City officials say they won’t be able to meet affordable housing goals without more help.

The City of Ottawa will not be able to achieve its long-term goals to build new affordable housing without “significant new, expanded and ongoing support” from higher levels of government, finance officials said Wednesday.

Council members have set a goal of creating 500 new affordable housing units per year, but have yet to meet that goal once.

Since the plan was approved in 2021, Ottawa’s economic and social situation has changed dramatically.

Increasing construction costs and funding rates have slowed the pace of construction, and the influx of asylum seekers has put unprecedented strain on the shelter system, the staff noted in the report.

That has created a $931 million hole that staffers say only the federal and provincial governments can fill.

“It’s an ambitious plan,” Somerset Cone said. Geoff Leiper, chairman of the council’s planning and housing committee.

“I hope these other levels of government are watching… and hopefully they have the ambition to match this to the scale that only these other levels of government can offer.”

‘Giant Hole’ That Needs Filling

Between 19 and 222 apartments were created each year between 2020 and 2023, and the city will go bust again in 2024 with 393 new homes.

Staff estimates that the cost of building affordable housing has increased by more than 150 percent. Building 500 apartments in 2021 required about $56.5 million in equity capital, but is projected to cost $142.2 million next year.

Council members at a joint meeting of the planning, finance and corporate services committees on Wednesday expressed frustration with the situation, which also impacts funding for supportive housing to help people escape homelessness.

“Having to be so willing to look to other levels of government to solve these huge problems that are rooted in poor decision-making at the federal and provincial level is really very frustrating,” Capital Coun said. Ariel Troster.

“We don’t have a source of funding,” she said. “We have a huge hole in the budget.”

Part of the city’s plan to address the crisis includes using the federal Temporary Housing Assistance program, which has so far reimbursed the city $48.2 million for temporary housing for those seeking asylum.

The city has also leased or purchased three transitional housing properties with the goal of adding two more family-friendly properties and up to 20 single-family homes scattered throughout the city.

The key is two already controversial reception pointsfor which funding negotiations are ongoing. The plans would also allow the city to reopen community centers that have become temporary shelters during the pandemic.

Existing funding may be at risk

The city has received tens of millions of dollars in funding from the federal and provincial governments to address rising homelessness and the housing crisis since 2021 – none of which was committed when the plan was developed.

But the dollar amounts fluctuated greatly from year to year, which employees said made it difficult to plan for the future.

Add to this the need to achieve aggressive construction targets to maintain the federal Housing Acceleration Fund and the provincial Housing Acceleration Fund. That’s why the city said it needs to focus on building new homes.

“There is a significant supply gap in the City of Ottawa. We see this in the vacancy rate. We see that in rental rates,” said Debbie Stewart, general manager of strategic initiatives.

“There is significant funding that could be at risk from other levels of government if we do not meet aggressive targets when it comes to building permits and new affordable housing.”

Lauren Reeves, affordable housing manager, told CBC the city is on track to meet the annual federal goal of issuing building permits for 12,500 new homes.

Ontario’s targets require private developers to dig into the ground with shovels, which Reeves said is harder to predict.

The provincial tracker reported that as of August, Ottawa had reached 32.6 per cent of its new housing construction target, putting it at risk of being left without even partial funding unlocked at the 80 per cent mark.

Builders must build

Leiper told CBC the city can only do what it can and the rest is up to the industry.

“There are tens of thousands of potential apartments built on green fields, infill, right across the city, where private sector builders haven’t even put a shovel in the ground,” he said. “It’s time for the builders to build.”

Troster and Leiper also expressed concern about the position of Conservative leader Pierre Poilievre. recent announcement that if elected, he would cut the Housing Acceleration Fund.

When asked about this possibility, Stewart noted that the federal government could back out of the deal at any time.

“That’s the nature of government,” Mayor Mark Sutcliffe told CBC when asked if he felt similar frustration. “Even when we sign a long-term agreement for five years of funding, it must go through the budget every year. I think we’re always willing to adapt.”

The new long-term financial plan also relies on continued and increased funding from the city, including through a vacancy tax. A proposed change to increase taxes on apartments that remain empty for several years in a row could be approved by the council next week.

If approved, it could lead to millions of dollars more in revenue per year for affordable housing.