A new report from the Canada Mortgage and Housing Corporation says Ottawa is building homes at the highest rate seen in nearly 50 years — but experts say it may not make much of a dent in the massive demand.
The housing supply report, which was released Tuesday, says Ottawa's population is growing faster than the rate at which new homes are being built.
Ottawa has seen high population growth since around 2015, says Mike Moffatt, senior director of policy at the Smart Prosperity Institute, a University of Ottawa-based think tank.
"The takeaway from this is that we have a housing shortage, that the CMHC acknowledges this and that it's sort of up to policymakers to figure out how to address shortages," Moffatt says.
Planning systems not keeping up, expert says
There were over 10,000 housing starts in 2021. The majority of these were in the suburbs as well as urban areas just outside the Greenbelt.
Moffatt says more housing is good, but that planning systems needs to consider what kind of housing is needed and where.
"When the population starts growing, suddenly our systems — our planning, our zoning, our permitting — all have trouble catching up."
This includes cutting red tape to allow for densification downtown, he says. The majority of construction happening is outside Ottawa's downtown.
"Housing is typically built where it's allowed to be built, says Moffatt. "In our cities, it is quite difficult to build infill."
Ottawa adding 'missing middle' housing
The report also noted that Ottawa has a large amount of row housing being built compared to other cities — about a third of all development was row houses. Barrhaven, Gloucester, West Orleans and Stittsville were listed as areas where a significant number of row houses were started in 2021.
Steve Pomeroy, senior research fellow at the Centre for Urban Research and Education at Carleton University, says high amounts of this kind of housing is a good sign.
In many cities, Pomeroy says the majority of available homes are large, single detached houses or very small apartments.
"Ottawa is doing a much better job of actually creating that missing middle," Pomeroy said.
Affordability still an issue
The report says supply is "the biggest issue affecting housing affordability' in Canada — but Pomeroy says it's unlikely increasing housing supply will have any significant impact on the average Ottawa resident's ability to buy or rent a home. Contrary to popular belief, he says that increasing supply won't lower prices overall.
"Yes, we're increasing supply, but are we increasing it at the right price point?"
Pomeroy says new builds usually fetch higher prices than older properties — while older properties aren't decreasing in price.
"It's ultimately squeezing out the folks at the bottom end of the market," Pomeroy said. "Which is going to be a real, real policy challenge both for the city and the province and for the federal government."