“The point we’re trying to make is that the rhetoric we hear about these high home prices and rents is that there is a lack of supply. And the solution is ‘supply, supply, supply.'”
Published Dec 08, 2023 • Last updated 1 day ago • 3 minute read
Steve Pomeroy is senior research fellow with Carleton University’s Centre for Urban Research and Education. Photo by Tony Caldwell /POSTMEDIA
For every new unit of affordable housing built in Ottawa, 31 are being lost due to rising rents, renovations or demolition, a recent study has found.
The study by Carleton University professor Steve Pomeroy, senior research fellow for the Centre for Urban Research and Education, looked at the change in the availability of apartments and rooms rented for less than $1,000 monthly between the census years of 2011 and 2021.
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The finding of Ottawa’s 31 affordable units lost for every new unit built ranked third among the cities studied, behind Kitchener-Waterloo (39-1) and Winnipeg (35-1). It shows just how much the loss of affordable housing is outpacing the new supply, Pomeroy said.
“The point we’re trying to make is that the rhetoric we hear about these high home prices and rents is that there is a lack of supply. And the solution is ‘supply, supply, supply,’” he said.
“What I’m trying to say is that we have a big hole in the bottom of the bucket. And, if we don’t try to plug that hole, then the money we invest in affordable housing is not going to make an impact. It’s being overrun by the loss.”
Previous studies have looked at the loss of units that rented for less than $750 monthly, Pomeroy said. That ratio has declined, not because the loss of them has slowed, but because rents have risen so quickly that there simply aren’t many places available for less than $750. So Pomeroy increased the threshold to look at units renting for under $1,000.
While some affordable rentals are being demolished, most of the loss is due to soaring rents, he said.
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“Some are being lost in physical terms. We had a lot of relatively affordable two- and three-storey walkups in the inner city area that are being knocked down, but the vast majority of units still exist, just exist at much higher rents,” he said. “It’s these older properties, those 1960-70s walkups that have a tenant in them for five or 10 years and the rents, because they’ve been controlled, have fallen below the market rate. When that tenant leaves, the rents go up.”
Ottawa Community Housing has shovels in the ground for phase two of its Mosaiq complex in Rochester Heights. Photo by Jean Levac /POSTMEDIA
In its 2023 annual rental market report, Canada Mortgage and Housing, a Crown corporation, found that the average rent for a two-bedroom apartment in Ottawa was 17 per cent higher for units that turned over to new tenants. An average two-bedroom apartment rented for $1,625 in 2022, up by 4.8 per cent from the year before that.
In 2018, the newly elected Ontario government of Conservative Doug Ford rolled back rent control as an incentive to encourage developers to build new rental units. The pandemic, supply-chain issues and a flood of new immigrants to Ottawa have pushed rents even higher.
Some of the lost units may also be due to the short-term rental market, such as Airbnb listings. Ottawa, like many cities, has enacted bylaws to restrict that practice, but there is no way of knowing if that is working or how the short-term rentals are affecting the rental market.
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“The challenge is enforcement,” Pomeroy said. “How does the city actually know that they’re using a rental unit in that way? We just don’t have sufficient data to surmise what’s really going on.”
Coun. Theresa Kavanagh, who is also chair of Ottawa Community Housing, says that organization’s plan for the 1,100-unit Gladstone Village development is “well on its way.” Photo by Jean Levac /POSTMEDIA
In its 2024 budget, passed this past week, Ottawa injected $30 million in one-time funding for affordable housing. Coun. Theresa Kavanagh referenced Pomeroy’s findings when she urged councillors to increase the money from the $24 million that had been set aside in the draft budget. She said she was shocked to see Ottawa’s 31-1 loss ratio.
“We’re doing our best to build more. I know that money will be well used,” said Kavanagh, who is also chair of Ottawa Community Housing. OCH has shovels in the ground for phase two of its Mosaiq complex in Rochester Heights, while its plan for the 1,100-unit Gladstone Village development in Little Italy is “well on its way,” she said.
But there is little the city can do to “plug the hole in the bucket” that Pomeroy references.
“We’d need help from the province on that because they regulate landlords and tenants,” Kavanagh said.
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