Gov’t Raises Housing Obstacles: BENN

The main goal for developers is to maximize profits.

That means that developers will only build what they can sell. Sell being the key term. Highrise rental towers only get sold to REITs after (near) full occupancy is achieved. Individual residential units get sold to consumers (some investors but the percentage is trivial), but only if the units meet the needs of the purchaser.

There is now a glut on the market of high-rise rental towers in Ottawa. Two towers under construction at the corner of Maitland Avenue the Baseline Road are in their second period of dormancy in the last couple of years. The city’s own public figures indicate that there is now a relative lull in the housing starts. This affects Ottawa’s finances because there are provincial dollars available only if housing starts meet specified targets.

Having said that, the city’s Official Plan is designed to restrict the number of housing starts for lower density units (ground level townhome and single-family homes). Why? Because there has been a disconnect between what the customers want (family-sized units) and what the planners are saying the customer base have to settle for.

Bottom line. Economics 101, first couple of weeks into the course: If you limit supply in the face of increasing demand (population growth), prices rise. Higher prices equal less affordable.

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Ask Developers What Housing In Demand: BENN

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Yet all we hear from each level of government is how they are doing everything they can to create affordable housing. Everything except the removing the most obvious of obstacles.

Ron Benn, a finance executive, has been a member of the Centrepointe Community Association for the better part of three decades.

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