City of Ottawa

[Proof Sheet]

Originally Posted by Williamoforange

But Capital Ward Coun. Shawn Menard — the only committee member to dissent at approving the spending — said the units would still be too expensive for most renters. The Dream LeBreton units will rent at between 81 per cent and 90 per cent of the market value set by Canada Mortgage and Housing Corporation, while the five Claridge properties will rent their affordable units at between 91 per cent and 100 per cent of market value.

“It’s worth noting that 91 to 100 per cent of average market rent still isn’t affordable these days,” Menard said. “For me, it’s not a worthwhile investment to make it profitable for for-profit corporations to provide a slightly lower rent for a limited term.

“We shouldn’t be worrying about how to make affordable housing a profitable investment. We should be worrying about finding real, long-term solutions that take profit out of the equation.”


In apparently a shocking discovery to Menard, Subsidized housing requires a subsidy.... and in not shocking news to anyone else, further evidence the guys economically illiterate, as if he wants to lower the rents then push for an increase in the subsidy.

Anyways, we need more housing built, the city is incredibly short of supply, this subsidy will get more of it built as mixed income, and any increase in supply regardless of the cost to rent/own is a good thing.

Is this Menard guy the same one who when first elected wanted to prohibit Planning Department staff from getting a job in the local consulting field or for a developer for a year or so after leaving the City. Just checking.

In Menardland the residents of the City would all live in deeply subsidized housing likely built by the efficient local government. Norilsk anybody?

Menard always believes that private sector/profit making housing is bad and public sector/non profit housing is good...yet as posted here in this thread costs are such that deep subsidies are required and where will that come from. The money tree is only so tall.

[YOWetal]

Originally Posted by rocketphish

$50M tax break for affordable apartments is 'deal of the century' for developers, councillor says
The incentive would be provided to builders that agree to set aside a percentage of the units in six projects to rent at below-market rates for a period of 20 years.

Blair Crawford, Ottawa Citizen
Published Dec 03, 2024 • Last updated 26 minutes ago • 2 minute read

Member of the City of Ottawa’s finance and corporate services committee approved $50 million in property tax breaks to real estate developers who include affordable units in their buildings, money one councillor likened to “the deal of the century” for private developers.

If approved by city council as a whole, the city’s Tax Increment Equivalent Grants will be doled out for six housing projects: 265 Rideau St.; 317 Lett St.; 1707 Carling Ave.; 661-665 Albert St.; 1040 Somerset St. W.; and 141 George St.

Five of the six projects are being built by Claridge Homes, which would receive about $35 million. The other, 661-665 Albert St., is a Dream LeBreton property.

The incentive is provided to builders that agree to set aside a percentage of the units to rent at below-market rates for a period of 20 years. It reimburses the developers for a portion of the increase in property taxes that come with the new buildings.

Kanata North Coun. Cathy Curry, however, questioned whether the city was receiving enough value out of its investment, especially since builders are also getting breaks on GST and HST costs from higher levels of government.

“The question we have to ask is, ‘Wouldn’t they build anyway?'” Curry said.

“It’s clear that (the developers) see this as a great offer. I think this is the deal of the century”

Together, the six projects will add 2,044 rental units to the city’s supply, of which 20 per cent, or 415, will be considered affordable.

But Capital Ward Coun. Shawn Menard — the only committee member to dissent at approving the spending — said the units would still be too expensive for most renters. The Dream LeBreton units will rent at between 81 per cent and 90 per cent of the market value set by Canada Mortgage and Housing Corporation, while the five Claridge properties will rent their affordable units at between 91 per cent and 100 per cent of market value.

“It’s worth noting that 91 to 100 per cent of average market rent still isn’t affordable these days,” Menard said. “For me, it’s not a worthwhile investment to make it profitable for for-profit corporations to provide a slightly lower rent for a limited term.

“We shouldn’t be worrying about how to make affordable housing a profitable investment. We should be worrying about finding real, long-term solutions that take profit out of the equation.”

The committee’s decision will go to city council for a final vote on Dec. 11.

https://ottawacitizen.com/news/local-new...le-apartments-deal-developers-councillor

So we are going to forego $120k in property taxes per unit that will rent for 91-100% of market rate? That is $500 a month subsidy for the "affordable" units. So unless the market rent is $5000 a month is on it's face a horrible deal. I mean the non affordable units are also adding to the rental stock but these are being built anyway. 141 George is already being excavated.

5 out of 6 being Claridge is borderline criminal.

[J.OT13]

Originally Posted by SL123

Interesting!!!! Isn't 141 George St the project we've never seen an official proposal/rendering for but seems to be part of the dig for Claridge's Andaz Phase 2 that is happening now.

Originally Posted by Ottawacurious

Thoughts on 5 of 6 being claridge?
I seem to remember others on the forum hinting claridge is a little tight with the city?

Yeah. Seems they threw in Dream just to throw off the scent. I've never heard of these subsidies before. Maybe bodes well for the Sens Arena since Claridge is part of the ownership.

Originally Posted by SL123

Interesting!!!! Isn't 141 George St the project we've never seen an official proposal/rendering for but seems to be part of the dig for Claridge's Andaz Phase 2 that is happening now.

The thing was proposed and approved a decade ago with the original Andaz. Image on the right. It's the rejected Hampton Inn that is somehow now part of the Claridge dig that I wonder about.

https://www.lowertown-basseville.ca/

Originally Posted by YOWetal

So we are going to forego $120k in property taxes per unit that will rent for 91-100% of market rate? That is $500 a month subsidy for the "affordable" units. So unless the market rent is $5000 a month is on it's face a horrible deal. I mean the non affordable units are also adding to the rental stock but these are being built anyway. 141 George is already being excavated.

5 out of 6 being Claridge is borderline criminal.

Yeah, the City's math seems off. It's a little sketchy. I'm not necessarily against tax breaks for affordable homes, but I would prefer fewer deeply affordable over a higher number of barely cheaper than Market rents.

[zzptichka]

Why are we giving subsidies to Clardige though? Isn't OCHC should be building affordable housing?

I'm not very well-versed in the development business, but can somebody tell me what's wrong with this non-profit concept (simplified):

- OCHC takes a loan in the bank (or elsewhere), hires a contractor, builds a building.
- Based on the monthly expenses (debt payments, maintenance, taxes) sets the rent to break even.
- In N years once the debt is paid, OCHC is getting the profit.
- They can take another loan to do a major refit if needed, and continue paying it off from the rent payments.

[phil235]

Originally Posted by zzptichka

Why are we giving subsidies to Clardige though? Isn't OCHC should be building affordable housing?

I'm not very well-versed in the development business, but can somebody tell me what's wrong with this non-profit concept (simplified):

- OCHC takes a loan in the bank (or elsewhere), hires a contractor, builds a building.
- Based on the monthly expenses (debt payments, maintenance, taxes) sets the rent to break even.
- In N years once the debt is paid, OCHC is getting the profit.
- They can take another loan to do a major refit if needed, and continue paying it off from the rent payments.

"Based on the monthly expenses (debt payments, maintenance, taxes) sets the rent to break even."

I think that this is the issue. Setting rates this way means that rents are not going to be affordable.

There have been a variety of affordable housing programs over the years, but many of the major ones included a low-interest or no-interest loan from government, plus an ongoing rent subsidy for income-tested tenants. Those programs are complex to run, but they have been a successful model that could easily be done again if governments were willing to devote the resources to it.

If they are looking for a lower touch model for the city, I have always thought that giving a non-profit entity surplus land for free and an ongoing break on property taxes would work, in exchange for a covenant to keep rents at an affordable level for a period of time. It still requires oversight, and there is limited capacity in the non-profit sector, but it reduces the time needed to negotiate agreements etc.

[zzptichka]

Originally Posted by phil235

"Based on the monthly expenses (debt payments, maintenance, taxes) sets the rent to break even."

I think that this is the issue. Setting rates this way means that rents are not going to be affordable.

Is that so? Rents nowadays are are largely driven by supply/demand, not by the construction costs.

[phil235]

Originally Posted by zzptichka

Is that so? Rents nowadays are are largely driven by supply/demand, not by the construction costs.

That's true - I'm just going by what has been required in the past to make non-profit projects viable. Construction costs are particularly high now, so I've got to think that the break-even rent numbers are worse, if anything. Maybe as interest rates come down, that will change.

However, if you are just looking at what are often quite variable construction costs to set rents, you don't get a lot of certainty that you will actually end up with affordable rents. You'd probably need government to assume some of the risk of overruns to make it all work.

[YOWetal]

Originally Posted by zzptichka

Is that so? Rents nowadays are are largely driven by supply/demand, not by the construction costs.

Well the supply if of course related to construction costs. It's not that subsidies don't lower rents they certainly do the question is just by how much and would the money be better spent elswhere.

[eltodesukane]

... Good Grief ... I Can't Stand It ...

[rocketphish]

NCC won't pay tax-like fees for LeBreton Flats, arguing it's a park
Federal court challenge on hold as city negotiates with the Crown corporation

Elyse Skura · CBC News
Posted: Jan 08, 2025 4:00 AM EST | Last Updated: 9 hours ago

Imagine a day at the park.

Are you picturing a picnic at the soon-to-be developed downtown LeBreton Flats property?

Perhaps you're throwing a Frisbee at a lot wedged between Corkstown Road and Highway 417 — not exactly the bucolic setting young families strive to find in the city.

That's a taste of how the City of Ottawa and its mayor has framed the National Capital Commission's (NCC) decision not to make tax-like payments for 187 of its properties, which staff say could cost the capital $30 to $45 million over the next decade.

"So they're actually stealing from us now," Coun. Tim Tierney said at a technical briefing last September.

He was particularly frustrated with the idea that land being prepared for a downtown arena could be considered parkland.

"When it comes to speeding up building homes and building arenas … they're not paying market rate on that land at all. What? What's the incentive for them to get building?"

The exemption battle is just part of a struggle to reclaim lost revenue from what's called payments in lieu of taxes, or PILTs.

The city aims to close a number of purported loopholes that, if left unfilled, could see a funding gap balloon up to $445 million by 2035.

<more>

https://www.cbc.ca/news/canada/ottawa/nc...eton-flats-arguing-it-s-a-park-1.7416827

[J.OT13]

That wedge he's talking about, I sure as hell would call it a park.

https://www.google.com/maps/place/Corkst..._ep=EgoyMDI1MDEwNy4wIKXMDSoASAFQAw%3D%3D

LeBreton is actively getting redeveloped, so Tierney asking what's their incitive to redevelop? How about loads of cash from selling or leasing the land? That will bring far more to the NCC than the meager savings from having the area as a "park".

City Councillors are so concerned about this perceived unfairness, costing a whole few dozen million, yet have no issue subsidizing OSEG at a rate of half a Billion, or giving (almost exclusively Claridge) $50 million in tax breaks for moderately cheaper housing.

Beef should be with the Province who short changed us Billions in transit funding, not the Feds short changing us a few million in Pilts (and basically ARE the Ottawa economy while offering thousands of acres in parks and recreation).

[LeadingEdgeBoomer]

Originally Posted by YOWetal

Well the supply if of course related to construction costs. It's not that subsidies don't lower rents they certainly do the question is just by how much and would the money be better spent elswhere.

I wonder how the coming Tariff Wars will affect construction costs and our housing supply?

[Williamoforange]

Originally Posted by J.OT13

That wedge he's talking about, I sure as hell would call it a park.

https://www.google.com/maps/place/Corkst..._ep=EgoyMDI1MDEwNy4wIKXMDSoASAFQAw%3D%3D

LeBreton is actively getting redeveloped, so Tierney asking what's their incitive to redevelop? How about loads of cash from selling or leasing the land? That will bring far more to the NCC than the meager savings from having the area as a "park".

City Councillors are so concerned about this perceived unfairness, costing a whole few dozen million, yet have no issue subsidizing OSEG at a rate of half a Billion, or giving (almost exclusively Claridge) $50 million in tax breaks for moderately cheaper housing.

Beef should be with the Province who short changed us Billions in transit funding, not the Feds short changing us a few million in Pilts (and basically ARE the Ottawa economy while offering thousands of acres in parks and recreation).

Well considering the NCC still hasn't signed the deal for LeBreton maybe Tierney is right, though really late to the party on this.

https://ottawacitizen.com/ottawa-senator...hem&utm_medium=social&utm_source=twitter

Secondly try not to give false information, the city is paying devs to build "affordable housing" as per there definition, considering you were complaining about for reducing the amount required to be built when they were funded by new residents, is seems a little hypocritical to complain when the city finds them instead.

[rocketphish]

City's court challenge of federal tax-like payments dismissed
Judge finds 'nothing unreasonable' in how lower payments were calculated

Elyse Skura · CBC News · Posted: Feb 20, 2025 4:33 PM EST | Last Updated: February 20

A federal court has dealt a blow to Mayor Mark Sutcliffe's Fairness for Ottawa campaign, dismissing the city's argument that it's getting shortchanged on payments for servicing tax-exempt government buildings.

The City of Ottawa applied to federal court to review the situation and side with it — restoring roughly $22 million in what are called payments in lieu of taxes or PILTs.

It said the federal government took advantage of a COVID-era provincial tax break meant to provide relief to struggling businesses.

But Justice Panagiotis Pamel found "nothing unreasonable."

Public Services and Procurement Canada (PSPC) argued it was compelled to pay the lower amount by federal statute. It said the payments must reflect what a private property owner would be charged — and the judge agreed.

"Ottawa seems to be trying to fit a square peg into a round hole on the coattails of statutory intent and purpose," Pamel wrote in his Wednesday Federal Court decision. "The starting point should be the text of the PILT Act itself."

<more>

https://www.cbc.ca/news/canada/ottawa/ottawa-city-court-challenge-tax-like-payments-1.7463687

[J.OT13]

Shocker. Same result in Chelsea. Hope people get fired for this waste of time.

[rocketphish]

City of Ottawa appealing court ruling over payments in lieu of taxes
The Federal Court ruled in February that the federal government made a "reasonable" decision to pay a lower rate for PILTs on properties in the national capital.

Staff Reporter, Ottawa Citizen
Published Mar 21, 2025 • Last updated 5 hours ago • 2 minute read

The City of Ottawa says it will appeal a Federal Court decision on how much money the federal government has to pay in lieu of property taxes for its various properties in the national capital.

In a memo Friday, chief financial officer Cyril Rogers said that, after consulting with lawyers, the city believed it had grounds to appeal.

“Given the financial and legal implications of the recent ruling, (the city) has taken steps to preserve its appeal rights to the Federal Court of Appeal and intends on filing an appeal by the appeal deadline of March 21,” Rogers wrote.

In February, the Federal Court sided with the federal government in its dispute with the City of Ottawa over the amount of payments in lieu of taxes (PILTs) the government should pay.

The City of Ottawa had taken Public Services and Procurement Canada (PSPC) and Canada Post to court, claiming they owed $22 million more for PILTs for 2021 and 2022 on tax-exempt buildings.

On Feb. 19, the federal court said the federal government made a “reasonable” decision to pay a discounted rate for PILTs, which are paid instead of property tax to cover the cost of municipal services because the municipality cannot demand property taxes from another level of government.

At the time, Mayor Mark Sutcliffe called the judge’s decision “disappointing” and reiterated the city’s belief that it was being short-changed.

“(The) ruling doesn’t change the clear evidence that the federal government and its agencies have been underpaying their taxes to the City of Ottawa for years,” Sutcliffe wrote.

“I will continue to fight for our fair share and ensure the burden that has been shifted to local taxpayers is addressed.”

The matter is a pillar of the mayor’s “Fairness for Ottawa” campaign, which is seeking $100 million from the federal government to augment PILTs over the past five years and a commitment for funding over the next 10 years.

Staff previously told councillors that the city was estimating a funding shortfall of between $252 million and $445 million over the next 10 years unless the federal government changed the formula for PILTs.

https://ottawacitizen.com/news/city-ottawa-appeal-ruling-payments-in-lieu-of-taxes

[Admiral Nelson]

As both a taxpayer and Ottawa resident it feels as though I'm getting hosed on both ends on this case. Based off the facts involved, I don't see how the city has a leg to stand on.

[YOWetal]

Originally Posted by Admiral Nelson

As both a taxpayer and Ottawa resident it feels as though I'm getting hosed on both ends on this case. Based off the facts involved, I don't see how the city has a leg to stand on.

Like the Indigenous cases the hope is political pressure gets the Feds to drop their case.

[J.OT13]

This is getting really dumb. Please stop wasting our time and money on this un-winnable case (on a lot of un-winnable cases). The Feds shower the City with money in other ways that greatly compensate for this alleged "fairness" issue. Go after the Province instead.

[J.OT13]

Baseline-Merivale Secondary Plan: https://engage.ottawa.ca/baseline-merivale-secondary-plan
Algonquin Station Secondary Plan Study: https://engage.ottawa.ca/algonquin-station-secondary-plan