawa has been forced to respond to this escalating demand in recent years.

Canada Mortgage and Housing (CMHC) provides a universally accepted criterion to measure core housing need across Canada: adequacy, suitability and affordability. It is the final measure, affordability, which is the primary focus of this research. For the City of Ottawa, the core housing needs assessment suggests that 51,000 households meet at least one of these criteria, with affordability being the overwhelming concern for those in core need. Recent statistics tell the tale of the affordable housing crisis in Ottawa: seven per cent of those in need live in substandard or unsuitable living conditions and 93 percent cannot currently afford their housing (City of Ottawa, 2005a), meaning that they pay more than 30 percent of gross household income for shelter.

Although not yet at Ottawa's current demand level for subsidized housing, The City of Calgary has recognized an increasingly urgent need for affordable housing and has taken a proactive approach in addressing this issue. One of The City's approaches has been to learn from programs and initiatives that have proven successful in other municipalities. The City of Ottawa, with a similar population base and an inspired attempt to deal with this crisis, provides an excellent heuristic for The City of Calgary and the impetus for this paper.

Constructing new affordable housing is attractive to neither private for-profit nor not-forprofit developers at present, given that the revenue generated by such projects is insufficient to justify high building costs and high risks. Even without accounting for the developers return on investment (applicable for private developers only), the payback generated through affordable housing projects is not sufficient to cover associated mortgage payments.

As such, the reality of providing affordable housing in any marketplace is difficult at best and the result as been long social housing waitlists in both Calgary and Ottawa. Each city has been required to intervene in an effort to promote affordable housing through fiscal and policy decisions targeted at eliminating the funding gap.

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