Ottawa creating task force, eying technology to speed up approvals as new home construction falls 15 per cent

The City of Ottawa is looking at ways to cut red tape to streamline the housing approval process, as new statistics show home construction fell 15 per cent in Ottawa last year.

The Canada Mortgage and Housing Corporation (CMHC) says construction started on 7,894 new homes and condominiums in Ottawa in 2024, down from 9,245 homes in 2023.

Construction began on 1,515 new single-detached homes across Ottawa last year, down from 1,535 homes in 2023.

The statistics show construction starts for multi-unit buildings, condominiums and apartments, fell by nearly 1,300 starts last year. There were 6,379 new condos and apartments construction starts in Ottawa in 2024, down from 7,710 in 2023.

Ontario’s Ministry of Municipal Affairs and Housing set a target of construction beginning on 12,583 new dwellings for Ottawa in 2024 to be eligible for funding under the Building Faster Fund. Municipalities will be eligible for funding if they reach 80 per cent or more of their annual housing targets.

Mayor Mark Sutcliffe told Ottawa’s homebuilders Thursday morning the city wants to “build more homes and we want to build them faster.”

Speaking to the Greater Ottawa Homebuilders Association meeting, Sutcliffe said he wants the city to streamline the approval process, leverage technology such as Artificial Intelligence and “embrace bold ideas” to improve and shorten the process.

“At the City of Ottawa, we need to be laser focused on improving and shortening the approval process,” Sutcliffe said.

“We’re not in the business of building homes. We’re in the business of approving homes. We’ve done a lot to improve in that area already. And I am determined to do more.”

The City of Ottawa will launch a “specialized task force” to explore as many solutions as possible.

“We need to innovate and test new ideas,” Sutcliffe said. “First, we can look at ways to defer development charges to ease the financial burden and improve cash flow at the beginning of the project. We can explore whether we can introduce incentives for transit-oriented development.”

Sutcliffe says the city could also consider issuing long-term leases for land that’s owned by the city and pre-zoning city land to develop it faster.

“We’ll work with the federal government and not-for-profit housing providers on speeding up approvals for their surplus land that could be developed quickly. We’ll look at more opportunities for conversions of office buildings into residential. We can look at new models, such as lease-to-own, vendor-take-back mortgages, issuing bonds, and any other financial tools that would expedite development on city land.”

Sutcliffe says the city will look at technology like AI to see if it can speed up approval process and the city will introduce a new dashboard to track the number of permits approved and the time of approval.

Sutcliffe acknowledged there’s “lots of uncertainty” in the political climate, along with market conditions like “supply chain issues” and “challenges in hiring skilled workers.”

“I can’t commit to you that the economy will be strong in 2025. I can’t commit that interest rates will come down. I can’t commit that the next federal election will bring stability to Ottawa. But what I can say is that I will do everything in my power that if you sell a new home, we’ll get you the building permit as quickly as possible.”

Sutcliffe says while he knows “everyone would love to see development charges frozen or lowered,” it’s very challenging and requires support from the upper levels of government.

“I think we can work with other levels of government to get more investment in infrastructure, so we don’t have to rely as much on development charges,” the mayor said.

“If you have a chance to talk to your MPs and MPPs, especially during what is very likely to be an election year, please ask them to help us with infrastructure funding. We’d be prepared to work with them on development charges if we had more money coming in for infrastructure.”

The president of the Greater-Ottawa Homebuilders Association says it’s important that city staff work with homebuilders to streamline the approval process.

“Over the past year especially, there’s been a lot of recognizing kind of where the troubles are, and where development approval processes are getting stuck in the system and now we’re going to start tackling where that goes,” Jason Burggraaf said.

Across Canada, construction began on 245,120 units in 2024, up 2 per cent from 2023.

“This increase is primarily explained by historically high rental construction levels and overall increased starts in Alberta, Québec, and the Atlantic provinces,” CMHC said in a statement.

The report says Canada’s six largest cities saw a combined three-per-cent decrease in housing starts in 2024, compared to 2023. New home construction was down 15 per cent in Ottawa and Vancouver, and 20 per cent in Toronto.

The report shows new home construction was up 33 per cent in Gatineau in 2024, with construction beginning on 3,655 new homes and condominiums.

Housing starts were down 28 per cent in Kingston, with 1,015 new units under construction last year.

Burggraaf says there has been a “big pickup in sales” in Ottawa heading into the new year.

“So, 2025 is going to be infinitely better than 2024 was, in terms of housing activity. We’re going to see more homes constructed and that really gives us a good signal into 2025 that that activity is going to even pick up even more, with more consumer confidence.”