Officials, politicians have to wait to discuss solutions to Ontario's high house prices

Ottawa Mayor Jim Watson welcomes the idea of debating how to deal with record-high house prices, but says pointing the finger at municipalities won't build more housing. 

Premier Doug Ford and his municipal affairs and housing minister, Steve Clark, have said people need to be able to afford to own a home and they blame a lack of supply. The Ontario PCs have pointed to red tape and approval processes at the municipal level for slowing things down.

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The Ontario government was set to discuss its ideas at a housing summit set for this week, which will be postponed until Jan. 19, 2022 due to the need to focus on public health and the rapidly spreading Omicron variant.

Mayors such as Watson disagree with the province's view. He planned to attend the housing summit virtually with other big city mayors and regional chairs.

"We've really worked hard at the City of Ottawa to fast-track building permits. We don't drag our feet," Watson said in response to Ford and Clark's past comments.

Watson and others say housing is a complicated file, and can't just be solved by speeding up approvals and building things faster.

WATCH | Real estate board describes 'huge supply problem' as housing summit postponed

City officials processed a record number of permits in 2020, while the number of new units that started construction jumped by 20 per cent, which the mayor said is "hard to believe" given the ongoing pandemic.

Prices up, number of listings down

More than 9,000 new homes and apartments will have begun construction in Ottawa this year, according to the Canada Mortgage and Housing Corporation, but the Ottawa Real Estate Board says the monthly inventory of existing homes listed for sale is very low.

Supply is down, prices are way up, and many can't make a down payment for a first home priced at $700,000, said incoming board president Penny Torontow.

"The prices went up drastically over a two-year period. We don't see those kinds of jumps here in Ottawa," she said. Prices have levelled off somewhat in recent months, but the average sale price for a house in 2021 was $719,956, and $420,762 for a condo.

Torontow says increasing supply is the main solution to high home prices, but she says the province should look carefully at the variety of housing types that are in demand. First-time home buyers want everything every other generation wanted, she says, but Ottawa also has a large population of seniors.

She was surprised when a survey done by the real estate board found many people will need senior-friendly housing within five years.

"There's not enough places for them to go. Some of them are afraid to go now into a home because of what happened with the pandemic," said Torontow. "They want to stay in place, or they want to live with family."

Torontow says policies can make it easier to create in-law suites and coach houses, or to intensify existing lots with many smaller units so seniors can age in their neighbourhoods. Their larger homes could then be sold to younger home buyers.

Changing zoning rules to encourage more low-rise multi-unit buildings throughout neighbourhoods might well be in the cards. Some argue the approvals process needs less red tape. 

Mayor Watson says he's open to such discussion, but that changes can't lead to less public consultation in city planning.

Affordable housing or housing affordability

One housing policy researcher says the government has inappropriately narrowed the conversation about the affordability crisis. The focus on home ownership ignores the machinations of the rental market or the creation of affordable housing, says Steve Pomeroy. 

He also finds it too simplistic to say adding supply will alleviate house prices. Some have suggested investors buying up properties has driven up prices, for instance.

Pomeroy, a consultant who lectures at Carleton University and McMaster University, points to how house prices soared in Ottawa even while new construction hit record highs. Ottawa often sees cheaper units torn down for one or two new high-priced homes, he says, or rental housing built that's new and highly priced.

Pomeroy has low expectations for the January summit, and the push to address the costs of home ownership, citing the "silly season" that comes before a provincial election.

"Is this really a serious policy discussion about diagnosing the real causes of ... an affordability crisis, or is it posturing for the purpose of getting votes?" he said.

Mayor Watson, himself a former provincial housing minister under the Liberals, will give his provincial counterparts the benefit of the doubt that they're looking to debate a complicated file.

The municipal sector, however, is more interested in building affordable housing than making home ownership affordable, Watson says. The mayor wants reliable Ontario funding to build affordable housing projects.

The City of Ottawa is also drawing up a new policy to require developers to include affordable units in their projects, known as "inclusionary zoning." Right now, Ontario allows cities to create such policies only near transit stations, but Watson says the tool should be allowed more broadly.