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City council's version of 'inclusionary zoning' to boost housing builds not going to work: expert

According to Dean Tester of Make Housing Affordable, Ottawa's city council's decision not to use the policy tool as intended is actually going to hurt the city's housing market.
20210515_city of ottawa
City of Ottawa. (Photo/Dani-Elle Dubé)

It’s a “magic wand” approach that’s “just not going to work.”

Ottawa’s city council’s approach to building new housing builds is a “magic wand approaching that’s just not going to work.”

That’s what Dean Tester of Make Housing Affordable told The Sam Laprade Show on Wednesday, June 15 ahead of Thursday’s planning committee.

“Even though the market has cooled a little bit, interest rates have gone up and first-time home buyers are paying more than ever,” Tester explained. “It is incredibly difficult to get into this market and I think there’s an entire generation of people who are feeling priced out. And if we don’t take urgent action, people like me will never be able to afford a home.”

Other cities across Canada have adopted a policy tool known as “inclusionary zoning” to speed up the production of semi-affordable housing.

Typically when it comes to executing inclusionary zoning, Tester developers are required to sell a percentage of new housing units at a semi-affordable rate.

In quid-pro-quo exchange, the City gives developers offsets. For example, those can include building taller establishments, they receive quicker approvals and/or development charges are reduced.

“The theory is that under this model, everybody wins — we get semi-affordable units built, and developers are still able to make  a profit. So the projects are still buyable.”

However, Tester says Ottawa has taken a different approach to inclusionary zoning.

“But here’s the problem in Ottawa: they aren’t doing any of that,” Tester said. “The version of inclusionary zoning proposed in Ottawa right now is to force developers to include a percentage of affordable housing with no offsets.”

Instead, Tester thinks Ottawa is going to see less housing built, and the housing that is built is going to be less affordable and the city is going to have a system where first-time home buyers are competing for those inclusionary units that do get built in which “90 per cent of those people are going to lose” as a result.

“And the people who buy homes at full price are going to be subsidizing who win the inclusionary zoning lottery,” Tester predicts. “It’s taxing the middle class to help the middle class. It’s nonsensical, it’s bad policy and it does nothing to help folks looking for market-rate housing, and it also does nothing to help folks who need affordable social housing.”

As of now, the City’s target is to have 10 per cent of units be inclusionary per build.

And Ottawa is about 70,000 houses short already, compared to other G7 cities.

“We’re probably 10 years behind where we need to be and we’ve got an official plan that commits to not building enough houses to keep up with population demands,” he said. “So, we’re already behind and we’re getting further behind. Policies like inclusionary zoning can be helpful, but the version that’s being presented at city council, in my opinion, is actually going to make things worse.”

Listen to the full interview with Dean Tester on The Sam Laprade Show on Wednesday, June 15 below.

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