This $152-million deal raises questions about Ottawa's affordable housing strategy | Opinion

On the face of it, the city-owned Ottawa Community Housing (OCH) acquisition of 503 aged rental units in Nepean looks like a bad idea. At a minimum, it raises questions about the city’s affordable housing strategy and who it is meant to help.

The benefits of the $159.2-million deal, the largest OCH has ever made, are not immediately obvious. The housing agency says it is “protecting these homes as part of Ottawa’s long-term affordable housing supply.”

Protecting them from what, exactly?

In response to my question about whether the properties were on the market or part of a redevelopment plan, OCH cited its mandate “to preserve and expand access to affordable housing over the long term,” and added “OCH cannot speculate on what might otherwise have happened with these properties.”

So, no immediate threat then. What about expanding access to affordable housing?

If anything, OCH ownership will reduce it. A city memo to councillors says 308 of the units are already at or below average market rent under their now-former owner Minto. Rather than freeze or reduce those rents to boost affordability, OCH will bring all units to average market rent over five years, as tenants move out.

How does that help people get affordable housing?

There are a couple of other financial factors that might have warranted scrutiny. The Nepean townhouses and small apartment buildings OCH bought were built in the 1970s and 1980s. What current or future repair liability do they represent?

OCH says they are in good shape for their age, but the city housing agency already has a repair backlog of about $100 million. Why add more?

Then there is the loss of property taxes. Under private owner Minto, taxes were paid on these units. Now they are not. The city staff memo doesn’t mention or quantify that cost.

Same with the cost of the overall deal. In touting its “historic” acquisition, OCH failed to include the purchase price, an omission repeated in the memo to councillors from senior city staff. OCH did provide the number on request, but the fact that it was initially excluded is telling.

In the world of government, cost and benefit have little connection. When the cause is deemed noble, they may have no importance at all.

The purchase does have one clear benefit. About 100 of the units will be used to help homeless families, eventually. Of course, the same result could have been obtained by buying 100 units, not 503.

In an interview, OCH chief development officer Cliff Youdale suggested the Nepean deal was too good to pass up. Most of them have two or three bedrooms, enough to accommodate a family. Building a unit like that new could cost $750,000, he says, but OCH got them for about $300,000 a unit. Youdale says they were well priced because big rental investors don’t like the age and the relatively low rents.

One of the unusual aspects of the deal is moving the rents on all the Nepean units to the average market rate. Because of provincial rent controls, the new rates will only come into effect when tenants move out, but still, the next people will have to pay more for some units.

This is certainly not rent-geared-to-income housing, which makes up 90 per cent of what OCH owns and operates. Instead, it is part of a new program with the meaningless moniker ARRIV. The goal is to help people who aren’t poor enough for rent assistance but still struggle to find affordable apartments.

Does it make sense? The overall apartment vacancy rate in Ottawa is about three per cent, but for lower-rent apartments it’s just one per cent. Shouldn’t that be where OCH focuses its attention?

At least people at City Hall are happy. The city generously donated $6 million of federal Housing Accelerator Fund money to assist with the Nepean purchase. While the deal added zero new housing units, it still helps the city meet its accelerator fund goal. Government magic at work.

Randall Denley is an Ottawa journalist and author. Contact him at randalldenley1@gmail.com

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