While the pace of multi-family housing starts is trending upward in Ottawa, the leader of the city’s main homebuilders’ industry group is hoping proposed new provincial legislation aimed at streamlining development charges will trigger a bigger wave of single-family home construction as well. Earlier this week, Ontario Housing Minister Rob Flack introduced a bill designed […]
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While the pace of multi-family housing starts is trending upward in Ottawa, the leader of the city’s main homebuilders’ industry group is hoping proposed new provincial legislation aimed at streamlining development charges will trigger a bigger wave of single-family home construction as well.
Earlier this week, Ontario Housing Minister Rob Flack introduced a bill designed to speed up new housing construction through a number of measures, including “simplifying, streamlining and reducing” development charges across the province.
A key element of the plan would see municipalities defer collection of development charges until new homes are occupied.
Jason Burggraaf, the executive director of the Greater Ottawa Home Builders’ Association, says the measure could significantly reduce up-front costs for homebuilders by cutting the amount of money they have to borrow to cover development fees for dwellings that haven’t yet been sold.
“It will help with cash flow on the development side for sure,” says Burggraaf.
Development charges for homes outside the greenbelt have risen 24 per cent since October 2023, the association says, and Burggraaf says the fees now add about $65,000 to the cost of a typical new single-family home in Ottawa’s suburbs.
The new provincial bill is “not going to mean immediate reductions in sticker prices, I don’t think, but what I do see it doing over the longer term is really moderating cost pressures (on developers) as we move forward,” he adds.
The province also says it will look at ways to speed up the municipal planning process in cities across Ontario in the hope that streamlined zoning and permit approvals will help get shovels in the ground faster.
Burggraaf welcomes the move, saying it will help level the playing field for builders in Ottawa that have to cut through more red tape than developers in smaller outlying communities such as Arnprior, Carleton Place and Kemptville, where the development approvals process is simpler and costs are lower.
“Hopefully, that will make building in Ottawa more attractive or at least equally as attractive as it is building outside the city,” he says.
Meanwhile, the province says it’s also chipping in an additional $400 million over the next four years to help municipalities build water and wastewater infrastructure around new housing developments.
While he applauds the extra cash for critical infrastructure, Burggraaf says he’s more excited about another measure the province is batting around: creating entities similar to Hydro Ottawa that would build sewers, water pipes and related infrastructure and amortize those costs over the life of a mortgage, rather than lumping those costs into development fees and forcing homebuyers to pay them up front.
The proposed new legislation comes as the rate of multi-family housing construction is picking up in the nation’s capital.
The seasonally adjusted annual pace of multi-unit housing starts in Ottawa rose 149 per cent in April to 15,492 units, compared with 6,216 units in March, the Canada Mortgage and Housing Corp. said Thursday.
By contrast, the rate of single-detached starts rose just 16 per cent to 1,911 in April, up from 1,650 in March.
Between January and the end of April, builders started work on 3,045 new multi-family units in Ottawa, a 141 per cent increase over the same period in 2024. Single-detached starts rose at a more modest rate of 42 per cent, rising to 455 from 321 a year ago.
Burggraaf says he’s not surprised developers are more eager to break ground on multiresidential projects, most of which are rental apartments, right now.
Many potential homebuyers are still “kind of sitting on the sidelines” because of worries about the economic fallout from the global trade war and what a new government on Parliament Hill will bring, he explains.
Meanwhile, developers have been on an apartment-building bonanza for the past few years as they scrambled to fulfil pent-up demand for rental housing. Burggraaf says that trend accelerated when the federal government eliminated the GST on the construction of new rental apartments in 2023.
“There’s still a big need for that (rental) housing supply here in Ottawa, and that’s kind of what you’re sinking your investments into because that still has a real market demand,” he says. “Freehold (construction) is lagging because of that lack of consumer confidence.”
Speaking just days after Prime Minister Mark Carney and his new cabinet were sworn in on Tuesday, Burggraaf says he’s also keeping a close eye on how the newly minted PM plans to tackle the nation’s housing crisis.
“If the feds do get into building affordable housing like they’re talking about, that could have an impact on our social housing waiting list,” he says. “They’ve got big ideas that they now need to figure out how they're going to execute, like taking GST off new homes for first-time homebuyers. The devil is kind of in the details for that.”
