Although the vacancy rate in Kelowna currently sits at just 1.5 per cent, the city is not concerned, saying those numbers tend to fluctuate on a yearly basis in the Central Okanagan.
Rates have ranged between 1.5 and 4 per cent over the past couple of years, but with numbers this low, it’s typically a time when the development community will respond.
“Whenever the vacancy rate gets low, theoretically it should entice developers in the market to build more rental housing, simply because there are more people looking for rental units than there are units available,” says Gary Stephen, the City of Kelowna’s long range planning manager.
“Under those circumstances, we would consider using some of our programs.”
The programs that Stephen is referring to are a rental grant program that supports the creation of new units, and a tax incentive program for rental housing that will forgive taxes for up to 10 years. Both of these are in place for times when the housing market needs a helping hand, which some suggest could be now.
“Three per cent is what’s considered to be a healthy vacancy rate. Where there is enough room in the market for people to still find a place, but it’s still enough room to entice developers into the market to build more,” he says.
However, Stephens cautions people not to expect new housing to just magically appear, noting that it takes anywhere from 1 to 3 years to get a project up and running from the time an application is made, until the time it’s completed and ready for occupancy.
Aside from the limited supply of units available in the city, Christine Hawkins from Kelowna Community Resources is also concerned about the lack of affordable housing.
“The people that come through our doors are really struggling to make ends meet and not only with the low vacancy, there is also fairly expensive rents out there,” she says.
A report on the 'State of the Child' says that monthly rent, heat and electricity costs in the Central Okanagan average $1264.96 per month. For housing costs to be considered affordable, the amount used for shelter costs should not account for more than 30 per cent of a family’s household income after tax. That means for those living in the Central Okanagan, it must exceed $43,000 annually.
Given that BC’s minimum wage is $10.25, it makes things difficult on those families when the living wage rate in the Central Okanagan (based on two full time earners) is at least $18.
The report also states 17.5 per cent of children in the Central Okanagan live in low-income households, according to Statistics Canada. And 34.2 per cent of single parents households have income levels that fall below the Low Income Measure (LIM), which means their household income is 50 per cent or less than the median household income level for this area.