With vacancy rate high, Kelowna consider changes to developer rental incentives

Scale back rental incentives?

Photo: Contributed

Drawings of new Hadgraft Wilson building

Kelowna’s rental vacancy rate has soared to nearly seven per cent, largely due to incentives such as the rental-only subzone which gives developers a parking reduction in exchange for rental in perpetuity.

With a healthy vacancy rate, the question of whether these incentives should continue came up at the end of a discussion on a rental-only rezoning application for the new Hadgraft Wilson development in the Capri-Landmark neighbourhood.

Incentives within the rental-only subzone include tax revitalization exemptions, a 20 per cent reduction in parking requirements and additional floor area ratios.

“I have serious concerns with this continuation of the rental-only zone, considering the market conditions have evolved significantly since this incentive was put in place,” said Coun. Ron Cannan while supporting the application.

“I want to find out if staff will be bringing back recommended changes to the rental only zoning or is this going to continue on a case-by-case basis?”

While the city does not appear to be looking at eliminating the rental subzone completely, planning and development services director Ryan Smith says some other changes which could affect the zone are coming shortly.

“In terms of updates to the rental only subzone, we have been working on updates to parking and loading bylaws as well as other components,” said Smith.

“In a way, we are working on various components that will flow through the subzone as well as parking in general in the city.

“Council will see those in the next couple of weeks.”

Coun Luke Stack threw his support behind both the project and incentives.

“Most non-profits do have reduced parking because they are a rental building, and I know this is probably the same zone as when they were downtown, so this is just a re-creation of what they already had,” said Stack.

“I have a high degree of confidence they will require the 10-year tax incentive to make the project pencil out and they will be able to easily manage the parking which they get as a result of this designation.”

The project at Springfield and Pridham in the Capri-Landmark district replaces the downtown building deemed uninhabitable due to significant damage caused by construction at the adjacent UBCO downtown tower.