Ottawa Explores Inclusionary Zoning Amid Developer Skepticism

The City of Ottawa is revisiting a controversial housing policy that could mandate private developers to allocate a portion of new units as affordable housing, particularly near transit hubs. A recent discussion report from city staff examines the feasibility of an inclusionary zoning framework, which would require developers to sell or rent specific units at reduced prices to meet affordability standards. Despite the city’s intentions, many experts and developers express skepticism regarding the policy’s effectiveness in the current housing market.

The discussion paper highlights potential challenges, indicating that the implementation of inclusionary zoning might lead to increased rents for units not covered by the policy or discourage developers from building altogether. Consequently, the city suggests establishing a regulatory framework for inclusionary zoning, allowing the policy to be activated once market conditions improve. This approach aims to strengthen the city’s housing diversity, targeting moderate-income households rather than solely focusing on below-market housing.

Ottawa’s journey with inclusionary zoning began in 2019 as officials sought to enhance housing equity near transit stations. A framework introduced in 2022 aimed to require developers to dedicate 10 percent of their gross floor area to inclusionary zoning units, which would need to remain affordable for 25 years for rentals and 99 years for ownership. While industry representatives initially welcomed this cautious approach, the provincial government introduced more stringent rules in 2024, limiting the percentage of units to a maximum of 5 percent and capping affordability terms at 25 years.

Now, with a zoning bylaw amendment under consideration, the city’s recommendation focuses on refining the framework without a set timeline for enforcement. This strategy aims to ensure that the city is prepared to implement the policy when market conditions become favorable.

Some housing experts, like Carolyn Whitzman, an adjunct professor at the University of Toronto’s School of Cities, question whether inclusionary zoning can work effectively in any housing market. Whitzman points to Montreal’s experience, where a similar policy implemented in 2021 required developers to allocate 20 percent of their units for inclusionary zoning. She notes that virtually no developers adhered to the requirement, opting instead to pay fines, which transformed the policy into another form of development charge.

The challenges associated with inclusionary zoning are echoed by local developers. Jason Burggraaf, executive director of the Greater Ottawa Home Builders’ Association, emphasized that the high costs of construction and land make it difficult to offer affordable units without significant financial loss. He argues that if developers cannot recoup their investments, projects may become unviable, particularly in areas with premium land prices near transit.

In contrast, Kaite Burkholder Harris, executive director at the Alliance to End Homelessness Ottawa, initially supported the concept of inclusionary zoning. However, after observing the lack of affordable units produced under similar policies in Montreal, she now advocates for increased funding for non-market developers, like Ottawa Community Housing, to provide deeply affordable options for those on fixed incomes. “The right to housing is fundamentally a government responsibility,” she stated, underscoring the need for government intervention when market solutions fall short.

The city has considerable government land available for development, which some advocates argue could be better utilized to enhance the supply of affordable housing. Tenant rights group ACORN is also calling for an anti-displacement bylaw to stabilize the affordable housing market and prevent the replacement of lower-cost units with higher market rentals. Sara Laviolette, chair of ACORN’s Vanier chapter, emphasized the importance of keeping families in their communities.

“We don’t want to create a circumstance where no one can afford to live near transit,”

said Laine Johnson, College ward councillor. She acknowledged that inclusionary zoning could help moderate-income families but also expressed concern that it might conflict with the recommendations of the housing task force, which aims to create conditions favorable for private housing development.

As discussions about inclusionary zoning continue, it remains to be seen whether Ottawa can effectively balance the need for affordable housing with the realities of market dynamics and the concerns of developers. The planning and housing committee will consider the proposal on April 1, 2024, marking a significant step in the ongoing debate over housing affordability in the city.