Despite efforts by city staff and council, the high demand for housing in Kelowna is likely to continue.
That was one of the conclusions in the 2021 Annual Housing Report (AHR) presented to council on Monday (Apr. 25).
“Staff will continue to work on existing initiatives and plan to bring forward new initiatives to help provide more housing options in our community,” said Arlene Janousek, city planner.
Population and economic growth, along with low-interest rates are contributing to the continued high demand.
“Kelowna remains a highly desirable place to live with a strong demand for housing, and this demand was reflected in home prices and rental rate increases in 2021,” added Janousek.
The report stated homeownership was increasingly out of reach last year, with record home sales and a large increase in median home prices. The median multiple, a measure of unaffordability comparing home prices to income, hit a 10-year high. Subsidized rentals took a hit in 2021 with only 88 new housing units occupied, down from approximately 150 in 2020.
“That could be due to impacts of the COVID-19 pandemic on the construction industry,” said Janousek. “The decrease may be temporary as there are approximately 440 units of subsidized rental housing in various stages of the development application process.”
It was also difficult in the market rental sector. Last year saw the lowest vacancy rate since 2017 at 0.6 percent, and rental rates were up 4.8 per cent overall, indicating there is more demand for rental units than currently available, Janousek said. The city did add 717 new market rental units last year, and another 3,300 are on the way. Rental rates have increased from an average of $976 in 2016 to $1,315 in 2021.
Councillor Luke Stack praised staff for incentivizing and encouraging the expansion of rental housing but did have concerns.
“Beyond numbers that I could ever imagine,” said Stack. “But at the same time, we’ve seen the price of rental housing grow so fast that it’s actually putting more and more citizens into a situation where they need some assistance on rental housing. It’s, unfortunately, eating away at our success.”
Regarding the need and support for emergency shelter housing, Janousek said work continues through the city’s Journey Home Strategy.
“However, anecdotal evidence tells us while a significant number of people have been housed in Kelowna, the number of people experiencing unsheltered homelessness appears to be increasing. While demand for supportive housing is difficult to quantify, there is an urgent need for people with complex and overlapping health conditions, as well as the city’s aging population.”
Looking forward Janousek added the housing mix coming online is more oriented toward multi-family development than has been seen historically in Kelowna.
“Approx 3,000 building permits were issued in 2021,” she said. “About 60 per cent of which were for apartment housing, which is generally more attainable than single dwelling housing. We can expect these units to come online in the next one to three years.”