How to avoid a sprawling metropolis

U.S. experts bring lessons learned in high-tech corridors to Ottawa; Industry boom to bring housing crisis

Ottawa will face a critical shortage of affordable housing as well as enormous transportation and planning problems as the city's high-tech boom gathers momentum.

That's the opinion of two top development officers from fast-growing technology centres -- one from the San Francisco-San Jose area and another from Raleigh, North Carolina -- who recently visited Ottawa.

They see a number of parallels between their growth problems and the challenges Ottawa will face as its development skyrockets.

And they strongly urge the municipal government to make housing and transportation priorities to avoid having Ottawa turn into another sprawling, expensive metropolis.

"Housing is at the root" of all the issues surrounding growth, said Sean Randolph, president of the Bay Area Economic Forum.

"The greatest pressure is at the lower end of the housing market," said Mr. Randolph, who visited Ottawa in April.

City, retail and service workers tend to suffer from high housing prices spurred by demand from industrial growth.

"These people aren't making dot-com incomes, but are expected to pay housing prices that are affected by the dot-com economy," Mr. Randolph said.

The development officer's visit came about at the behest of Canadian government officials, including former prime minister Kim Campbell, former governor general Ray Hnatyshyn and the law firm Gowling, Strathy and Henderson. Part of the visit was organized by the Ottawa Economic Development Corp.

The purpose of the trip was to build business connections between Ottawa and the Bay area, Mr. Randolph said. The visit was successful enough that a delegation of Bay area officials will travel to Ottawa in October in hopes of fostering greater business ties.

While this city's problems seem small compared with the Bay area's housing woes, Mr. Randolph said huge growth can cause large problems.

"Our traffic is horrendous," Mr. Randolph said of the Bay area. "Our housing costs are skyrocketing and we are extremely concerned about how we can tackle those issues on a regional basis.

"We haven't built near enough housing to match the rate of job growth. We have built one house for every two jobs created," he added.

"It is no wonder that housing is so expensive," he said of the San Francisco region. "It is a pretty straightforward supply-and-demand equation."

The average house price in the Bay area is about $600,000 and many commuters are driving between 1.5 and two hours to and from work because affordable housing is so far away, Mr. Randolph said.

The average house price there is the highest in the U.S.

Similar trends are beginning to occur in Ottawa.

In July, Canada Mortgage and Housing Corp. reported that resale housing purchases in Ottawa slowed because of a lack of supply.

In June, Royal LePage said a typical bungalow in high-tech Kanata rose about 30 per cent in value over the April-June period. At the same time, a similar home in Ottawa rose 18 per cent to $225,000.

Apartment availability is tight as well in the Bay area.

"It is very, very hard to find rental housing and when you can it is very, very expensive," Mr. Randolph said. "It is hard to find housing at any level."

That situation is beginning to develop in Ottawa. CMHC said in July that Ottawa's apartment vacancy rate was 0.7 per cent.

"I perceive some similarities in the Ottawa area to what has gone on in the Bay area," Mr. Randolph said.

To avoid some of the problems his community has faced with growth, Mr. Randolph suggests that Ottawa:

- Try to get housing near new centres of employment to reduce the length of commutes by workers.

- Plan for greater housing density to hold down prices.

- Plan for greater housing density near public transportation to get commuters off the roads.

- Not allow urban sprawl, which takes up farmland and open space and jams freeways with commuters.

- Build more housing. "You've got to build more. Pay attention to the incentives and disincentives" to increasing housing.

- Build houses at a rate that matches job creation.

- Try to build a pool of skilled tradesmen to insure that homes can be built quickly.

- Plan highways and mass transit in advance of growth to cut the disruption of established neighbourhoods.

- Encourage educational infrastructure. "It is important to the intellectual vigour of an area," Mr. Randolph said.

- Encourage younger technology workers to come here by making the community an interesting place in which to live. Mr. Randolph was impressed with the Byward Market area with its clubs and restaurants and believes attractions such as the Ottawa Senators encourage young people to settle here. "The cities in the future that are going to be the most successful at attracting and retaining workers are the ones who are going to sell not just your traditional infrastructure, but are also selling quality of life," he said.

- Modify the tax regime to encourage housing.

Mr. Randolph said there will be resistance to increasing housing density because residents will feel more houses will decrease their property values. As well, residents won't want the communities they know to change through building clusters of apartments.

Ken Atkins, the executive director of the Greater Raleigh Chamber of Commerce, visited Ottawa in July to investigate business connections between his high-tech hub and Ottawa.

"One of the issues is affordable housing -- high-tech workers are often well-paid so housing prices go up," Mr. Atkins said.

The result is that lower-paid service workers must move far from the city to find affordable housing, Mr. Atkins said. That, in turn, puts pressure on traffic volume and other infrastructure such as schools and community centres.

Mr. Atkins suggested that government officials find ways to make home ownership more affordable.

In particular, he suggested making interest on mortgages tax deductible as is the situation south of the border.

Another impact of high-tech growth, Mr. Atkins expects, is increasing strain on the mass-transit system.

In a government town, there are a great number of workers with regular hours, he said. Thus bus schedules are easy to organize around peak morning and evening rush hours.

However, high-tech employees work around the clock, so that creates transit demand outside normal business hours, Mr. Atkins said.

High-technology cities ignore quality of life at their peril because workers in the field are in extremely high demand, Mr. Atkins said.

"Technology workers can live anywhere and they want to live in the best place," Mr. Atkins said. "We have to look after our quality of life."

And that lifestyle will be under attack, according to Mr. Atkins, because Ottawa's economy is likely to continue booming.

"I didn't see anything in Ottawa that caused me to believe that the trend you're on now is going to stop anytime soon," Mr. Atkins said.