Ottawa city council approves plan to create citywide affordable housing tax breaks for developers

Carpenters work on new home in a newly constructed subdivision in Ottawa on Wednesday, Oct. 20, 2021. (Sean Kilpatrick/THE CANADIAN PRESS)

Ottawa city council has voted to approve a plan that would give developers tax breaks for building affordable housing, no matter where in the city it goes.

It was part of a slate of changes to Ottawa's "community improvement plans" or CIPs, which have sometimes been controversial.

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Under the plan, the city could enter into an agreement with a developer to offer grants of between $6,000 and $8,000 per affordable rental unit per year for 20 years, so long as the developer agrees to include at least 20 per cent of the units being built (minimum of five units) as "affordable", as defined by the Canada Mortgage and Housing Corporation. The units must remain affordable for at least 20 years.

The grants would offset the loss of revenue from listing the units as "affordable."

City staff have been directed to draft a finalized affordable housing CIP and bylaw for council approval early next year.

Council also approved a recommendation to pause the community improvement plan at the Ottawa International Airport, but keep the targeted plans for Montreal Road and Orléans in place, with some changes that incentivize building more affordable housing.

Two recent high-profile controversies surrounding CIPs include the proposed but ultimately rejected tax grant for a hotel at the Ottawa International Airport under the Ottawa Airport CIP and a tax grant for a Porsche dealership at the corner of Montreal Road and St. Laurent Boulevard that was approved by the last term of council.

Staff say these CIPs are "stackable" and that developers are encouraged to apply to as many eligible CIPs as they can.

Councillors floated several changes to the recommendations. Coun. Shawn Menard tabled a motion to limit the city to $20 million worth of CIP grants per year, while Coun. Glen Gower moved a motion to adjust the eligibility for a brownfield redevelopment CIP. Both of these were defeated by council votes. A motion by Coun. Stéphanie Plante to adjust the recommendations for the brownfields CIP was approved, but councillors then voted to reject recommendations related to restructuring the brownfield redevelopment CIP.

City council suspended the brownfield redevelopment CIP last December.