⭐ Our BuildCanadaHomes.org Analysis:
Takeaway:
The Ottawa Real Estate Board (OREB) has expressed that the recent federal budget, while a positive move toward enhancing housing affordability, falls short in addressing the pressing supply challenges faced by first-time homebuyers, particularly regarding the construction of "missing middle" housing types such as townhouses and duplexes. The budget allocates significant funds—$51 billion for infrastructure and $13 billion for affordable off-market housing initiatives—but critics, including OREB President Paul Czan, argue that without a cohesive focus on building market homes, the initiatives may not significantly alleviate the immediate housing affordability crisis affecting Ottawa residents.
For home builders and developers in Ontario, particularly in the Greater Toronto Area (GTA), this budget highlights an essential call for collaboration among all levels of government to eliminate barriers to construction and support the creation of diverse housing options. The emphasis on non-market housing underscores a critical gap: the need for more market-oriented solutions to foster homeownership. Developers should focus on advocating for regulatory reforms, such as the reduction of development charges and other impediments to investment in missing middle housing, to harness the governmental momentum towards more inclusive housing strategies. This matters because fostering a balanced housing supply is vital not only for the economic stability of the construction sector but also for addressing the long-term needs of the community, ultimately leading to more affordable living options for Ontarians.
The Ottawa Real Estate Board says the federal budget provides a good step forward to addressing housing affordability, but falls short of solving immediate supply challenges for first-time homebuyers in the city.
In a news release on Wednesday, the board said the budget did not encourage the construction of low-to-medium-density housing like townhouses, duplexes and low-rise apartments, which are often seen as entry points for first-time homebuyers.
This phenomenon is often called “missing middle housing” by advocates, urban planners and architects because these types of residences are under-represented in new housing supply. The majority of housing starts in Ottawa are rental apartments, followed by rowhouses and single-family homes, according to data from Canada Mortgage and Housing Corporation.
“We definitely need a budget that’s going to be investing in the future of Canadians, and despite the budget being a deficit, it’s something the government has to do,” said OREB president Paul Czan in an interview with the Ottawa Citizen.
“We wish that there was more focus on housing in the budget. Giving more attention to supply would have been much more welcome. Ultimately, that’s the biggest problem that we’re still facing.
“We need to provide people with lateral movement (in the housing market), into their first home, and fill in that missing middle.”
Czan’s comments came after Finance Minister François-Philippe Champagne tabled Budget 2025 on Tuesday.
The budget proposed $51 billion in funding over 10 years for the Build Communities Strong Fund. The fund is to support infrastructure projects like housing, health care and education.
The budget also proposed $13 billion in funding over five years for the federal government’s Build Canada Homes initiative, which aims to increase construction of affordable off-market housing by building them at scale. Ottawa was one of six cities initially selected as sites for the development of 4,000 factory-built homes on federal land, with the capacity to scale up to 45,000.
“Canada faces a steep housing supply gap that threatens affordability, opportunity and the ability for Canadians to build their lives here at home,” Champagne said in his address presenting the budget to the Commons.
He described the budget as the “most ambitious housing plan since the Second World War.”
Ottawa Mayor Mark Sutcliffe welcomed the investment in affordable housing, but said he’s waiting for more details before commenting further.
“Any investments that are being made in infrastructure and housing are very welcome. I’m looking forward to seeing the details on exactly where that will happen,” he said at a news conference following the tabling of the budget.
“I’ve had several conversations with the prime minister and with members of his cabinet about the unique opportunities we have in Ottawa to invest in housing, to use federal land to build housing. There’s lots of opportunity there.”
But Czan said the Build Canada Homes initiative isn’t enough to solve the affordable housing crisis in Ottawa because it’s too focused on non-market rental units.
There needs to be a mix of non-market rental units and affordable homes for first-time homebuyers, he added. The removal of the GST for first-time homebuyers’ purchase of a new build under $1 million is a step in the right direction, he said, but needs to be coupled with supply-oriented solutions.
“If you look at what has been built in all the major cities in Canada over the last five years, it’s been a lot of non-market housing. Being able to provide the supply that’s needed in the market housing category would definitely lead to higher homeownership rates and communities filled with people that are owning their properties,” he said.
The federal budget is expected to go to a vote on Monday, Nov. 17.
Families struggling to find affordable homes: report
Czan’s analysis also comes as Ottawa families are struggling to find homes they can afford.
According to a recent survey conducted by Abacus Data for OREB, 82 per cent of Ottawa residents are concerned about the city’s housing situation. Around 67 per cent of those surveyed said local housing is unaffordable, and 50 per cent said they doubt they will ever be able to afford to buy a home in their community of choice.
Sixty-two per cent of respondents also said they are worried that they could lose their home or rental unit if their financial situation suddenly changed.
It’s not just renters and aspiring homebuyers feeling the pinch.
Data from the city’s 2024 Housing Needs Assessment also suggested that thousands of homeowners are experiencing heightened vulnerability in the housing market due to soaring mortgage rates and costs. The proportion of homeowners in Ottawa paying $2,000 or more per month for housing costs nearly tripled from 2006 to 2021 (from 11.5 per cent to 34.2 per cent).
Meanwhile, the percentage of homeowners paying between $1,500 and $1,999 per month dipped from 20.4 per cent in 2006 to 17.8 per cent in 2021.
“Families are being priced out,” Czan said.
There may be some relief coming in the future. A report by the CMHC in July suggested that Ottawa saw an annual increase in average advertised rent prices but at a slower pace.
According to the City of Ottawa’s housing approvals dashboard, 13,662 housing starts were reported between the first quarter of 2023 and the fourth quarter of 2024.
The CMHC also said 9,000 rental apartments are currently under construction in Ottawa, setting a record for the city.
The sheer amount of housing approvals, along with slower population growth, will cause rental prices to fall in the future.
But Czan said more collaboration needs to happen between all levels of government to address the housing affordability crisis and reduce barriers to buying a home.
“Collaboration amongst all levels of government would be something that would be positively viewed by our association and many other associations in real estate,” he said.
“Any measures that could help fill the gap in terms of missing middle housing would definitely be a welcome move for our marketplace.”
He said, for example, the City of Ottawa should remove development charges because they are a roadblock for developers who want to build more housing. This leads to lower housing starts in any given year.
“Removing those barriers and removing any startup costs and any costs that prevent a barrier to entry ultimately would lead to much more supply being in the market. Ultimately, those costs that are put onto the builder end up getting filtered over to the consumer side of things,” Czan said.
He also said the city, province and federal governments can work together to provide developers with incentives to build more missing middle housing, especially since officials from all three levels of government are reviewing their financial plans for the next year.
“Having a focus on those low-rise apartments and medium-density housing units would definitely be a welcome thing that should be considered in the (city, provincial and federal) budgets,” Czan said.
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Source: Read the original article at Federal budget falls short in addressing housing affordability in Ottawa: real estate board on ca.news.yahoo.com
