Funding tied to housing starts likely out of reach for Ottawa

The City of Ottawa is not likely to meet the goal to secure a chunk of the province's multi-million dollar Building Faster Fund in 2024, as housing starts lag far behind the number set by Ontario.

The fund provides $400 million a year to be split between municipalities across the province to speed up construction on new homes, but cities who don't meet mandated targets will lose out. 

The latest data from the Canada Mortgage and Housing Corporation says builders in Ottawa have broken ground on just over 7,000 homes so far this year.  

That's 64 per cent of its provincially mandated goal, but it needs to get to at least 80 per cent to secure a share of the province's three-year $1.2-billion fund.  

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The money would have gone toward repaying the city for hiring and training new planners and legal experts in order to speed up approval timelines and meet newly legislated guidelines. 

"The province has promised, we'll make you whole," said River Coun. Riley Brockington at Tuesday's finance committee meeting. "I want to make sure that when we can identify what the actual [cost] is, we have a strategy in place to recoup those costs." 

The 2024 draft budget does not include money from the fund.

This will 'sort itself out,' says mayor

Ontario has taken heat for linking funding to new builds, which the Ontario Big City Mayors group argues should instead be tied to permits. 

Municipalities have said it's unfair to rely on decisions made outside of their control, given that developers can simply hold off on breaking ground based on market conditions. 

Housing minister Paul Calandra shot down those concerns last week, but said the 2024 allotment will be used up and municipalities still have a month to raise their statistics. 

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While the city's acting general manager of planning, Don Herweyer, does not expect to reach those targets he said staff are working on other ways to secure funding. 

"There was the provincial announcement of making municipalities whole. So, we have not given up on that approach," he said. "There are discussions going on at the provincial level with various organizations." 

Mayor Mark Sutcliffe likewise feels confident that the funding tap will eventually flow in the coming years. 

"I think the province understands the dynamics that municipalities are facing and they're setting some aggressive goals and targets because they want to see more homes built," he told CBC.  

"Everything will sort itself out. We'll work with the provincial government and with other municipalities to make sure that cities are not in a difficult financial position because of the targets that were set by the province." 

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While those negotiations continue, Sutcliffe is having parallel talks with the federal government with the hopes of securing $150 million through the Housing Accelerator Fund.