Committee moves to encourage more new affordable rentals

The Planning and Housing Committee today approved delegating authority to staff to negotiate and enter into Affordable Rental Unit Agreements on behalf of the City. The Planning and Housing Committee today approved delegating authority to staff to negotiate and enter into affordable rental unit agreements on behalf of the City.   When new rental developments propose to offer units at affordable rents, the Province requires that municipalities provide the opportunity for applicants to enter into affordable rental unit agreements in exchange for exemptions from development charges, as well as for reduced community benefit charges or reduced parkland dedication requirements. The aim is to encourage the development of more new residential rental units at affordable rates. The Development Charges Act deems a residential unit affordable when rent is no greater than the lesser of average market rate or the income-based affordable rate. The income-based affordable rate is determined annually by the Province and is calculated as 30 per cent of household income for a household within the 60th percentile of gross annual incomes for rental households in each municipality.   An Affordable Rental Unit agreement with the City of Ottawa would require the landlord to maintain rents at Province-prescribed affordable rates for at least 25 years. Agreements with the City would require:

• Proof of actual rent charged, to ensure compliance throughout the 25-year term
• Rent increases maintain a rate that is no greater than the applicable affordable rate
• Consent before landlords could change which units in a building are offered at affordable rates

Should the landlord default on the agreement, the City would first seek to have the tenant repaid and have the landlord bring rents back into compliance. Failing that, payment would be owed to the City for the prorated amount of development charges, community benefit charges or parkland owing, with accumulated interest.   As part of this report, the Committee also approved creating a fee to ensure the City can recover any costs associated with preparing and negotiating these agreements.   The recommendations of this report pertain only to rental properties. The Development Charges Act also creates an exemption for units intended for sale at affordable rates. Recommendations regarding such agreements will be brought forward to a future meeting of the Committee. This report and its recommendations build on the substantial investments the City has made in affordable housing. With the support of federal and provincial governments, more than $200 million has been invested in supportive and affordable housing in Ottawa since 2022. Recommendations from today’s meeting will rise to Council on Wednesday, May 14.