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Central Okanagan housing market tightens following fires

Short supply of rental housing, high development costs will make it tough for West Kelowna wildfire evacuees to find new homes
west-kelowna-chimney
Only the chimney is left of this home after the McDougall Creek fire.

The Central Okanagan’s housing shortage is expected to be exacerbated by the McDougall Creek wildfire.

A total of 189 properties are now confirmed damaged or lost to wildfire in the Central Okanagan as of Aug. 28, but some of those properties have multiple residences meaning the loss of housing is far greater. Lake Okanagan Resort, for example, had 150 units of housing that are now lost to the market.

On Aug. 3, just two weeks before the McDougall Creek fire erupted, the City of West Kelowna published its draft housing strategy which cites a current core housing need of 790 units based on the 2021 census. A further 1,816 units are required between 2023 and 2031 to meet anticipated demand, according to a housing needs assessment the city completed last year. In total, 1,773 homes are required for purchasers and 833 for the rental market through 2031.

This works out to 290 starts a year, well below the 386 housing starts Canada Mortgage and Housing Corp. data reports West Kelowna seeing last year.

But the type of housing is important, not just the number.

CMHC figures indicate that the majority of housing starts last year were for purchase, with just 90 units intended for the rental market, or three less than the number West Kelowna says it requires annually. Just 4 per cent of housing units are in the rental market, versus 9 per cent province-wide.

"Continued development of housing of this tenure is needed to reduce rental market constraints and provide options for residents in the community," the raft housing strategy states.

The shortfall has meant steadily increasing rents, with purpose-built rental units in West Kelowna renting for an average of $1,719 a month as of October 2022, a 9 per cent increase from a year earlier.

The regional situation is not much better.

Central Okanagan housing starts totaled 3,382 units last year, with the average two-bedroom unit in the region now renting for $2,365 a month.

Key barriers to creating additional housing to address local needs include the rising development costs that the report says, "make it difficult -- and in some cases impossible -- to get nonmarket and rental projects off the ground." A limited land base contributes to the high cost of development, while municipal approval processes add time.

Community support for key housing types, including non-market rental, supportive housing and complex care facilities is also lacking.

RDCO board chair Loyal Wooldridge acknowledged Aug. 25 that housing is a challenge.

“We'll continue to work with the provincial government on finding spaces for people to be able to live. Obviously, we know that we've also got post-secondary students coming to town just starting in September.”

“It's going to be a very fluid situation. We understand the housing crisis that we're currently in, this will put pressure on it,” he continued, explaining there will be a “concerted effort” through the recovery process to find people homes to live in.

“Especially those with circumstances like pets and mobility challenges," he added.

A resiliency centre will be opened later this week on Westbank First Nation lands for anyone impacted by the fire.

RDCO chief administrative officer Sally Ginter said the district has taken some “learnings” for the recovery to the 2021 White Rock Lake fire into account.

“We have taken all of that feedback and incorporated it into the design of the resiliency centre. So there will be more information, I just wish to assure everyone that there's been a lot of thought put into it," she said.

Wooldridge said the regional district is advocating to upper levels of government for infrastructure funding specifically for rural and remote areas that lack a tax base for rebuilding.

He also said they are asking the provincial government to better fund emergency operations at the local level.

“Right now, it's a function off the side of many desks of senior leaders and we are looking to the government to help us fund that for an annual function.”