The foundation goes in for a development on Dickson Road in Kelowna, Friday, May 29, 2015 which will contain 40 micro suites.

(JOHN MCDONALD / iNFOnews.ca)

KELOWNA - Concerns about micro suites and their impact on City of Kelowna finances, plus how and where they are built, are raised in a new report by city staff.

City planner Ryan Roycroft says the city has already foregone $1.7 million in development cost charges for the 315 so-called shoe box suites which have been approved in Kelowna since the beginning of the year.

Developers can also theoretically “double-dip” by combining the provincially-mandated development cost charge exemption for purpose-built rental units with other tax incentives and housing grants, Roycrofts says in the report.

Lack of a definition of what a micro suite is means they can currently be built anywhere which allows multi-family development and the lack of living space in micro suites and reduced amenities in the buildings which house them means residents are more likely to use public amenities in the surrounding neighbourhood.

To counter these negatives, the report recommends increasing other development cost charges to cover the lost revenue.

As well, the reports says changes should be be made to the revitalization tax exemption programs for downtown and Rutland, and the housing opportunities reserve fund, to eliminate the possibility of overlapping incentives.

To control where micro suites can be built, the report recommends inserting a definition of what constitutes a micro suite in Kelowna’s zoning bylaw.

This would serve to restrict them to the downtowm core and near the UBC Okanagan campus as well as force developers to provide specific on-site amenities in micro suite developments such as exercise facilities and entertainment rooms to augment the small living space.

While the province mandated a development cost charge exemption for micro suites in 2008 under the Local Government Act, it took until 2014 before such a development was proposed for Kelowna.

Since then, the city has approved three such developments, all for purpose-built rental housing. A fourth development for just four units is in the works but is for market condominiums.

City council will consider the micro suite report at its public meeting, 9 a.m. Monday, June 1 at Kelowna City Hall.

To contact the reporter for this story, email John McDonald at jmcdonald@infonews.ca or call 250-808-0143. To contact the editor, email mjones@infonews.ca or call 250-718-2724.

News from © iNFOnews, 2015