KELOWNA - The incentives the City of Kelowna uses to encourage rental housing construction are finally getting the bites from developers needed to meet the annual goal of 300 units.
In fact, the incentives are working so well in 2016 there’s an estimated 1,048 rental units under construction, about to begin or are in the development application process, council Kelowna council heard from planner Ross Soward.
“The trends in take up are good,” he said. “The development community has really started to respond to low vacancy rates.”
Soward called the programs “effective” but said it comes with a cost councillors should recognize going forward, giving the example of a recent 70-unit project that will cost the city about $35,000 a year for ten years in foregone tax revenue.
“It doesn’t seem like much individually but it adds up,” he said. “It’s important for staff and council to be cognizant going forward as the housing market continues to change.”
In the meantime, Soward said three of this year’s rental housing projects are also taking advantage of the development cost charge exemptions available for micro suites.
Coun. Gail Given praised the incentive program but questioned why some projects could still “double dip” by getting a tax break as well as the development cost charge exemption.
“That’s maybe not what we planned as council,” Given said.
Coun. Luke Stack also praised the incentives program and said council can revise it down the road should demand overwhelm supply.
City council has been struggling to stimulate rental housing development since 2012, when it first began aiming for the construction of 300 purpose built units ever year.
It was only last year the city finally reached that target, permitting the construction of 329 rental units, most of them micro suites.
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