$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.
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dream lebreton's project at 661-665 albert st. is one of six projects that would benefit from the city's tax increment equivalent grant, if it's approved by council.
dream lebreton
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.
jean levac
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postmedia
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.
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“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.
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