Misinformed on rentals

The letter published Jan. 14, “Rental subsidies all wrong,” contained incorrect information about the eligibility of the 333 Drysdale Boulevard project for a rental housing grant and, more broadly, the City’s efforts to encourage purpose-built rental housing and affordable rental housing.

All projects that receive rental housing grants are required to enter into a housing agreement that secures the units for purpose-built rental housing for a minimum of 10 years. In the case of the affordable rental projects that receive rental housing grants from the City of Kelowna, they will also have operating agreements with BC Housing that are usually for a term of 60 years. The housing agreement is placed on the title of the property, ensuring the units cannot be stratified without the City’s approval.

The project at 333 Drysdale Boulevard was originally envisioned as a condo project. However, the business plan for the project has subsequently shifted from a strata project to a purpose-built rental housing project. Traine Construction communicated this shift from strata to purpose-built rental when they applied for a rental housing grant in November 2018. Further, the applicant will be required to enter into a housing agreement before they will be eligible to receive the rental housing grant in the form of a Development Cost Charge (DCC) credit.

The revitalization tax exemption program and rental housing grants program were developed to provide incentives for primary rental housing, recognizing the importance of a stable supply of purpose-built rental housing for a healthy housing market. 

For example, the primary rental housing market is what the regional CMHC vacancy rate reflects. A growing proportion of the population is living in rental housing and it is important for the City to encourage ongoing investments in the rental housing stock to ensure a healthy supply of rental housing. Accordingly, the City uses a housing agreement to secure the units that receive the tax exemption or rental housing grant.

Moving forward, the City is looking to update the Revitalization Tax Exemption program and the Rental Housing Grants program to align with the recommendations of the Healthy Housing Strategy. Through the Healthy Housing Strategy, the City is considering shifting the focus of the rental housing grants program from purpose-built rental more generally to encouraging affordable rental housing where rents are subsidized as described by the Healthy Housing Strategy.

The City continues to see an important role for all forms of purpose-built rental and would continue to see a role for the Revitalization Tax Exemption program to support all forms of purpose-built rental housing (market and affordable). The review of these incentive programs is slated to begin in spring 2019.

Ross Soward,
City of Kelowna

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