June 17, 2016 - 8:00 PM
'PRETTY HARSH LISTENING TO A SIX-YEAR-OLD CRY BECAUSE SHE WANTS HER MOMMY'
CENTRAL OKANAGAN - The rental housing crisis in the Central Okanagan has intensified dramatically in the last year and is going to get worse before it gets better, says Kelowna's mayor.
While supply has been an issue for several years, this now seems primarily a crisis of affordability as landlords in the region, stung after the 2008 recession by years of low rents and high vacancy rates, take advantage of a dearth of rental housing to jack up rents.
It doesn’t help that the city’s burgeoning tech and education sectors is at the same time bringing thousands of young people into the city, putting them in competition for rental space with working families and retirees who continue to flock to the region.
A complicating factor is the rise of Air BnB, with some landlords opting out of rental housing in favour of the more lucrative short-stay vacation rental market.
Rental listings in the mid-to-low price range have dried up leading to bidding wars and disturbing stories of families forced to live in motor homes and motel rooms as they fight to find affordable accommodation. Local homeless shelters are seeing non-traditional clients at their door, working poor who lack the income to secure an increasingly rare rental unit.
Society of Hope executive director Luke Stack calls it the “best of times and the worst of times” for rental housing, with numerous multi-family developments, both market and low-income, in the works. However those units won't come online until later this year and until then, expect “intense pressure” on rents and availability.
Stack says front desk staff at the non-profit society have been fielding numerous calls from desperate families hoping to secure one of more than 450 affordable housing units it manages.
He wouldn't release the full data set, but Stack says internal rental rate surveys the society conducts have shown a big spike in recent months.
“I thought there was a mistake. I couldn’t believe how much rents have gone up in the last year,” Stack says. “It’s certainly not a good situation.”
The example he did release shows the average advertised rent so far in 2016 for a one-bedroom apartment in Kelowna of $961 a month with a two-bedroom apartment going for $1,352. And those numbers have been "normalized", Stack says, with extras like cable, internet, pets or paid utilities deducted from the advertised amount to give a better comparison of base rents.
Padmapper.com tracks average rental rates across Canada and just released its first national rental report. and it shows a similar trend in Kelowna — the median rent for a one-bedroom apartment of $900 went up 1.1 per cent from May to June and median rent for a two-bedroom apartment rose 1.5 per cent to $1,360 a month.
In its 2016 housing report, the City of Kelowna estimates more than 30 per cent of households cannot afford the housing they have; the amount spent on shelter is 30 per cent or more of total before-tax household income.
The numbers quantify the problem but Kyla Sayers is living it.
“A year ago, we had no problem getting a place and the rent wasn’t too bad,” she says. “Now there’s nothing, unless you have lots of money and you’re this perfect family.”
She says her own low point was the beginning of June when she had to make the heart-wrenching decision to break up her young family, sending her oldest daughter to live with her ex and keeping the youngest with her and her partner.
“It was pretty harsh listening to a six-year-old cry because she wants her mommy and wants to come home and wants to know what’s going on,” Sayer says.
Sayers is a stay-at-home mom and her partner Jason works full-time as a line cook, putting them squarely in the category of renter most likely to suffer under the sky-high rents.
Sayers says didn't think it could get worse, but it's already the middle of the month and still nothing has come available, with the temporary situation they are now in — living with her partner's mother — coming to an end June 30.
"On the first (of the month) we wil be out on the streets as we can't stay where we are," she adds. "I'm at a loss as to what to do."
Even before the rental crunch morphed into a crisis, Kelowna Mayor Colin Basran says the city was doing all it could to encourage rental housing, trying to move the needle on the city’s dismal vacancy rate.
In Kelowna, developers are eligible for an array of incentives, including reduced property taxes, discounted development cost charges and straight-out grants for building rental units.
Those incentives finally paid off this year when the city, for the first time since 2012, met its minimum target and approved construction of more than 300 purpose-built rental units. It expects to do so again next year.
Most of those units will not become available until 2017, however, and Canada Mortgage and Housing Corporation predicts the vacancy rate in Kelowna will drop to 0.5 per cent this year and only climb back up to 0.7 in 2017.
“We are growing so quickly and at this point demand is certainly outpacing supply. Unfortunately, there is no silver bullet and solving this requires time,” Basran says.
The mayor praises the development community for stepping in to fill the gap, but for the previous three years, even with same array of incentives in place, almost no purpose-built rental housing was constructed in the city.
As much as the city has done to stimulate rental housing develoment, neither Basran nor Stack think the city should take the one step it hasn't yet — building and managing such housing on land the city already owns.
"We don't get funds or collect taxes for that purpose," Basran says. "If we were to go that route it would require program cuts or signficant increases in taxes."
Stack concurs, saying private development or non-profit societies like his are better equipped to provide affordable rental housing, with the city providing more of a supporting role.
"I don't think the city should be a landlord," he says. "The city has provided land over the years for projects and we've been very successful as far as attracting big money from the province and that's the role I think we should continue to play."
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