7. INVESTMENT IN AFFORDABLE HOUSING FOR ONTARIO (IAH)

PROGRAMME D’INVESTISSEMENT DANS LE LOGEMENT ABORDABLE DE

L’ONTARIO (PILAO)

Committee recommendationS as amended

That Council approve:

(1) That the City submit to the Minister of Municipal Affairs and Housing the Program Delivery and Fiscal Plan as outlined in this report, to support the following program components under the Investment in Affordable Housing for Ontario Program (IAH): (1) Rental Housing, (2) Homeownership and (3) Ontario Renovates;

(2) That upon receipt of approval of the Program Delivery and Fiscal Plan from the Minister of Municipal Affairs and Housing, that the City accept up to $25.8M in funding from the Minister of Municipal Affairs and Housing and direct Housing Services Staff to proceed with the following:

A. i. Action Ottawa Request for Proposals, (RFP’s) that meet the requirements of the IAH Service Manager Administration Agreement between the City and the Minister of Municipal Affairs and Housing, Action Ottawa Guidelines, and that are based on local housing priorities identified in this report to allocate IAH funding for Year 2, 3 and 4 of the IAH program;

ii. The Administrator of Housing Services submit to the Minister of Municipal Affairs and Housing the proposal of each affordable housing rental project selected by the Action Ottawa Selection Committee following the RFP process and request the Minister of Municipal Affairs and Housing’s approval of same, as required under the IAH Service Manager Administration Agreement in order that the City may allocate IAH funding to a selected affordable housing rental project;

iii. To secure the provision of affordable rental housing units with a 35 year affordability term, staff are directed to register on title to each IAH Rental Housing funded project for which the Minister of Municipal Affairs and Housing has issued a Conditional Letter of Commitment, a Contribution Agreement between the City and the housing provider/proponent named in the Conditional Letter of Commitment that satisfies the terms of the Conditional Letter of Commitment, the IAH Service Manager Administration Agreement, Section 107 of the Municipal Act, 2001 (for a not-for-profit housing provider/proponent), and the City’s Municipal Housing Facilities By-law 2006-1 (for a private sector housing provider/proponent);

iv. Include $4M in 2012 of the 100% City funding from the Housing and Homelessness Investment Plan No. 7 Envelope, “New Affordable housing Projects (Capital)” as part of the 2012 IAH Action Ottawa Request for Proposals;

v. Allocate $5M from the Housing First and Housing Reserve Fund to support the creation of new affordable housing through additional conditional grants in lieu of building permit and school board fees, non-exempt planning fees, accessibility grants and to provide a project contingency fund, subject to the said conditional grants being included in a Contribution Agreement between the City and each housing provider/proponent selected by the Action Ottawa Selection Committee following the RFP Process;

B. That staff proceed with Requests for Proposals, under the Homeownership Component of the Investment in Affordable Housing (IAH) in accordance with the terms of the IAH Service Manager Administration Agreement to select one or more housing developers to provide housing and administrative support for applicants who satisfy the eligibility requirements of the IAH Homeownership Component Guidelines;

C. That staff proceed with the development of the Ottawa Renovates Program component in accordance with the IAH guidelines to commence in Year 3 (2013) of the program;

D. That the Administrator of Housing allocate to a housing provider/proponent selected by the Action Ottawa Selection Committee following the RFP Process additional funding that may become available under the Investment in Affordable Housing for Ontario Program (IAH) due to any notional reallocation by the Minister of Municipal Affairs and Housing;

E. That in the event of any notional reduction resulting from unspent Year I IAH funding, that the Administrator of Housing Services be authorized to recommend to the Minister of Municipal Affairs and Housing capital projects that have been submitted or approved under a Council Approved RFP process for funding under the IAH program.

(3) That that the City recommend to the Ministry of Municipal Affairs and Housing that IAH programs allow for additional flexibility in the following areas:

(i) Provide the ability to re-allocate funding between capital and operating components within the term of the IAH program;

(ii) Allow Service managers the flexibility to set the maximum subsidy for rent supplements to attract market rental landlords;

(iii) Allow unspent operating funding to carry over into future fiscal years;

(iv) Provide for a phase out period after the 10 year subsidy ends for clients in receipt of rent supplements and housing allowances.

(1) That the Committee Chair support the need for additional flexibility in IAH programs as it pertains to housing allowances and rent supplements by sending a letter to the Ontario Ministry of Municipal Affairs and Housing and to the Federal Department of Human Resources and Skills Development, and the members of Provincial Parliament for Ottawa West Nepean and Ottawa-Vanier, to advocate for the stated changes.

RecommandationS MODIFIÉES DU Comité

Que le Conseil approuve :

(1) Que la Ville présente au ministre des Affaires municipales et du Logement le Plan financier et de mise en œuvre tel que décrit dans le présent rapport, pour appuyer les composantes du programme suivantes dans le cadre du Programme d’investissement dans le logement abordable de l’Ontario (PILAO) : (1) logements locatifs, (2) accès à la propriété, (3) Rénovations Ontario;

(2) Dès l’approbation du Plan financier et de mise en œuvre par le ministre des Affaires municipales et du Logement, que la Ville accepte le financement versé par ce dernier pouvant aller jusqu’à 25,8 millions de dollars et que le personnel des Services de logement procède comme suit :

a. i. les Demandes de proposition (DP) d’Action Ottawa qui répondent aux exigences de l’Entente d’administration de gestionnaire de services du PILAO conclue entre la Ville et le ministre des Affaires municipales et du Logement et les lignes directrices d’Action Ottawa, et qui sont fondées sur les priorités locales en matière de logement cernées dans le présent rapport dans le but d’attribuer le financement du PILAO pour les années 2, 3 et 4 du PILAO;

ii. l’administrateur des Services de logement présente au ministre des Affaires municipales et du Logement la proposition de chaque projet de logement locatif abordable choisi par le Comité de sélection d’Action Ottawa suivant le processus de Demande de propositions, puis demande que le ministre des Affaires municipales et du Logement approuve ces dernières tel que requis en vertu de l’Entente d’administration de gestionnaire de services du PILAO afin que la Ville puisse accorder le financement du PILAO à un projet de logement locatif abordable sélectionné;

iii. pour assurer l’apport d’unités de logements locatifs abordables avec une période d’abordabilité de 35 ans, le personnel doit inscrire sur le titre de chaque projet de financement de logement locatif du PILAO pour lequel le ministre des Affaires municipales et du Logement a émis une Lettre d’engagement conditionnelle, un accord de contribution conclu entre la Ville et le fournisseur/promoteur de logements nommé dans la Lettre d’engagement conditionnelle qui respecte les modalités de cette dernière, l’Entente d’administration de gestionnaire de services du PILAO, section 107 de la Loi sur les municipalités 2001 (pour un fournisseur/promoteur de logements sans but lucratif), et le règlement 2006-1 sur les logements municipaux de la Ville (pour un fournisseur/promoteur de logements du secteur privé);

iv. inclure 4 millions de dollars en 2012 de la totalité du financement de la Ville provenant de l’enveloppe 7 du Plan d’investissement dans le logement et les sans-abri, « Nouveaux projets de logements abordables (immobilisations) » dans le cadre des Demandes de proposition du PILAO d’Action Ottawa;

v. attribuer 5 millions de dollars tirés de Priorité au logement et du Fonds de réserve pour le logement pour appuyer la création de nouveaux logements abordables par l’entremise de subventions conditionnelles supplémentaires au lieu de frais de permis de construction et de frais exigés par le conseil scolaire, de frais de planification non exemptés, de subventions d’accessibilité et pour fournir un fonds de contingence du projet, assujetti aux dites subventions conditionnelles incluses dans une Entente de contribution entre la Ville et chaque fournisseur/promoteur de logement choisi par le Comité de sélection d’Action Ottawa à la suite du processus de la DP;

b. que le personnel procède avec les Demandes de proposition, en vertu de la composante d’accès à la propriété du PILAO conformément aux modalités de l’Entente d’administration de gestionnaire de services du PILAO pour sélectionner un ou plusieurs promoteurs de logements et dans le but de fournir un soutien administratif et des logements aux demandeurs qui répondent aux exigences d’admissibilité des lignes directrices de la composante d’accès à la propriété du PILAO;

c. que le personnel procède avec l’élaboration de la composante Rénovations Ottawa conformément aux lignes directrices du PILAO qui commencent à l’année 3 (2013) du programme;

d. que l’administrateur des Services de logement attribue à un fournisseur/promoteur de logement choisi par le Comité de sélection d’Action Ottawa à la suite du processus de DP, des fonds additionnels pouvant être libérés en vertu du PILAO en raison de toute réaffectation nominale par le ministre des Affaires municipales et du Logement;

e. que dans l’éventualité de toute réduction nominale découlant de fonds du PILAO non dépensés de l’année I, que l’administrateur des Services de logement soit autorisé à recommander au ministre des Affaires municipales et du Logement des projets d’immobilisation ayant été présentés ou approuvés selon un processus de Demande de propositions approuvé par le Conseil pour le financement en vertu du PILAO.

(3) Que la Ville recommandera au ministère des Affaires municipales et du Logement de permettre une plus grande flexibilité dans les domaines suivants :

i. donner la possibilité de réaffecter les fonds entre les composantes d’exploitation et d’immobilisations pendant la durée du PILAO;

ii. offrir aux gestionnaires de service la flexibilité d’établir la subvention maximale en ce qui a trait aux suppléments de loyer afin d’attirer les propriétaires de logements locatifs;

iii. permettre que les fonds d’exploitation non dépensés soient reportés aux années fiscales à venir;

iv. accorder une période de retrait une fois la subvention décennale terminée pour les clients qui reçoivent un supplément au loyer et des allocations de logement.

(4) Que le président du Comité appuiera la nécessité d’une plus grande flexibilité dans le PILAO en ce qui concerne les allocations de logement et les suppléments au loyer en envoyant une lettre au ministre des Affaires municipales et du Logement de l’Ontario et à la ministre fédérale des Ressources humaines et du Développement des compétences afin de prôner les changements énoncés.

Documentation

1. Deputy City Manager's report, City Operations, dated 10 January 2012 (ACS2012-COS-CSS-0001).

2. Extract of Draft Minutes, Planning Committee meeting of 10 January 2012, follows the French version of the report.

Report to/Rapport au:

Planning Committee

Comité de l’urbanisme

and Council / et au Conseil

January 10, 2012 / le 10 janvier 2012

Submitted by/Soumis par: Steve Kanellakos, Deputy City Manager/

Directeur municipal adjoint, City Operations/Opérations municipales

Contact Person/Personne-ressource:

Janice Burelle, Administrator, Housing Services /

Administratice, Services de logement (613) 580-2424 x44239, Janice.Burelle@ottawa.ca

City Wide/ à l'échelle de la Ville

Ref N°:ACS2012-COS-CSS-0001

SUBJECT:

INVESTMENT IN AFFORDABLE HOUSING FOR ONTARIO (IAH)

OBJET :

Programme d’investissement dans le logement abordable de l’Ontario (PILAo)

REPORT RECOMMENDATIONS

That the Planning Committee recommend Council approve:

1) That the City submit to the Minister of Municipal Affairs and Housing the Program Delivery and Fiscal Plan as outlined in this report, to support the following program components under the Investment in Affordable Housing for Ontario Program (IAH): (1) Rental Housing, (2) Homeownership and (3) Ontario Renovates;

2) That upon receipt of approval of the Program Delivery and Fiscal Plan from the Minister of Municipal Affairs and Housing, that the City accept up to $25.8M in funding from the Minister of Municipal Affairs and Housing and direct Housing Services Staff to proceed with the following:

A i. Action Ottawa Request for Proposals, (RFP’s) that meet the requirements of the IAH Service Manager Administration Agreement between the City and the Minister of Municipal Affairs and Housing, Action Ottawa Guidelines, and that are based on local housing priorities identified in this report to allocate IAH funding for Year 2, 3 and 4 of the IAH program;

ii. The Administrator of Housing Services submit to the Minister of Municipal Affairs and Housing the proposal of each affordable housing rental project selected by the Action Ottawa Selection Committee following the RFP process and request the Minister of Municipal Affairs and Housing’s approval of same, as required under the IAH Service Manager Administration Agreement in order that the City may allocate IAH funding to a selected affordable housing rental project;

iii. To secure the provision of affordable rental housing units with a 35 year affordability term, staff are directed to register on title to each IAH Rental Housing funded project for which the Minister of Municipal Affairs and Housing has issued a Conditional Letter of Commitment, a Contribution Agreement between the City and the housing provider/proponent named in the Conditional Letter of Commitment that satisfies the terms of the Conditional Letter of Commitment, the IAH Service Manager Administration Agreement, Section 107 of the Municipal Act, 2001 (for a not-for-profit housing provider/proponent), and the City’s Municipal Housing Facilities By-law 2006-1 (for a private sector housing provider/proponent);

iv. Include $4M in 2012 of the 100% City funding from the Housing and Homelessness Investment Plan No. 7 Envelope, “New Affordable housing Projects (Capital)” as part of the 2012 IAH Action Ottawa Request for Proposals;

v. Allocate $5M from the Housing First and Housing Reserve Fund to support the creation of new affordable housing through additional conditional grants in lieu of building permit and school board fees, non-exempt planning fees, accessibility grants and to provide a project contingency fund, subject to the said conditional grants being included in a Contribution Agreement between the City and each housing provider/proponent selected by the Action Ottawa Selection Committee following the RFP Process;

B. That staff proceed with Requests for Proposals, under the Homeownership Component of the Investment in Affordable Housing (IAH) in accordance with the terms of the IAH Service Manager Administration Agreement to select one or more housing developers to provide housing and administrative support for applicants who satisfy the eligibility requirements of the IAH Homeownership Component Guidelines;

C. That staff proceed with the development of the Ottawa Renovates Program component in accordance with the IAH guidelines to commence in Year 3 (2013) of the program;

RECOMMANDATIONS DU RAPPORT

Que le Comité de l’urbanisme recommande au Conseil d’approuver :

A i. les Demandes de proposition (DP) d’Action Ottawa qui répondent aux exigences de l’Entente d’administration de gestionnaire de services du PILAO conclue entre la Ville et le ministre des Affaires municipales et du Logement et les lignes directrices d’Action Ottawa, et qui sont fondées sur les priorités locales en matière de logement cernées dans le présent rapport dans le but d’attribuer le financement du PILAO pour les années 2, 3 et 4 du PILAO;

B. que le personnel procède avec les Demandes de proposition, en vertu de la composante d’accès à la propriété du PILAO conformément aux modalités de l’Entente d’administration de gestionnaire de services du PILAO pour sélectionner un ou plusieurs promoteurs de logements et dans le but de fournir un soutien administratif et des logements aux demandeurs qui répondent aux exigences d’admissibilité des lignes directrices de la composante d’accès à la propriété du PILAO;

C. que le personnel procède avec l’élaboration de la composante Rénovations Ottawa conformément aux lignes directrices du PILAO qui commencent à l’année 3 (2013) du programme;

D. que l’administrateur des Services de logement attribue à un fournisseur/promoteur de logement choisi par le Comité de sélection d’Action Ottawa à la suite du processus de DP, des fonds additionnels pouvant être libérés en vertu du PILAO en raison de toute réaffectation nominale par le ministre des Affaires municipales et du Logement;

E. que dans l’éventualité de toute réduction nominale découlant de fonds du PILAO non dépensés de l’année I, que l’administrateur des Services de logement soit autorisé à recommander au ministre des Affaires municipales et du Logement des projets d’immobilisation ayant été présentés ou approuvés selon un processus de Demande de propositions approuvé par le Conseil pour le financement en vertu du PILAO.

Executive Summary

The “Investment in Affordable Housing for Ontario Program” (IAH) provides federal and provincial funding for the creation of affordable housing in the Province of Ontario and will replace the previous “Canada-Ontario Affordable Housing Program” (AHP). The City has been allocated $25,881,845 over four years between 2011 and 2015.

Although there are two possible components for this funding, one being operating (rent supplements and housing allowances) and the other being capital, staff are recommending that the IAH funding be allocated to capital projects to respond to the highest demands in our community. Specifically, the Housing Services Branch is recommending that $21.3M of the $25.8M be allocated to either build or acquire new affordable rental and supportive housing, including accessible units. The remaining funds ($4.5M) will be provided to support:

(1) The new Ottawa Renovates Program ($2.4M), currently known as the Rental Rehabilitation Assistance Program (RRAP), administered by Canadian Mortgage and Housing Corporation (CMHC) until 2012;

(2) The Homeownership Down Payment Assistance Program ($1M); and

(3) Additional administration, staffing and legal costs associated with all components of the program ($1.1M).

The IAH is being provided at a time when the vacancy rate in Ottawa, at 1.6% is among the lowest in Canadian Cities and only 5% of all housing built between 2001 and 2010 has been rental accommodation. Of 18 large Canadian cities, Ottawa had the highest cost of living increase from 2009 to 2010, tied only with Toronto. Rents have also risen faster than the cost of living with 18.4% of Ottawa (Census Metropolitan Area) residents living in poverty. These hardships affect many low income households with 10% of renters (35,000 households) paying more than 50% of their income on rent, diverting significant portions of household income from other basic household necessities (Document 1). As a result, the City has experienced increased number of households waiting for subsidized housing and higher demands for emergency shelter services and supports (Document 2). Of the 10,000+ households on the centralized waiting list, 76% are either non-senior adults or families with children.

The length of stay in emergency shelters between 2007 and 2010 has increased by 24% for all clients, 7% for men, 23% for women and 56% for families with all areas of the sector in an overflow situation (Document 3). Of the singles depending on emergency shelter services, 2% of the total are long-stays, while 10% of individuals are episodic, however, these two groups occupy over 52% of the total bed usage. On most nights, there are 150-200 families staying in one of the two family shelters or in motels. To respond directly to these urgent demands in the City, staff are recommending that families with children and supportive housing, including accessible units, be the priority for Year 2 IAH capital projects.

Staff have recommended and received approval for a Year 1 “quick start” project of $1.47M to develop a new 11 unit fully accessible apartment building. With regards to Year 2 funding of $9.1M, a Request for Proposals (RFP) under Action Ottawa will be conducted in Q1 2012. The RFP will also include the $4M in capital from the Housing and Homelessness Investment Plan and up to $1.9M in fee relief and a contingency component from the $5M allocated to support the 4 years of the program.

To ensure that the property at 800 Montreal Road is developed within the required timeframe stated in the contribution agreement between the City and the Federal Government, this property will form part of the 2012 RFP as well.

Staff will develop a Homeownership Down Payment Assistance Program that will differ from the City’s previous Affordable Housing Program in that applicants for down payment assistance will choose their home from approved housing developer(s) that have been selected through an RFP process that will ensure affordability standards are met. An RFP will be conducted in 2012 to select one or more housing developers to provide affordable housing options and administrative support for the applicants who qualify for IAH down payment assistance.

The new Ottawa Renovates Program that will replace the Residential Renovation Assistance Program (RRAP), currently administered by Canadian Mortgage and Housing Corporation (CMHC) will be designed by staff according to the IAH guidelines and in consultation with key stakeholders including the private sector and the Planning and Growth Management Department. Staff will commence the Ontario Renovates component of the IAH in years 3 and 4 of the IAH program once CMHC’s responsibility for the program ceases.

Background

Action Ottawa and the Canada-Ontario Affordable Housing Programs

The “Investment in Affordable Housing (IAH) for Ontario program” provides $480.6 million in federal and provincial funding for the creation of affordable housing in the Province of Ontario over four years. The program replaces the previous “Canada-Ontario Affordable Housing Program” (AHP), which has been in effect since 2005 as well as provides funding to the Ontario Aboriginal Housing Program. Service Managers (SM) have been provided with a four-year notional funding allocation that is based on each area’s share of the province’s households and the number of households in core need. Year 1 (2011-12) is a transitional year with the full program being delivered in Years 2 to 4 (2012-15).

The City’s allocation is $25,881,845 and is broken down by fiscal year as per Table 1. IAH funding allocations are on a ‘use it or lose it’ basis, in that funds that are not committed by the required timelines will lapse as there is no possibility of re-profiling between fiscal years.

Table 1: City of Ottawa’s Total Allocation of $25,881,845 by Year

Year 1

2011-2012

Year 2

2012-13

Year 3

2013-14

Year 4

2014-15

Quick Start

$10,621,057

$10,640,070

$4,620,718

The previous AHP offered only Rental Housing and Homeownership options. This new IAH program differs in that it offers five options divided into two components; Capital and Operating. Service Managers may choose to deliver all options, one option or any combination of the five, see Table 2. However, once funding is allocated within a component, it can only be re-allocated within its component category and not between Operating and Capital.

Table 2: IAH Capital and Operating Components

Capital Component

Operating Component

Rental Housing

Homeownership

Ontario Renovates (Renamed Ottawa Renovates)

Rent Supplements

Housing Allowances

The following discussion provides the rationale and recommendations for allocating the funding under the capital components of the IAH based on the city’s priorities and demands.

DISCUSSION

The available inventory of affordable housing is typically divided between what is labelled, Social Housing and more recently what is called New Affordable Housing. Social Housing generally refers to the housing stock that was devolved from the Provincial and Federal Governments under the Social Housing Reform Act.

New Affordable Housing refers to subsidized housing built since devolution and administered by the City but not governed under the Social Housing Reform Act. In 2002, the City initiated the Action Ottawa Affordable Housing Program, leveraging various Federal and Provincial programs to build new affordable housing. Twenty-seven projects have been funded to date under the program resulting in the creation of over 1100 new affordable housing units. Generally, the new affordable housing developments provide mixed income communities with a range of building types, tenant profiles and levels of support. The table below illustrates and compares the type of social housing and new affordable housing that the City administers by dwelling type.

Table 3: Total Housing Inventory Administered by the Housing Services Branch (Dec. 2010
	Social Housing		Social Housing (Accessible)		New Affordable Housing		Affordable Housing (Accessible)
Unit Type	Total	%	Total	%	Total	%	Total	%
Beds (shared)	136	1%	n/a	n/a	n/a	n/a	n/a	n/a
Bachelor	808	4%	3	.04%	335	29%	6	1.8%
1 Bedroom	8302	45%	236	2.8%	354	30%	115	32.5%
2 Bedroom	4738	25%	272	5.7%	236	20%	12	5%
3 Bedroom	3760	20%	51	1.4%	180	15.5%	2	1.1%
4 Bedroom	721	4%	8	1.1%	41	3.5%	0	n/a
5 Bedroom	190	1%	0	0	18	1.5%	3	16.6%
Total Units	18,655	100%	570	3.0%	1164	100%	138	11.8%

Approximately 60% of units built since 2002 have been for single adults with the remaining 40% of units comprised of 2 or more bedrooms. Also, the previous Affordable Housing Program (2009-2011) was very prescriptive with 66% of the funding required to be for senior projects and another 20% for persons with disabilities. The majority of proponents were Non-Profit Housing Corporations, Cooperative Housing Providers and Charitable Organizations at 95% with the private sector representing 5% of new proponents. The new IAH funding is not as prescriptive as the previous AHP in that the City has the flexibility to fund priority projects that reflect the needs/gaps in our community.

Program Delivery and Fiscal Plan (PDFP)

The Program Delivery and Fiscal Plan (PDFP) below provides the staff’s allocation recommendation and spending plan by year, including fee relief, administration and contingency funding to support new affordable rental and supportive housing projects. Table 4 shows the proposed allocation of federal and provincial funds under the IAH program. Table 5 highlights the total potential capital contribution from the City and the IAH that would fund new affordable and/or supportive housing through new construction or acquisition and rehabilitation of existing buildings.


Table 4: Program Delivery and Fiscal Plan (PDFP) Summary
Program Component	Planned Commitment - $				TOTAL
	Year 1	Year 2	Year 3	Year 4
	Dec-11	2012 - 2013	2013 - 14	2014 - 15
Annual IAH Allocation as per MMAH	Quick Start to be deducted from Years 2 & 3	10,621,057	10,640,070	4,620,718	25,881,845
Adjusted IAH Allocation minus “quick start” for yr 1	1,470,000	9,651,057	10,140,070	4,620,718	25,881,845
Rental Housing	1,470,000	9,151,057	8,140,070	2,620,718	21,381,845
Homeownership	N/A	N/A	500,000	500,000	1,000,000
Ontario Renovates	N/A	N/A	1,200,000	1,200,000	2,400,000
SM Administration Fees up to 5% allowed	N/A	500,000	300,000	300,000	1,100,000
Subtotal IAH Allocation	1,470,000	9,651,057	10,140,070	4,620,718	25,881,845

Table 5: Total Capital Allocation for New Construction and/or Acquisition
Annual Allocation and Funding Source	Planned Commitment - $
	Year 1	Year 2	Year 3	Year 4
	Dec-11	2012 - 2013	2013 - 14	2014 - 15	TOTAL
Provincial / Federal Capital Funding (IAH)	1,470,000	9,151,057	8,140,070	2,620,718	21,381,845
City Capital (From the Housing And Homelessness Reinvestment Plan)	N/A	4,000,000	(TBD) 4,000,000	(TBD) 4,000,000	12,000,000
City Fee Relief and Contingency 15% (Housing Reserve and Housing First Funds)	220,500	1,972,658	1,821,010	993,108	5,007,276
TOTAL CAPITAL	1,725,000	15,123,716	13,961,080	7,613,826	38,389,121
· Total funding allocation of $42, 889,122 for years 1 to 4 · Total City contribution up to $17,007,276 · Total Federal/Provincial IAH contribution $25,881,845

Year 1: Quick Start Allocation

Year 1 is the quick start component comprised of $47.5M across Ontario and was available for construction ready projects where a commitment from the Service Manager was made and the contribution agreement executed with the housing proponent by December 31^st, 2011. If this $47.5M is not fully allocated across the Province, all Service Managers will have their notional allocations proportionally reduced for the period between 2012 and 2015. Also, any funds used from the quick start funding will be deducted from the overall Service Manager’s notional allocation. Given the short timelines, the Ministry of Municipal Affairs and Housing (MMAH) stated that business cases do not require Council approval with approval by the Chief Administration Officer (CAO) being sufficient. For Year 1, staff have recommended and received approval for an allocation of $1.47M to fund a Personal Choice Independent Living (PCIL) project. It is an 11 unit fully wheelchair accessible apartment building with supports that is construction ready (i.e. approved Site Plan Control Application) and that was submitted under a previous Council approved allocation process.

IAH Program Components

The following is a brief overview and rationale for selecting specific components of the IAH program:

New Affordable Rental and/or Supportive Housing - Invest $21.3M

Housing Services Branch is recommending the bulk of the funding, $21.3M be allocated to building and acquiring new affordable housing. The IAH funding alone will facilitate the development of over 200 new units in the city subject to construction costs and other market factors. Although the IAH allows grants up to $150,000 per unit or 75% of a project’s total capital cost (lesser of the two), staff expect IAH grants to range between $100,000 and 120,000 per unit before including development fee relief. In addition, up to $5M will be transferred from Housing First Surplus Property Sales and Housing Reserve Funds to support the IAH through additional grants in lieu of building permit and school board fees, non-exempt planning fees, grants for accessibility and to provide a project contingency fund, subject to the said grants being included in a Municipal Housing Project Facilities and Contribution Agreement between the City and proponent. Staff also recommend that the capital component ($4M) from the City’s Housing and Homelessness Investment Plan be included for 2012 and potentially future years (Table 5) subject to City priorities. If the $4M per year (2012 to 2014) in City capital is included in the IAH program it could result in over 100 additional units.

Year 2 (2012) allocation would consist of $9.1M from the IAH funding and the $4M in capital from the Housing and Homelessness Investment Plan, plus a 15% fee relief and contingency component, representing a total of $15M to be allocated toward the development of new affordable rental housing. Housing Services staff will proceed with a 2012 Action Ottawa Request for Proposals, under the Investment in Affordable Housing for Ontario (IAH) Guidelines, Action Ottawa, and local housing priorities identified in this report to allocate funding for either new construction and/or acquisition and rehabilitation or conversion of existing buildings. Given the City’s commitment to developing new affordable housing, staff will also increase the IAH’s minimum 20 year affordability requirement to no less than 35 years, which will be reflected in the terms of the contribution agreements executed between proponents and the City.

Poor housing conditions and high cost of housing leads to stress, which impacts individuals’ and families’ physical and mental health and leads to increased illness, resulting in increased use of health care system services and loss of human capital. Children, living in unaffordable housing situations resulting in frequent moves, have been found to under-perform in school with long-term consequences on their capacity to participate in the labour market. Many research studies have demonstrated the cost benefits of providing affordable and supported housing compared to emergency shelter services, which is often associated with higher usage of hospital emergency services and involvement with the justice system. Therefore, new units will create new affordable, accessible, sustainable, long term rental housing infrastructure with a focus on households and individuals with the longest wait times, and those requiring supports or accessible units.

The rationale for investing in the development of new affordable rental and supportive housing in Ottawa is supported by five key factors:

(1) Rental vacancy rates in Ottawa remain low, currently at 1.6% and continue to be among the lowest in Canada;

(2) Only 5% of all housing starts in the city between 2001 and 2010[1] were rental accommodations;

(3) An increasing number of rental market units in the City of Ottawa are becoming unaffordable to core need households and individuals, such as low wage earners, persons on pensions, or in receipt of social assistance. Of 18 large Canadian cities, Ottawa had the highest cost of living increase of 2.6% from 2009 to 2010, tied with Toronto. Rents have risen faster than the cost of living – 3.7%, between 2009 and 2010 for Ottawa-Gatineau. In 2007, 18.4% of Ottawa (Census Metropolitan Area) residents lived in poverty[2]. Ten percent of renters (35,000 households) pay more than 50% of their income on rent. (Document 1: Ottawa’s Context);

(4) There are increasing demands for subsidized housing based on the 10,000 plus households on the centralized waiting list (CWL). Emphasized by the 150-200 families residing in the shelter system on any given night and the number of singles depending on emergency shelter services. Two percent or 100 single individuals require long-stays, with 10% or 500 individuals being episodic clients, however these two groups who occupy over 52% of the total bed usage. (Document 2 & 3: Centralized Waiting List & Emergency Shelters); and

(5) Existing stock does not meet the design, accessibility, size (number of bedrooms) and supportive needs that are reflective of our community.

Community capacity and interest in developing affordable housing has been steadily increasing, with many agencies preparing viable and competitive affordable housing proposals for funding. Staff are aware of over $125M in unsolicited funding requests from both the private and non-profit sectors for new affordable housing projects. This helps to ensure that any funds committed to capital components of the program can be allocated with construction starting and concluding within the prescribed timelines. The proposals range in type (from families, supportive housing, and seniors), to the size of project (7 units to 100+ units), and proponent category (i.e., non-profit, charitable and private sector).

Priority must be given to the development of 800 Montreal Road recently purchased for $1 by the City under the Surplus Federal Real Property for Homelessness Initiative (SFRPHI) otherwise the City would be in a default position under the terms of the agreement with the Federal Government (http://ottawa.ca/calendar/ottawa/citycouncil/occ/2010/09-08/cpsc/01%20-%20ACS2010-COS-CSS-0015%20800%20Montreal%20Rd.htm). Depending on the nature of proposals received, staff expect the property at 800 Montreal Road to hold between 60 and 90 units. Other City Lands are also being held for affordable housing, such as lands in the City’s Longfields development and should be developed within the next three years to respect development timelines in the surrounding community.

NB It is important to note that IAH funding cannot be used for the development of secondary suites in owner occupied housing, nursing and retirement homes, repairs to social housing that receives ongoing federal subsidies, shelters and crisis care facilities and owner occupied housing. Congregate living buildings (rooms with shared living spaces) for supportive housing may be eligible for program funding provided a rationale is approved by the Ministry to receive funding.

Homeownership Component - Invest $1.0M / up to 100 households

The Official Plan has an affordable housing target for 25% of all new ownership units to be affordable to households up to the 40^th income percentile. Only 9.2% of ownership units built in 2010 were affordable to households up to the 40^th percentile. This is up from 4.1% in 2009, (primarily due to affordable condominium apartments), but still well below the City’s 25% target, making it increasingly difficult for low wage households to enter into the housing market to build financial equity.

The City, through previous AHP programs delivered from August 2008 to December 31, 2010, has provided households with down payment assistance. The average annual household income of recipients was $44,029.55; well below the 40th percentile income which was $61,182 in 2009. During this period, the Homeownership Down Payment Assistance Program received 417 applications and provided 133 households with down payment assistance. Over ninety (90) percent of the participants were families with children with an average down payment assistance loan of $15,138, and an average home price of $210,202. Townhouses dominated the type of structure purchased followed by condos with some single family dwellings. The total amount provided in down payment assistance loans was approximately $2M. To date, there have been no foreclosures under the program and 9 households have repaid their loans through the sale of their home or refinancing. These funds are recaptured in a Revolving Loan Fund, which currently has a total of $81,700.60 to reinvest in future homeownership programs.

Under these programs, down payment assistance is provided to low and moderate income households to reduce the purchase price to an affordable level. Building on previous programs, staff will engage the private sector and non-profit sector to build affordable homes for lower income households that will ease demand on subsidized housing, reduce the CWL and provide opportunity for households to build equity. It is important to note that if a household either refinances (i.e. increases the principal amount or changes any other the terms of the 1st Charge/Mortgage that was registered on title at time of purchase of the IAH unit) or sells their home within 20 years, funds that were provided are paid back to the City and can be re-invested into future home ownership programs, thus reducing the cost of the program over the long term. After 20 years, if the household maintains the terms of the agreement the loan is forgiven.

To provide more affordable housing options, staff will further develop the Homeownership Down Payment Assistance Program in 2012 in consultation with the private and non profit housing sectors and the Planning and Growth Management Department. Housing Services Branch will conduct an RFP in 2012 with the primary objectives of (1) engaging the housing sector in the development of different affordable housing options, (2) leveraging funding through the sharing of program administration costs and (3) providing lower home prices to qualified purchasers.

Ottawa Renovates – Invest $2.4M

The Ontario Renovates component (to be renamed Ottawa Renovates) will replace the Residential Rehabilitation Assistance Program (RRAP) currently administered by CMHC until March 2012. The City has the option to fund an Ottawa Renovates Program starting April 1, 2012. Ottawa Renovates may consist of two components; (1) HomeRepair and (2) Multi-unit rehabilitation, both of which can be further refined by the City (e.g. accessibility modifications or energy saving repairs or modifications). Grants can be provided for up to $50,000 per application. This funding cannot be used to repair social housing, affordable housing, or any housing that is in receipt of afederal or provincial subsidy. CMHC funding has varied between 2008 and 2011, ranging between $1.2M and $2.6M between each fiscal year. The loans were divided into the following RRAP categories: (1) Homeownership; (2) Rental; (3) Rooming House; (4) Disabled; (5) Conversion; (6) Home Adaptation for Seniors; (6) Emergency Repair Program and (7) Secondary Garden Suites. The majority of loans during this 3 year period were provided to Homeownership representing 172 loans, Disabled with 99 loans and Home Adaptation for Seniors with 24 loans. The total number of loans provided under this program was 317 which supported repairs or modifications to 468 dwellings, apartments and rooming house units.

There will be interest from stakeholders to maintain, especially given the increasing senior demographic. The program provides necessary renovations and assists families to remain in their homes and independent therefore reducing strain and costs to the existing housing system and other costly services. Based on the information provided above staff are recommending a $2.4M allocation to the Ottawa Renovates Program over a 2 year period with a potential to re-evaluate the program and funding levels after each year. Significant resources will be required to staff and monitor this program (80+ agreements / contracts required per year) based on past trends.. The program will require advertising, information sessions, application assistance and review, agreement preparation, registration of security and site inspections to verify that the work has been completed.

The Housing Services Branch will develop the new Ottawa Renovates program in 2012 in accordance with the IAH guidelines and in consultation with the Ministry of Municipal Affairs and Housing and other Ontario Service Managers who currently administer the CMHC RRAP program. The Housing Services Branch will launch the program in the first quarter of 2013 leading with advertisements and information sessions prior to accepting applications for funding.

Rent Supplements and Housing Allowances

These are new options in the IAH program and can be provided for a maximum of up to 10 years, after which time, the rent supplements/housing allowances would end. For example, a $1M allocation would be based on an annual budget of $100,000 for 10 years with funding expiring at the end of term. In addition, if it is not allocated by the end of each calendar year, the funds cannot be re-allocated to capital and would be clawed back from the City. Significant investments in Rent Supplements and Housing Allowances have been introduced as part of the City’s base funding in 2011 under the Housing and Homelessness Investment Plan. Housing Services has been actively engaging both private and non-profit landlords to increase the number of units and households receiving rent supplements.

Given that these components of the IAH are time limited, Ottawa’s low vacancy rate, and current take up/supply to allocate the new rent supplements and housing allowances under the Housing and Homelessness Initiative, staff are recommending that the City not pursue the rent supplement or housing allowance components of the IAH.

IAH Administration Fees

Upon executing the Administration Agreement in 2011, the City received $100,000 in administration funding, in addition to the $25.8M notional allocation to assist in the planning and development for the various program requirements of the IAH. The Housing Services Branch may request up to 5% in administration funding from each year’s notional allocation to support the cost of administering the IAH. Staff will adjust each year’s notional allocation to cover additional internal and external expenses such as those required for additional staffing, legal fees and disbursements, and other administrative activities associated with the three components of the IAH.

Conclusion

Staff will proceed with the Year 1 “quick start” project. An initial Request for Proposals (RFP) under Action Ottawa will be conducted in Q1, 2012, to allocate Year 2 of the IAH funding and the $4M from the Housing and Homelessness Investment Plan to develop projects that provide;

(1) new affordable, accessible housing for households with children; and

(2) supportive housing.

The property at 800 Montreal Road will form part of the 2012 RFP and the remainder of capital funding will be allocated to one or more projects selected by the Action Ottawa Selection Committee.

In 2012, staff will further develop its Homeownership Down Payment Assistance Program in consultation with the private and non profit housing sector and the Planning and Growth Management Department. Building on previous homeownership programs developed by the City and the provincial and federal governments under the AHP and now the IAH, Housing staff will seek to improve previous programs and improve affordable homeownership options for qualified home buyers. Following consultation with the sectors, staff will conduct an RFP in 2012 to select one or more housing developers (private sector or non-profit) to provide affordable housing options and administrative support for applicants who qualify for the down payment assistance component of the IAH program.

Staff will consult with the MMAH and develop guidelines to administer the new Ottawa Renovates Program that will replace RRAP in 2013, currently administered by CMHC. The new Ottawa Renovates Program is expected to launch during the first quarter of 2013.

For Years 3 and 4 of the IAH, staff will conduct an Action Ottawa RFP to allocate capital IAH funding for each year (2013-2014 and 2014-2015) and identify projects that respond to the priority needs in the community.

RURAL IMPLICATIONS

The funding provided under the IAH can be used to support projects in both the urban and rural areas, including villages, within the City boundary.

CONSULTATION

The proposed Program Delivery and Fiscal Plan (PDFP) contained in report reflects recommendations contained in the Council approved Housing and Homelessness Investment Report, the City Housing Strategy and Poverty Reduction Strategy report all of which were based on broad public consultation.

Staff will consult further with both internal and external stakeholders regarding the development of the Homeownership Component and Ontario (Ottawa) Renovates Component of the IAH in 2012.

LEGAL IMPLICATIONS

There are no legal impediments to the implementation of the report recommendations.

RISK MANAGEMENT IMPLICATIONS

Staff is administering this program in accordance with the (IAH) program and in accordance with the City’s own procurement policies. No particular risk management implications have been identified.

FINANCIAL IMPLICATIONS

The $25.8M for the IAH program and the $4M for Housing & Homelessness Investment Plan were approved as part of the 2012 budget.

The $5M required to support the IAH program would be funded from lands sales under the Housing First policy and the Housing reserve. Currently there is $1.4M of Housing First funds committed in the Housing Reserve, which will be used to fund a portion of the support costs. An additional $3.8M would be required from the Housing Reserve. The 2011 projected uncommitted ending balance of the Housing reserve is $7.736M.

ACCESSIBILITY IMPACTS

Staff expects projects approved pursuant to the IAH program will comply with the Accessibility for Ontarians with Disabilities Act (AODA).

A minimum of 5% of units built under the IAH program will be designed for occupancy by disabled persons and the individual dwelling units, where possible, are designed for easy access and comfortable use by persons with a wide range of physical disabilities.

CITY STRATEGIC PLAN

Strategic Priority: Healthy and Caring Community

Help all residents enjoy a high quality of life and contribute to community well-being through healthy, safe, secure, accessible and inclusive places

HC3 - Improve social and affordable housing

Provide affordable, attractive and accessible supportive and permanent housing for residents in need, and improve the range and quality of housing for people of diverse abilities and incomes to live in a community through various life stages.

SUPPORTING DOCUMENTATION

Document 1: Ottawa’s Context

Document 2: Centralized Waiting List

Document 3: Emergency Shelters

Document 4: 800 Montreal Road Property Sketch

DISPOSITION

Housing Services Branch will submit the Program Delivery and Fiscal Plan to the Ministry of Municipal Affairs and Housing.

Housing Services Branch will conduct a Request for Proposals allocating 2012 IAH capital funding to develop 800 Montreal Road, and other affordable and/or supportive housing projects as approved by the Action Ottawa Selection Committee as per the Program Delivery and Fiscal Plan described in the section above.

Each calendar year, Housing Services Branch will conduct a Request for Proposals allocating 2012, 2013 and 2014 IAH capital funding.

Staff will consult with the development industry and non-profit sectors to develop program components and priorities of a new Homeownership Down Payment Assistance Program to commence in 2013. An RFP will be issued in 2012 to select one more housing developers to partner with under this component of the IAH.

Staff will consult with the MMAH and develop guidelines to administer the new Ottawa Renovates Program under the IAH to start advertising the program and providing information sessions in Q1 2013 prior to accepting applications for funding.

Document 1

Ottawa’s Context

The demand for affordable and social housing in Ottawa currently exceeds the supply. Of the 350,000 plus households in Ottawa, approximately 60% own and 40% rent their housing. The 2009 rental vacancy rate in Ottawa is only 1.6% which is amongst the lowest rates in Canada; while rents have increased by 3.7%[3], compared to a 2.6% rise in the Consumer Price Index between 2009 and 2010 for Ottawa-Gatineau. Only 5% of all housing built between 2001 and 2010[4] has been rental accommodation.

In 2007, 18.4% of residents lived in poverty based on Statistics Canada Low Income Measures. Almost 7% of residents are in receipt of social assistance (OW/ODSP) with caseload increases forecasted into 2014. There are approximately 5,550 individuals in receipt of Employment Insurance. The number of seniors is expected to double over the next 20 years with 7% being below Statistics Canada’s Low-Income-Cut-Off. The minimum wage is currently $10.25/hr.; assuming a standard 35 hour work week the annual salary would be $18,655.00 gross. Over 40% of renters pay more than 30% of their income on rent, while 10% of renters pay more than 50% of their income on rent[5]; and these numbers are expected to grow.

Income versus Rental Accommodation Costs in Ottawa

	Basic Allowance $	Shelter Allowance Maximum $	Max Ontario Child Benefit	Total $	Average market rent 1 bedroom[6]	Average market rent 2 bedroom[7]
Ontario Works (OW)
Single	$227	$372	$0	$599	$877
Parent with two children 0-12 years	$347	$634	$184	$1,165		$1,049
Ontario Disability Support Program (ODSP)
Single	$590	$474	$0	$1,064	$877
Parent with two children 0-12 years	$751	$897	$184	$1,742		$1,049

Minimum Wage	40 hr wk			Per Month
$10.25 / hour	$410			$1,775.30 gross	$877	$1,049

Document 2

Centralized Waiting List

Seventy-five percent of the 10,000+ households currently on the Centralized Waiting List (CWL) are non-senior single adults and families with the remainder comprised of seniors and adult households of two or more persons. Non-senior single adults make up 37% of households on the wait list and have wait times of 4.9 years. Families, representing 40% of the list, have wait times of 4 years, however, those requiring 3 or more bedroom units have some of the longest wait times, typically 5 years and over see table 2. Seniors make up approximately 18% of the demand on the CWL and have access to approximately 20% of the social housing portfolio and 17% of the affordable housing portfolio, however as noted in the Ottawa context, the number of seniors is expected double over the next 20 years. The Social Housing Registry also maintains a Supportive Housing Waiting List, which contains a total of 1083 active files, most of whom are single adults.

Table 1: Centralized Waiting List Demand and Wait Times

Household Composition	2011 October Total Households	%	Median No. of Years Wait Time
Household Composition	2011 October Total Households	%	2009	2010	2011*
Single Adults	3790	37%	4.4	4.3	4.9
2 Adults	490	4%	4.1	5.2	4.3
3+ Adults	128	1%	6.8	4.5	5.4
Families (with Children)	3986	39%	4.7	4.5	4.0
Seniors	1856	18%	2.9	3.1	3.4

Table 2 below shows the distribution of families on the waiting list by size and wait time. Almost half the families are comprised of 2 to 3 persons (including at least one child) with the remainder comprised of 4 or more persons per household. In terms of wait times, the larger the household the greater the wait time, which can be more than 6 years for some large families.

Table 2: 2011 CWL by Family Size (Households with Children)

Number of Household Members	Number of Households	Median No. of Years
Number of Household Members	Number of Households	2009	2010	2011
2	905	2.8	3.1	3.0
3	1106	4.5	4.5	3.5
4	850	6.1	6.0	4.2
5	572	7.2	5.4	5.8
6	328	8.4	5.6	5.1
7+	222	6.8	5.8	6.8

Demand for accessible units (i.e. 170 households) is a smaller subset included in the above categories and has been found to be directly impacted by the lack of available accessible housing stock. Most units built under previous programs focussed on single persons with disabilities and the development of bachelor, 1 or 2 bedroom accessible units. However for years 2009, 2010, and 2011, only two households with children per year requiring 3 to 5 bedroom accessible units were housed in appropriate units suitable to the needs of the disabled family member. Although the percentage of persons waiting on the CWL for an accessible units is low, their wait times can be the longest, since stock is either limited or does not exist in some cases, especially for larger families requiring a wheelchair accessible unit for a child or parent. Approximately 40 households with children requiring 3 to 5 bedroom modified units are currently on the CWL with some households now waiting between 6 to 15 years and possibly longer due to the absence of suitable units in the portfolio. The addition of a limited number of 3, 4 and 5 bedroom accessible units within future affordable housing developments, where feasible, will provide much needed housing to those families with children requiring access to accessible homes.

Document 3

Emergency Shelters

The City has experienced increases in the number of people requiring access to emergency shelters between 2007 and the present. The most notable increase is in the single woman, youth and family sectors. The length of stay for all clients has increased by approximately 24% between 2007 and 2010, which indicates longer waits for, and a lack of affordable and/or supportive housing.

Emergency Shelter / Average Nightly Occupancy By Sector
Year	2007	2008	2009	2010	2011 (As of September 30th 2011)
Men	535	546	551	543	531
Women	117	122	137	144	165
Youth	29	39	42	43	39
Families	78	106	132	152	187

Adult Men and Women, Youth Sector

The male sector has been fairly consistent between 2007 and 2010 with no substantial change in the average nightly occupancy. However, the average length of stay has increased during this time period, with 55 nights on average in 2007, up to 59 for 2010, representing a 7% increase.

As noted in the table above, the women’s sector has seen significant increases in nightly occupancy from 2007 to 2010. The average length of stay for women in 2007 was 40 days, which increased to 49 days in 2010 representing a 23% increase.

The youth sector has been somewhat consistent since 2008, however the length of stay increased by 19% from 2007 to 2010.

In the single sectors, the “long stay” (2% or 100 individuals) and “episodic” (10% or 500 individuals) shelter users, presenting multiple and complex issues account for over 50% of the bed usage and would require medium to long term supports to remain housed.

Families

The Family Shelters also remain in overflow with 150 to 200 families residing in a shelter on any given night. The increase in homeless families between 2007 and 2010 is 79%, while their average nightly occupancy increased by 140%. The average length of stays for families has also increased by 56%, from 46 nights in 2007 to 72 in 2010. In addition to the demand for affordable housing suitable for families, especially for larger families needing 3, 4 and 5 bedroom units, access to land and funding suitable to facilitate the development of larger units remain a challenge.

Document 4

800 Montreal Rd Sketch

[3] CMHC, Rental Market Report, Ottawa, Fall 2010

[6] CMHC 2010 data average of all areas in Ottawa