December 2010

CMHC released its annual report on residential rental vacancies at the end of November.  The report confirms vacancy rates in Ottawa of 1.6% of our total residential rental housing stock, which is up just slightly from last year's vacancy rate of 1.5%. 

The City of Ottawa Official plan prohibits conversion of existing rental stock to condominium, except in certain limited circumstances.  One of the key requirements in permitting conversions is a vacancy rate above 3% for two consecutive years running.  This means that the window for most residential conversions is closed for at least another two years.

In the meantime, small conversions (5 units or less) and conversion of certain properties that do not constitute part of the permanent rental housing stock may be permitted, subject to compliance with other requirements in the Official Plan and the Condominium Act that govern conversions.

Builders and land owners who are considering the construction of rental apartment buildings may wish to consider registering those buildings as condominiums prior to occupancy of the building (so that they will not be limited by conversion policies should they later wish to divest themselves of the asset).  Having condominium title for a rental building may improve the overall marketability of the building and may offer additional options in terms of financing that are not available when the building is held in a single title.

For more information on conversion to condominium, please contact Debbie Bellinger in our real estate and development practice group at 613-231-8309 or debbie.bellinger@nelligan.ca.

Link to CMHC December 2010 report.