Budget opens door to faster housing development in Ottawa, Canada Lands boss says

David Sali

April 24, 2024

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The head of a Crown corporation that buys and develops federal properties says he’s hoping to speed up projects such as converting empty government office buildings into apartments in a bid to boost Ottawa’s housing stock. Canada Lands Company president and CEO Stéphan Déry told a city-building summit organized by OBJ and the Ottawa Board of Trade this week his organization is working with developers on a number of projects that will eventually provide thousands of new housing units in the National Capital Region. “We want to contribute,” Déry said during a panel discussion Tuesday at Lansdowne Park’s Horticulture Building. “We’re all about building mixed-use communities.” He said the recent federal budget has given Canada Lands new tools to help speed the development process along. They include $5 million in new funding targeted for measures such as providing low-cost leases to builders, putting housing on underused federal properties, and working with other Crown corporations to redevelop surplus buildings. In addition, while the federal government previously sold properties to Canada Lands at market rates, it will now look to transfer land to the company for $1 whenever possible to help spur affordable housing projects. Déry said his organization is working with Public Services and Procurement Canada, which manages much of the federal government’s real estate portfolio in the National Capital Region, to “go faster” on projects such as redeveloping Tunney’s Pasture and Confederation Heights, a 464-acre federal campus south of downtown that includes properties such as the former CBC headquarters at 1500 Bronson Ave. and the Sir Leonard Tilley Building at 719 Heron Rd. The new measures outlined in the budget will allow Canada Lands to “kickstart the redevelopment” of those lands, Déry said, as well as accelerate construction in neighbourhoods such as Wateridge Village, a former air force base near the Canada Aviation and Space Museum where Ottawa Community Housing is already building 271 affordable units. Another 500 homes are now slated to be built on the site. Meanwhile, Déry said work is expected to start next year on a multi-tower project that will see about 600 units – 15 per cent of which will be designated for affordable housing – built at 299 Carling Ave. in partnership with the Algonquins of Ontario. The two organizations purchased the 3.2-acre site in 2017. Another significant redevelopment project proposed for CLC-owned land – a mixed-use community at the 12-building former Federal Study Centre site at 1495 Heron Rd. that would include nearly 800 housing units and 100,000 square feet of commercial space – is still winding its way through the City of Ottawa’s planning approval process. Déry said Canada Lands, which bought the property in 2020, hopes to get the green light to start pushing ahead with the plan later this spring.

Market headwinds

However, Déry acknowledged that market headwinds have thrown a wrench in some of the corporation’s other plans for local properties. For example, he told the crowd a deal to sell a 6.5-acre site on Booth Street to a developer fell through earlier this year. The property, which was once home to the Mines and Resources Branch of Natural Resources Canada, is a “complex site” that includes several buildings on the City of Ottawa’s designated heritage list, Déry explained. “The market is not the market that we knew before the pandemic,” he said. “When you go to market with that (type of site) and you approach a developer, they think twice.” Déry also touted other recent budget initiatives such as more than $100 million in new funding for the Canada Mortgage and Housing Corp. aimed at releasing more federal lands to affordable housing developers. He suggested such measures could make office-to-residential conversion projects more financially viable for private real estate firms. Noting that PSPC has a 10-year plan to reduce its office footprint by 50 per cent, Déry told the audience that redeveloping surplus federal properties in Ottawa into apartments is “not going to happen tomorrow.” He urged the crowd of nearly 300 real estate executives and other business leaders to be patient and work with the federal government to ensure that aging office towers in the downtown core don’t go to waste. “We have a 10-year window to rally and come together,” Déry said. “It doesn’t take only the federal government. It takes the business community, it takes the developers, it takes the building owners, it takes all of these people to come together in order to build the Ottawa of the future.”