Kelowna high-rise rental tower should help with housing affordability
Kelowna’s Mission Group is moving ahead with plans to build what its executive vice-president Luke Turri says may be the first purpose built rental high-rise in the city.
City council will review a development permit with variances at its Nov. 15 meeting for the 19-storey building that’s two storeys higher and 20 more units than originally envisioned.
“Since we submitted the application in early 2021, there’s a lot that’s changed in the development marketplace,” Turri said. “Cost escalation and interest rate increases have made rental projects in particular much tougher to be feasible.”
By adding the extra units there will be 157 rental apartments ranging from studios to two-bedroom units.
Through the Canada Mortgage and Housing Corporation’s MLI Select program, Mission Group will rent 15% of the units at 30% of the “median renter household income” in Kelowna.
While that figure will change between now and opening day in two years, its listed by CMHC as $47,500 today.
That means the rent for about 24 of those units will likely be about $1,200 per month. The average rent for a one-bedroom apartment in Kelowna today is $1,900.
In return, Mission Group can take advantage of lower costs through the MLI program, which stands for multi-unit mortgage loan insurance. It’s an effort by the federal government to get more rental housing built in Canada.
“Purpose-built rental in Kelowna has always, traditionally been wood frame construction,” Turri said to explain why Mission Group may be the first the first in the city to do this. “We’re starting to get to the point now, with land values and rental rates the way they are, in some of these higher amenity locations that can support more density and more height, concrete construction is starting to become more feasible.”
As well, given the high demand for rental in the downtown core, there’s not enough land to fit all the housing units that will be needed if they're going to be low rise.
Whether it will be the first of its kind in the city may be a matter of timing. In September, city council approved the 25-storey “Muse” purpose-built rental highrise on the former RCMP site at 350 Doyle Ave.
The Mission Group site is four single-family lots consolidated into one at 1333 Bertram St. between Fuller and Cawston avenues. That’s north of the Mission Group’s three-tower Bernard Block project, now under construction, and the 43-storey proposed UBC Okanagan downtown campus. That will have two Mission Group high-rises next to it as well.
READ MORE: This corner of downtown Kelowna is about to change drastically
The zoning for this rental site only allows for 12 storeys but through a “density bonusing” program the city permits 15 storeys.
Mission Group is asking that to be increased to 19 storeys since it will still be within the maximum allowable height of 56 metres.
Under the bonusing program, developers have to pay $50 per square metre of their lot size in order to qualify for the extra height. In this case, it’s costing Mission Group just under $114,000.
Those height limitations are one reason why the tower is not being proposed to go beyond 19 storeys.
Other factors include the fact that more units would require more parking and that’s tight in the proposed three-storey parking podium as it is now. Mission Groups is asking for a variance to allow more small car spaces in order to fit them all in.
It's also to the eastern edge of the city’s downtown highrise zone.
“We landed on 19 stories as being a correct balance between maximizing the development potential of the site and being in alignment of the overall vision of the city’s Official Community Plan,” Turri said.
The density bonusing provision is also why it may be possible to build a 40-storey rental tower at the corner of Pandosy Street and Harvey Avenue, Ryan Smith the city’s Community Development Department manager told iNFOnews.ca.
READ MORE: New 40-storey highrise tower proposal part of 'gateway' to downtown Kelowna
That project, proposed by Ridge North America, is on land it’s buying from the city. All the details of the design are yet to be filed so Smith couldn’t say whether his staff will support the application or not but the potential is there.
It's also not known at this time if a similar affordability factor will be included in that project.
City staff are recommending council support the Mission Group application.
If that’s the case, Turri expects construction to start early next year and be finished in the spring of 2025.
Along with the Bernard Block, the Mission Group built the Ella highrise downtown, has started construction of the second and final phase of the Aqua project south of the Eldorado Hotel and has other lower rise projects around the city and in Penticton, including student housing at UBCO.
Last December, Mission Group also bought the former B.C. Tree Fruits building next to the Tolko Mill site for $24 million.
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