20,000 Homes Coming to Kelowna?
It is not Christmas yet but two weeks ago, the Government of Canada announced an allocation of $31,500,000 to Kelowna to aid in providing affordable housing. While the specifics of how the funds will be used are not yet clear, Kelowna Mayor Tom Dias indicated at a recent UDI Luncheon that his team is working through the details. He noted that most of the funding is expected to cover infrastructure costs or help in acquiring more city-owned land for public benefit. This week, we turn our attention to the ambitious plan to construct an additional 20,000 homes. The housing supply shortage in Kelowna, which is certainly affecting affordability, is undeniable. Kelowna has been successful in demonstrating the need for more housing to the federal government, securing a notable $31.5 million in funding. It's easy to be swept up by eye-catching headlines in politics, but a closer examination is needed to assess the feasibility of these 20,000 homes, particularly the target of 950 homes annually over the next three years to jumpstart the project. Reflecting on the building permits approved in the last three years, the City of Kelowna shows a downward trend. This decline can be attributed to rising costs and a softening labor market. In 2021, there were 3,662 building permits approved, followed by 2,282 in 2022. As of August 2023, only 1,568 permits have been approved. This trend is concerning, given the pressing issue of housing supply. Nevertheless, it's reassuring to see the City taking proactive measures, not resting on the laurels of the construction boom from permits approved in 2021 that are just now materializing in the market. Moreover, the Provincial Government's announcement on November 2nd outlines proposed legislation and upcoming regulations that will allow one secondary suite or one laneway home per property across B.C. In municipalities with populations over 5,000, the proposed changes will also mandate bylaws to permit: - Three to four units on lots currently zoned for single-family or duplex use, depending on lot size. - Six units on larger lots zoned for single-family or duplex use and situated close to frequently serviced transit stops. The challenge will be the anticipated lag: in 2 to 3 years, we might see a 40-50% decrease in new home completions compared to current rates. This could inadvertently benefit current homeowners by driving up housing prices. In 2022, residential construction was Kelowna's largest economic sector, with an impact exceeding $2.5 billion, outpacing both high-tech and tourism sectors. Kelowna faces various challenges, including adapting to how the government is modifying city zoning approvals. One must wonder how many affected cities are capable of adjusting to these changes. Although municipalities are ultimately responsible for approving zoning, I am concerned about a potential bottleneck that could contradict the current Official Community Plan. The Province's and cities' visions may differ, and it will be intriguing to see how implementation unfolds. However, given the reduction in permits to about half of what they were a few years ago, the city should have the capacity to adjust, especially with the aid of AI they are utilizing. Securing this funding should significantly impact Kelowna's affordability. As the saying goes, "the proof of the pudding is in the eating," so let's reconvene in a year to evaluate how many of the projected 950 units have received approval.
What in the world can we do for you? Let us know. Mark and Maddie
Coming Next Week- October Statistics