By Josh Lalonde
There is widespread dissatisfaction with the state of housing in Canada. An Ipsos poll released in June showed that 78% of Canadians believed that owning a home in Canada is only for the rich, and 62% of non-homeowners said they had given up on ever owning a home. Only 23% of Canadians said that the federal government was doing enough to address housing affordability.
In Ottawa, the housing affordability situation is no better than in the rest of the country. The Canadian Mortgage and Housing Corporation (CMHC)’s Rental Market Report published in January found that the number of rental units in Ottawa that were affordable (rent below 30% of income) for those whose incomes fell in the bottom 20% bracket was “statistically zero.”
Housing has become a priority political issue at both the federal and provincial levels. In September 2023, the federal government introduced a bill to remove GST from new rental housing developments as a means of incentivizing construction. In Ontario, the provincial government has implemented several controversial measures it says will address the issue, including the “More Homes Built Faster” Act of November 2022, which, among other changes, reduced the development charges that municipalities can collect from new developments, adding pressure to already stretched municipal budgets.
Some have begun looking for new ideas beyond simply cutting taxes and development charges. One idea that has been gaining interest in recent years, including from the Office of the Federal Housing Advocate, is the community land trust (CLT), a form of property ownership in which land is owned by a non-profit organization that keeps it off the speculative real estate market.
About seven units of affordable housing are being lost in Ottawa for every new unit built, as existing affordable housing units are converted into higher-end housing.
Founded in 2021, the Ottawa Community Land Trust (OCLT) acquired a small apartment building near Kirkwood and Carling in late 2023 and finalized a second acquisition in Vanier earlier this month. The Leveller spoke with representatives of the OCLT and of the Parkdale Neighbourhood Land Trust (PNLT) in Toronto, as well as with Ottawa city councillors working with the OCLT , to learn more about the CLT model and what it might mean for the future of housing in Ottawa.
What is a CLT?
A CLT is a non-profit organization that owns land, and sometimes the buildings on it, with the goal of maintaining the affordability of housing on that land. In standard homeownership, the cost of housing includes both the construction and maintenance of the structure (house or apartment building) on the one hand, and the price of the land on which it is located, on the other. This means that what residents pay for their housing is subject to the fluctuations of the real estate market. As the price of land goes up (as it almost always does over time), the potential property values and rents rise as well. Land prices are often inflated by speculation, or buying property for the sole purpose of capitalizing on future price gains. Long-term residents of a neighbourhood can be pushed out by rent or property tax increases, as well as by large redevelopment projects seeking to exploit higher land values.
In a CLT , however, the land is owned by a trust with a legal obligation to keep it off the real estate market, allowing housing costs on that land to better reflect the actual cost of constructing and maintaining the buildings on it. Some CLTs own only the land and rent it to social housing providers, housing co-ops, or individual homeowners who own and operate the buildings on that land. In other cases, the CLT owns both the land and the buildings while partnering with another organization for their operation and maintenance. Some CLTs are focused on acquiring undeveloped land and building new housing, while others acquire existing housing to preserve its affordability.
Forming the OCLT
The initial discussions on forming the OCLT arose in 2017 out of the situation facing several housing co-ops and non-profit housing providers located just south of Scott Street and Albert Street in Somerset Ward. These non-market housing providers, including the Alex Laidlaw Housing Co-operative and the Centretown Citizens Ottawa Corporation (CCOC), own housing located on CMHC land that they hold in long-term leases, some of which will be expiring in the near future. The organizations were concerned as to what their fate would be once the leases expired. Would the CMHC provide new leases on similar terms? Would the land be sold on the private market, and if so, what would that mean for the housing providers operating on that land? They proposed to set up a CLT and have the CMHC transfer the land to it, so that the land would stay off the private market and the affordability of the housing they provide could be maintained.
Although the CMHC didn’t agree to this arrangement, the organizations who had made the proposal continued their cooperation. In parallel with their discussions with the CMHC , they began to look into ways to act on the growing recognition that addressing housing unaffordability requires not just building new affordable housing, but also preserving existing affordable housing. It’s estimated that about seven units of affordable housing are being lost in Ottawa for every new unit built, as existing affordable housing units are converted into higher-end housing. This means that even a doubling or tripling of the rate of affordable housing construction would leave the city less affordable from one year to the next. The housing providers decided to form the OCLT as a mechanism to buy affordable housing as it comes on the market and keep it away from redevelopment.
After several years of research and preparation, the OCLT was incorporated as a non-profit in 2021. It’s now led by a board of directors largely drawn from the non-profit housing sector. It currently has one full-time employee, executive director Mike Bulthuis, who spoke with The Leveller, as well as a part-time operations manager.
Ottawa city councillor Laine Johnson (College Ward) was involved in the formation of the OCLT during her time as Director of Tenant and Community Engagement at the CCOC. In an interview with The Leveller, she emphasized the importance of preserving existing affordable housing, pointing out that there was currently much more interest in capital dollars for new builds than for existing housing.
Councillor Johnson sees initiatives like the OCLT as an opportunity to shift the way the city views funding for affordable housing from what she calls a “charity model”, where non-market housing providers are just beneficiaries of the city’s generosity, to a model where those organizations are seen as the city’s partners and as experts in the operation of non-market housing.
The charity model leaves non-market housing providers dependent on government funding for their ongoing operations. As a result, the viability of those housing providers is subject to the whims of politicians: funding granted by one government may be cut after the next election.
While the OCLT has received funding through various government programs to help it get off the ground and make its first acquisitions, its longer-term goal is to become increasingly self-sustaining. This progression towards autonomy would align with Councillor Johnson’s vision of affordable housing as a partnership between governments and housing providers. “If housing is a human right,” she explains, “then the less dependent housing providers are on government funding, the safer that right will be.”
The Parkdale model
In interviews with The Leveller, both Bulthuis and Councillor Johnson pointed to the PNLT in Toronto as an inspiration for the OCLT . Like the OCLT , the PNLT started small, with just one acquisition, but it now owns dozens of properties in Parkdale and other Toronto neighbourhoods.
Parkdale is a neighbourhood in western Toronto near the lakefront that was founded in the 19th century as a suburb marketed to businessmen who would commute downtown by train, although there was a significant working-class presence in the area even in those years. By the 1920s, many of the large older houses in the neighbourhood had been divided into apartments or served as rooming houses, leading city officials to describe it as a slum and propose its complete demolition. By the 1980s, newspapers were referring to it as an “urban village,” as more affluent residents had started returning to the neighbourhood in search of affordable rents and a colourful environment. With this “revitalization” came gentrification, as long-term residents found themselves unable to afford to stay in the now-desirable neighbourhood.
Unlike the OCLT , the PNLT consists of two distinct organizations: the PNLT proper, which is a community-oriented and resident-led organization based in Parkdale that sets the agenda for both organizations, and the Neighbourhood Land Trust (NLT), a charity that owns the assets and manages the technical and fiduciary responsibilities of a land trust. This dual structure was intended to facilitate growth, as communities outside of Parkdale could set up their own land trusts under the umbrella of the NLT. The Leveller spoke with Sam Carter-Shamai, chair of the NLT board, about the organization and how it might serve as a model for the OCLT.
The PNLT was formed about ten years ago and arose out of “a long tradition of self-organizing in the Parkdale neighbourhood,” according to Carter-Shamai. The PNLT’s first acquisition was a community garden, now known as “Milky Way Garden,” which Carter-Shamai described as “a place to plant seeds in, both literally and figuratively.” The garden is now home to a program for new immigrants to Canada, many of them from Tibet, who learn how to garden in the Canadian climate and share gardening techniques from their home countries.
Another early activity of the PNLT was conducting a study of rooming houses in the neighbourhood. Rooming houses were popular targets for developers, who would buy, renovate, and “flip” them, selling to new owners who would charge much higher rents. The PNLT presented this study to Toronto City Council, who agreed to fund a pilot project for the PNLT to buy a rooming house. This led to the 2019 acquisition of the Maynard Rooming House, a 15-unit building in Parkdale.
In 2021, the PNLT acquired another 36-unit building on Maynard, with funding from the Vancity Community Investment Bank. The following year, the City of Toronto and the Toronto Community Housing Corporation transferred 81 buildings, including single-family homes and small apartment buildings totalling 153 units, to the PNLT. These buildings are now known as the “Scatterhomes,” as they are scattered across western Toronto.
In 2022, the City of Toronto announced a Multi-Unit Residential Acquisition (MURA) program, with a budget of $20 million. This program would provide funding for non-profit housing providers, including CLTs, to acquire and renovate rooming houses or small apartment buildings of up to 60 units to preserve their affordability. Carter-Shamai presented this program as one of the biggest successes of the PNLT’s work.
When asked what lessons other CLTs could draw from the PNLT experience, Carter-Shamai advised them not to “shrug off the significance of research and community trust-building.” The word “trust” has a technical, legal sense in terms of land tenure in the name “community land trust,” he explained, but the everyday meaning of the word is also important to the success of a CLT.
The OCLT’s first acquisitions
The OCLT’s first acquisition, finalized in October 2023, was a six-unit apartment building at 887 Kirkwood Avenue. When the OCLT bought it, the building was fully occupied and had average rents of 63% of the average market rent (AMR) for similar units. The OCLT plans to gradually raise this to 80% of AMR as current residents move out, to ensure that the operation of the building will be financially viable.
The acquisition was made possible by a forgivable loan of $400,000 drawn from what is known as “Section 37” funds from Kitchissippi Ward. Until the coming into force of Bill 197 in September 2022, municipalities in Ontario had the power under Section 37 of the Planning Act to charge developers for permits to exceed the height or density limits provided for by zoning regulations. The funds raised through these charges in each ward were under the control of the ward’s councillor, subject to approval by city staff. Councillor Jeff Leiper (Kitchissippi Ward) told The Leveller that because of the high level of development in his ward, there were still Section 37 funds left over in 2023 from before Bill 197.
When the OCLT identified the Kirkwood property for acquisition and contacted city council looking for funding, Councillor Leiper offered to use remaining Section 37 funds for this purpose, and city staff agreed that the loan was a good use of municipal funds. The building lies outside of Kitchissippi Ward, just south of the boundary with Knoxdale-Merivale Ward.
The OCLT has been working with a community property manager, which handles the operation of the building, and has been using the experience gained from the first acquisition to refine its asset and risk management plans.
The OCLT also took possession of another building at 366 Brant Street in Vanier in October.
Building the OCLT for the future
While working over the last year on acquiring real estate, the OCLT also launched its “Housing Forever Bond” social finance initiative in May. Community members can buy bonds starting at a minimum of $1,000 with a 3.5% rate of return to allow the OCLT to pay off debt from its recent acquisitions and to raise money for future ones. The early success of this campaign helped finance the Brant acquisition, and the OCLT raised its funding goal from the initial $.17 million to $3 million.
Everyone that The Leveller spoke to in Ottawa was optimistic about the prospects of the OCLT.
When asked about his vision for the future of the OCLT , executive director Mike Bulthuis said that he pictured an organization with “a healthy portfolio of properties throughout the city of varying size,” focusing on six- to twelve-unit buildings. These units would have a range of rent levels to ensure financial viability, for instance through cross-subsidization, a model in which some units are rented at or near market rates to those who can afford them to subsidize the operation of other units below market rates to those who can’t.
Both the social finance campaign and the pursuit of a diverse portfolio of properties are aligned with the OCLT’s goal of establishing itself as a viable ongoing operation that would not be solely dependent on government funding.
Everyone that The Leveller spoke to in Ottawa was optimistic about the prospects of the OCLT . Councillor Leiper expressed his hope that, as the organization acquires property, it will become less and less dependent on public funding. Councillor Johnson mentioned how much more interest there was in the CLT model within city council compared to when she first raised the idea in 2019. With its first two acquisitions over the past year, the OCLT now has a foundation to begin building on.
