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Kelowna’s population increased 14% from 2016 to 2021, making it the fastest growing city in the country.
A staff report that is headed to council on Monday says that 5,000 people moved to Kelowna in 2021 and many of them were moving from other provinces.
City staff say that home prices and the rental rate increase last year shows that Kelowna continues to be a “highly desirable” place to live and the strong demand for housing is anticipated to continue in the coming years.
However, city staff add that if homeownership prices continue to rise, the demand for rental housing will also continue to increase.
Despite multiple housing initiatives in Kelowna, “there is still a need for more housing that is attainable for a larger portion of Kelowna residents,” reads the report.
In addition, the report says the increased homeownership prices will result in more demand for lower-cost and subsidized rental housing – potentially putting more pressure on the city’s emergency shelters.
“If rental rates continue to rise and the gap between market rental rates and subsidized rental rates becomes too large, it will become more difficult for people to move from subsidized rental housing into market rental housing or home ownership,” the report explains.
Earlier this month, Zumper reported that Kelowna was the third most expensive city to rent in Canada with one-bedrooms averaging just over $1,700 per month in March. That report did say rent for one-bedrooms was down 5% but it had risen nearly 15% in the last 12 months.
City staff point to the importance of purpose-built rental housing.
“While Kelowna has brought on a record number of rental units in recent years, there is still unmet demand for rental housing due to strong population growth and decreasing vacancy rates," read the report.
In 2021 Kelowna exceeded $1 billion in building permits with more than 2,800 permits being issued.
The city’s housing report indicates that there is a “significant” amount of housing in the development approval process.
City staff explain that about 60% of those developments are in the form of apartments, 20% are townhomes or house-plex housing and the remaining 20% are single dwelling housing.
Last year, 716 new purpose-built rental units were completed and occupied. Another 1,493 units have been approved. However, the report says those will take up to three years to be completed.
Although the city is investing in purpose-built rental housing, Kelowna’s vacancy rate remains low at 0.6%. A healthy vacancy rate is between 3% and 5%.
“Overall, an adequate supply of market rental housing that aligns with local incomes is critical to provide relief from expensive home ownership and to reduce pressure on subsidized rental housing.”
The report concludes by saying that there is no one solution that will solve Kelowna’s housing challenges. City staff say they will continue to work on existing initiatives and develop new ones to address the city’s housing crisis.
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