All levels of government agree that Ottawa urgently needs more housing, but policy friction and stalled incentives are keeping shovels out of the ground, attendees heard at the Ottawa Real Estate Forum last week.

Panel sessions at the annual event held on Oct. 20 discussed a stalled development fee reduction pledge, federal lands being released for development and the challenges facing Build Canada Homes among other topics.

As in many cities, high development fees have been highlighted for stifling housing development in and around Ottawa.

In March, the Canada-Ontario Partnership to Build program was announced: an $8.8 billion fund to support the reduction of development charges (DCs). In exchange for a fee reduction of 30 to 50 per cent, participating Ontario municipalities were promised funds for much needed infrastructure projects.

While the province pushed Ottawa to quickly apply for the program, the Ontario government has failed to deliver its side of the deal, said Ottawa's general manager of planning, development and building services Marcia Wallace at the forum.

The resulting uncertainty has paralyzed activity.

Municipal changes were approved

In July, Ottawa’s municipal council approved its application to the program that would reduce Ottawa’s developer charges by 54 per cent over three years, Wallace said. 

“We had a bump of building permits around April, May, that was because of the GST/HST [reduction] coming to fruition, and then it's slowed down pretty dramatically again,” she said.

"We got a heavy influx of planning applications in anticipation that [the development charge reduction] will be here, but building permits are really slowing down because people are waiting. They're waiting to see if they're going to get this incentive."

Inside Ottawa's Greenbelt, DCs are as high as $57,827 for the construction of a single-family home and $64,634 in the suburbs. Apartment building DCs can cost over $30,000 per unit.  

“From a development perspective, the reduction in DCs is so impactful to our projects," said Colonnade BridgePort SVP of development Kelly Rhodenizer, in a panel session on whether development is getting easier or harder in Ottawa. “We specifically build multifamily right now, and the DC fees can be anywhere from $3-$5 million for a project,” she said.

The promised fee reduction "would make a big positive difference in terms of unlocking projects that just can't get the math to math,” she added.

NCC considering 60 sites for potential development

Forum attendees also heard that the National Capital Commission (NCC) plans to offer more parcels of its land for housing development.

The NCC owns 11 per cent of the National Capital Region which includes undeveloped land like the LeBreton Flats and protected areas like Ottawa’s Greenbelt and Gatineau Park in Quebec.

Across the capital, NCC head of real estate Jean-Philippe Lavallée said the commission is considering 60 sites that could be brought to the market for development.

“There will be three to five market offerings per year for probably the next five years. That's our target, and at the end of it all, we want to make lands available to bring close to 20,000 units to the market,” he said. 

He added: “We were lucky enough to be able to close on two transactions last year and launch three other market offerings through the Federal Lands Initiative to bring some much-needed housing and affordable housing to the market.”

The development of LeBreton Flats is already underway with two residential towers nearing completion and planning underway for an entertainment district, a new event centre and mixed-use residential and commercial buildings. Lavallée said, when complete, the developments will total 6,000 residential units. 

Build Canada Homes facing challenges

Also speaking at the forum was the head of Build Canada Homes (BCH), the newly created Crown Corporation tasked with supporting housing development.

The goals of the organization are to reduce construction time through use of new technology like modular building, to find underused government land available for development and to lower the cost to build, according to the BCH website.

CEO Ana Bailão told the forum that BCH hasn’t seen progress in cost reduction, but they are optimistic. “We're hoping that some of this innovation will eventually have an impact on costs,” she said. “Right now, we're not seeing it. We’re not seeing mass timber being cheaper, we're not seeing the modular [housing] being cheaper."

Bailão said BCH will announce targets for housing numbers in the coming weeks and is planning to revamp its project proposal process.