March 20, 2015 - 2:34 PM
KELOWNA - Rental housing construction is undergoing a renaissance of sorts with the City of Kelowna reporting a surge of construction activity in the last 18 months.
Recent focus has been on so-called micro-suites — units with a floor area under 29 square metres — but Doug Gilchrist, director of community planning for the city, says there is evidence of a resurgence in other rental catagories as well.
“It’s starting to come back for various reasons although our vacancy rate hovering near one per cent helps,” Gilchrist says. He adds labour costs are lower than they were before the crash of 2008, which is about when rental construction dried up.
Interest rates are also at historic lows, at a point where rental housing is attractive to build, even though it takes considerably longer for a developer to recoup his investment.
“Certainly, anything that helps the bottom line of developers helps us. I wouldn’t call it the perfect storm but there’s definitely been an upswing,” Gilchrist says.
It doesn’t hurt that the city offers incentives to developers through the affordable rental housing grant program, which essentially gives them a rebate on their development cost charges.
“We have incentives in place to help ensure a stable development market for rental housing” he says. “We have a target of 300 rental units per year to keep up with growth demand.”
Some 320 micro-suites, all meant for the rental market, are under development in Kelowna.
In addition, Gilchrist says there are rental projects underway in various parts of the city including Dilworth Mountain, and Central Green where construction is proceeding on two social housing projects at the Harvey Avenue site.
He thinks developer Stober Construction is likely to build "a signficant amount" of rental housing at Central Green.
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News from © InfoTel News Ltd, 2015