An Ottawa city councillor is hoping a deal with a local developer to trade affordable units for extra building height sets a new precedent and boosts the city's affordable housing stock.

Under the arrangement, approved by the city's planning committee Tuesday, developer Beament Green has agreed to include two affordable housing units in a luxury rental building proposed for 979 Wellington St. W. In exchange, the building will be allowed to rise to nine storeys instead of the six for which the property is zoned.

The inclusion of affordable housing doesn't have to threaten the viability of the project if they really want to get it done. - Coun Jeff Leiper

"I think that getting a couple of affordable units in here is an indication that if there is a will, there's a way," said Coun. Jeff Leiper.

The developer also kicked in $155,000 for fixes to the nearby Laroche Park field house, plus another $10,000 for cycling improvements on Armstrong Street, as well as improvements to the streetscape and public art.

Trades like this are fairly common, but the inclusion of the affordable housing units in the developer's plans makes this deal stand out.

Coun. Jeff Leiper said the city has to play 'hardball' and use whatever leverage it has in its community design plans to negotiate for more affordable housing. (Laura Osman/ CBC) "As far as we know it's the first time," Leiper said.

Community backs deal

Normally developers simply hand over cash to bolster the city's affordable housing fund. But actually having the developer build the units is a much more efficient way to boost the city's affordable housing stock, Leiper said.

We hope that this precedent will be repeated in other developments. - Linda Hoad, Hintonburg Community Association

Residents sometimes feel the community benefits bestowed upon a neighbourhood in exchange for building allowances amount to bribes.

But in this case the ​community decided to get behind the proposal.

"We hope that this precedent will be repeated in other developments," the Hintonburg Community Association's Linda Hoad told the committee.

The city faces an ongoing struggle trying to build and maintain enough affordable housing for the thousands of families on the wait list.

Leiper said he hopes this compromise reached Tuesday encourages other developers to follow suit.

"The inclusion of affordable housing doesn't have to threaten the viability of the project if they really want to get it done."

Rental rebate program

The planning committee is also pursuing a program that aims to widen access to market-rate rental housing across the city.

Every time a developer builds something, they have to pay fees to fund city roads, sewers, fire stations and other infrastructure. The program would allow the city to offer builders a rebate on those fees if they construct rental units instead.

The more affordable the units developers build, the bigger the rebates would be, according to Sayed Sayah, the program manager for the city's affordable housing branch.

The hope is that by offering an incentive to build rental units, the supply will increase and housing will become more affordable across the city.

Funding for the program would come from the provincial government, which is offering a total of $125 million over five years to 70 eligible municipalities.

"The benefit is that it's not a direct cost to the city," Sayah said. "We're not losing the development charges that we collect for services that we need to provide."

The planning committee agreed to apply for a cut of that funding, and will find out whether Ottawa can move forward with the plan by the end of March.