A city committee has voted to compromise over one controversial plank in a new housing plan, paring back a proposed fee holiday for developers.

Last month, Mayor Mark Sutcliffe unveiled a plan to speed up housing construction by reducing or deferring fees charged to developers, while streamlining the city’s approval process.

The 53 recommendations in the plan aim to make Ottawa the “most housing-friendly city in Canada.” They look to transform the culture at city hall, putting special emphasis on affordable housing and dense development near transit stations.

But planning and housing committee chair Coun. Jeff Leiper opposed one key part of the plan, a recommendation to waive community benefit charges for five years.

Developers say the charges, assessed at four per cent of land values, are a significant barrier to building more housing. 

Leiper said they are one of the few funding sources left to the city to pay for everything from recreation to traffic calming and affordable housing.

Councillors debate compromise motion

At a joint meeting of council’s finance and planning committees on Wednesday, Coun. Laine Johnson made a compromise motion to reduce — but not eliminate — community benefit charges.

Her motion would see the charges drop from four per cent to two per cent of land over five years, and to one per cent for projects near major transit stations. Projects approved after 2028 wouldn’t be eligible.

“I think my residents of College ward want to know, that when they are seeing increased density in their area, that that community benefit will be borne both by the development industry, as well as taxpayers,” Johnson said.

College Coun. Laine Johnson says she isn’t prepared to tell her residents the ward would no longer be receiving the community benefit charges. (Félix Desroches/CBC)

Jason Burggraaf, executive director of the Greater Ottawa Home Builders’ Association, took issue with Johnson’s motion.

He said the city won’t solve what he called a “structural housing deficit” by keeping units more expensive than they need to be.

“I’m at a loss as to why we would not give ourselves all the opportunities possible for higher density housing,” he said. “Why are we keeping up barriers to the multi-family housing that we say we want?”

‘Huge cash transfer’

But city councillors pressed Burggraaf and housing developers who came to committee on whether they would actually pass those cost savings on to home buyers.

“This is risky,” said Coun. Ariel Troster. “This is a huge cash transfer to the private development industry. And I’m certainly concerned about a lack of metrics or accountability….This is a lot of money. And it’s unclear if it’s going to work.”

Marcia Wallace, the city’s general manager of planning, development and building services, responded to those concerns, from the city’s perspective.

“What’s proposed is not about increasing the profits,” she said. “It’s about ensuring the projects go forward.”

Yet the housing plan aimed to do far more than waive community benefit charges, and the bulk of the recommendations attracted wide support at committee.

City staff said the plan will help move housing projects from approval to building permits and, ultimately, to construction. 

They presented data showing that municipal fees can make up more than 10 per cent of the cost of building a townhouse, and argued that deferring those fees could improve cash flow, making projects more financially viable.