Housing challenges indeed — it’s a tough time to be a homebuyer. Home prices remain unusually high, interest rates have skyrocketed to levels not seen in over a decade and, when you add housing supply issues into the mix, it’s clear that buying a home right now is not for the faint of heart.
While many news stories have focused on the difficulties that the current economic situation poses for first-time homebuyers — and those difficulties are real — there’s another demographic that’s also being squeezed: retirees.
First-time homebuyers are dealing with housing prices that are out of reach and interest rates that just compound the pain. Retirees are trying to downsize but face the double whammy of a limited supply of smaller homes selling at above-average prices. In essence, first-time homebuyers and retirees are competing against each other, and that’s clearly not a recipe for success.
The current situation makes it clear that housing demand is multi-faceted and a lack of supply in any segment has multiple impacts on others.
But there are solutions to our housing challenges.
Steps taken
Both the federal government and the province have removed GST/PST from new rental construction. Federal housing minister Sean Fraser is rolling out a $4-billion Housing Accelerator Fund, which gets money to municipalities to process development applications more efficiently. The federal government also committed to building more affordable housing units and to repurposing federal lands for housing while simultaneously removing barriers to internal labour mobility and prioritizing construction workers for permanent residency.
And the federal government just announced its plan to cap the number of student permits over the next two years to about 360,000 undergraduate study permits per year. (It will be interesting to see if this measure has a significant impact on our housing challenges, or, like foreign buyer bans and restricting short-term rentals, does little to improve housing affordability and supply. Keep in mind that Ottawa had an extremely active housing market through the pandemic, with practically no immigration and no international students — no “external demands” — on housing.)
Locally, Ottawa City Council signed a housing pledge in 2023 that commits to the building of 151,000 new homes over the next 10 years.
These are all important steps, but we are in a dire housing crisis that’s only going to be addressed with an increased and consistent supply of new homes across the housing continuum, so there is an urgent need to carry through on these promises and get shovels in the ground. As an example, the tax relief for for-purpose rental kicks in only at a minimum of four units. So, the city needs to allow four units per lot in order for this measure to spur the construction of small rental infill, as was the intent.
Without addressing the practical impediments to new housing supply, the housing market will continue to remain unattainable for first-time homebuyers, while locking downsizing retirees in place.
Innovative thinking
The Greater Ottawa Home Builders’ Association believes the path forward involves innovative, out-of-the-box, solution-oriented thinking at all levels of government and within the private sector, and we’re committed to doing our part.
We want Ottawa residents to be able to move into secure, vibrant communities where they have access to all the amenities they need. While suburban development is an integral part of that process, there is also a once-in-a-lifetime opportunity to revitalize our downtown and urban core, which was so badly impacted by the effects of COVID-19.
We have the chance to reimagine our city, allowing us to evolve existing neighbourhoods into complete communities with more high-density, inclusive, multi-unit housing spaces in a city widely considered to be one of the safest — and more affordable — in Canada.
But right now, housing challenges mean everyone is frozen in place. A lack of rental housing prevents people from moving into a space of their own; a lack of entry-level housing prevents people from moving out of rental apartments into their first home; and a lack of homes appropriate for retirees prevents people from freeing up family-sized homes.
This is the problem we have to fix — we have to restore the housing continuum because increasing the supply of homes at all levels means more choice and affordability, now and in the future.
It’s clear we need all levels of government to work together — and with home builders — to stimulate new construction in this city in the face of tough economic conditions. Ottawa residents deserve a reasonable opportunity to live in a home of their own and, by working together, we can help turn that challenge into reality.
