John Herbert of the Greater Ottawa Homebuilders' Association. (Photo by Scott Adamson for the OBJ)

Smaller developers could be forced out unless more land becomes available

Ottawa homebuilders and city planners are still several thousand hectares apart on the size of the city's urban boundary expansion, with some smaller developers' futures hanging in the balance.

While municipal staff said the city needs to add roughly 500 hectares to the urban boundary by 2031, the executive officer of the Greater Ottawa Homebuilders' Association (GOHBA) said the number is actually closer to 8,000 or 9,000 hectares.

The conflicting conclusions stem from a difference of opinion on whether the bulk of Ottawa's baby boomers will continue living in single-detached houses, or follow their predecessors and move en masse into condominiums and apartments in their golden years.

Homebuilders maintain the generation's relatively large wealth and good health means they are more likely to continue to live in their houses, which will inevitably create a need for more houses as Ottawa's population grows.

"In the past, once people retired they no longer had the income available to them so, in many cases, it was necessary for them to move into an apartment," said GOHBA executive officer John Herbert.

"(But) this is a much wealthier generation than we have ever seen before. Right off the bat, that eliminates the need to move into an apartment for reasons of economic necessity."

Mr. Herbert added that with Canadians living longer and healthier lives, those living in houses who may have downsized in the past are now likely to hire help for more laborious domestic tasks so they can stay put.

City planners agree residents are living in single-detached homes longer than before, said Ian Cross, a program manager for research and forecasting in the city's planning branch.

But that trend has reversed itself as of late, Mr. Cross continued, adding that the rise in personal wealth has been accompanied by an increase in the cost of housing and gasoline.

The additional 500 hectares championed by city staff represents a 12-per-cent addition to the city's current supply of suburban residential land, and a 1.4-per-cent expansion of the overall urban boundary, said Mr. Cross.

He was present last Tuesday when the city's planning and environment committee received a set of preliminary proposals as part of Ottawa's official plan review.

It's also a "reasonable" addition when market demands are weighed against the objectives of the urban boundary – which include promoting intensification and discouraging low-density, car-dependent developments that are expensive to service – said Mr. Cross.

But Mr. Herbert countered that a too-small urban boundary will drive small- and medium-sized developers to bedroom communities such as Kemptville, Arnprior and Rockland, or out of business altogether.

"Previously, a lot of the big builders would sell serviced lots to the smaller guys. What is happening now is, because of the serious land shortage and the city's unwillingness to expand the urban boundary in the past, they've created this artificial shortage and so the bigger builders and developers are no longer willing to sell serviced lots to the small guys," said Mr. Herbert.

This has led some smaller builders to focus more on infill-type opportunities, many of which are becoming increasingly rare, said Akash Sinha, president of Dharma Developments.

"There is a lot of competition for those (infill opportunities) that ends up increasing the price of land within the existing boundary, which ends up having an effect on the affordability of the unit," says Mr. Sinha.

"It's tight right now, finding the right parcels."

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FACT BOX:

The urban boundary

• Currently about 35,000 hectares and is based on providing sufficient urban land for a citywide population of 1,192,000 in 2021

• Defined as the area already serviced, or that may be serviced, by major roads, transit and piped water and sewer services

• Estimated that approximately 90 per cent of Ottawa's population will live in the urban area

What happens next?

• Community consultations on preliminary proposals

• City staff will make specific recommendations on where to expand the urban boundary in October

• Draft official plan amendment to be tabled in November

• Council makes final decision in February 2009

Source: City of Ottawa