A handful of Kelowna property owners who bought at artificially reduced amounts, made possible by affordable housing agreements between the city and the properties developers, will no longer be limited in how much they can sell their units for.
On Monday, at the urging of city staff, Kelowna council rescinded 10 affordable ownership housing agreements, effectively letting the owners of the 38 units in question sell them for full market value. Under the agreements, the sale price had been limited because the original cost was kept low to encourage affordable housing in the city.
The agreements date back to 2005.
“Since then, the market has shifted and it is now no longer difficult to find a re-sale stratified dwelling at or below the city’s starter home price of $209,902,” city planner Loren Sanbrooks told council.
“In the past two years, staff have received three requests from property owners to amend their ownership housing agreement to allow rentals.”
She added that, in essence, while the affordable ownership units served their purpose a few years ago when the average cost for a stratified dwelling was far above the city’s starter home price, the housing market has changed. And now it easier to find a stratified property at or below the city’s starter home price.
In 2012, Kelowna council decided that no new ownership housing agreements would be allowed. However, it said existing ownership housing agreements would continue to be administered.
Sanbrooks said it takes staff time and city money to administer the agreements, so by rescinding them, the city will save money and staff time.
Coun. Luke Stack lamented the passing of the agreements, saying they were an effort to get more affordable housing options in the city.
“I guess , in the end, it was a move that just didn’t work out,” he said.
In addition to the drop in property prices here, the city staff report also said three other issues influenced the decision to recommend an end to the agreements.
• The federal and provincial government agencies, including B.C. Housing and Canada Mortgage and Housing have presented considerable resistance to ownership housing agreements due to the fact that they affect the title of the property.
• Not all owners and developers are receptive to the agreements. Many see them as a barrier to selling dwellings.
• Owners and developers sometimes see the agreements as infringing on their property and housing market rights.