A new report from the Canada Mortgage and Housing Corporation (CMHC) says Ottawa is building homes at the fastest rate in nearly 50 years – but experts say it may not make much of a splash in massive demand.
Housing supply report which was released on Tuesdaysaid Ottawa’s population is growing faster than the rate at which new homes are being built.
Ottawa has seen strong population growth since around 2015, said Mike Moffatt, senior policy director at the Smart Prosperity Institute, a University of Ottawa-based think tank.
“The takeaway is that we have a housing shortage, CMHC recognizes that, and it’s kind of up to policymakers to figure out how to address the shortage,” Moffatt said.
Scheduling systems aren’t keeping up, says expert
There were over 10,000 housing starts in 2021. The majority of them were in suburban areas as well as urban areas just outside the Greenbelt.
Moffatt said more housing is good, but planning systems must take into account the type of housing needed and its location.
“When the population starts to grow, all of a sudden our systems — our planning, our zoning, our permits — all struggle to catch up.”
That includes cutting red tape to allow for downtown densification, he said. The majority of construction is taking place outside of downtown Ottawa.
“Housings are generally built where they are allowed to be built,” Moffatt said. “In our cities, it’s quite difficult to build infill.”
Ottawa adds “missing intermediate” housing
The report also noted that Ottawa has a large number of townhouses being built compared to other cities – about a third of all developments were townhouses.
Barrhaven, Gloucester, West Orleans and Stittsville were listed as areas with significant numbers of townhouse starts in 2021.
Steve Pomeroy, senior researcher at Carleton University’s Center for Urban Research and Education, said high amounts of this type of housing are a good sign.
In many cities, Pomeroy said the majority of homes available are large single-family homes or very small apartments.
“Ottawa is doing a much better job of creating that missing middle,” Pomeroy said.
Affordability remains an issue
The report says supply is ‘the biggest issue affecting housing affordability’ in Canada – but Pomeroy said increasing housing supply is unlikely to have a significant impact on capacity of the average Ottawa resident to buy or rent a home.
Contrary to popular belief, he said the increased supply would not lower prices overall.
“Yes, we are increasing supply, but are we increasing it at the right price?”
Pomeroy said new builds generally fetch higher prices than older properties – while prices for older properties don’t come down.
“It ends up crowding out people at the bottom of the market,” Pomeroy said. “Which is going to be a real, real political challenge for the city, the province and the federal government.”