affordable housing

In the last five years, home prices in the Central Okanagan have risen by more than 50 per cent,* with the average home price in Kelowna now sitting at just over $1 million. Unaffordable home ownership has cascading effects across the housing system, raising demand and prices for rental housing, ultimately making all housing forms less affordable.

The role of a well-functioning housing system is a critical factor in creating healthy, diverse and vibrant neighbourhoods. A growing, thriving community like Kelowna needs a wide range of housing types to meet the needs of residents at all stages of life, including students, young families, seniors, and everyone in between.

Our housing supply must also meet the demands of a rapidly growing population. Kelowna is one of the fastest growing and sought after communities in Canada. Without an adequate supply and diversity of housing, the community’s housing challenges will persist. There are many factors outside of the City’s control, such as interest rates; housing market dynamics; and land, construction and labour costs. However, we are pulling all the levers within our sphere of influence—such as development regulation and processing, as well as incentives—to affect change and meet our goal to improve housing affordability for our residents.

In 2023, the City was able to issue $1.8 billion worth of building permits—up 46 per cent from 2022. Having processed permits for 4,039 new homes, the housing supply is set to start catching up to demand after a record year. Multi-unit housing led the way, representing over 87 per cent of building permits issued, with apartment housing rounding out the majority.

The City has also worked hard to create a development environment that is highly supportive of rental housing. Tax incentives, regulatory incentives like reduced parking requirements, and grants have all combined to attract the highest level of investment in purpose-built rental housing in Kelowna’s history. At the end of 2023, there were over 2,800 rental homes under construction, with over 7,000 in the development pipeline. This unprecedented level of new supply will help reduce vacancy rates and moderate price increases.

Ground-oriented missing-middle housing was still lagging in 2023 with only 128 new homes issued permits. However, through our Official Community Plan, Kelowna has designated the City‘s Core Area for higher densities to encourage multi-unit development such as groundoriented housing and apartments, notably within our five urban centres. Council also recently endorsed the “Middle Income Housing Partnership," a new initiative to use Cityowned land to build more housing below market rates. The program aims to deliver new affordable rental housing projects with a minimum of 20 per cent of units that are 20 per cent below market rate.

Over the course of 2023, the City continued work on the Infill Options program. The program was designed to implement changes across City regulations and processes to support a greater variety of ground-oriented housing options throughout our community.

In the fall, the City was the successful recipient of $31.5 million in grant funding from the Housing Accelerator Fund. The funding will be spent over the course of the next three years to improve the supply and diversity of housing being delivered to meet the needs of current and future Kelowna residents. The grant will support seven initiatives over the next two years, including items such as supporting development along transit corridors, acquiring land, and exploring new partnerships for affordable housing.

The City also advanced several important initiatives, including restrictions on Short Term Rental (STR) accommodation. Following the provincial government’s STR regulations, the City amended Kelowna’s Zoning Bylaw to remove STRs as a secondary use to help ensure rental properties are used for residents and will contribute to targets within the Housing Needs Assessment

The City will be working throughout 2024 to align with new provincial legislation around STR accommodation, infill housing and transit-oriented development. Taken together, these represent the most sweeping land use changes in Kelowna in decades. Through these shifts, more compact, complete communities will be easier and faster to build.

Read the 2023 Annual Report to learn more.

*SOURCE: ASSOCIATION OF INTERIOR REALTORS key actions and achievements