City council likely won’t be dabbling in development anytime soon. The
recommendation to start a city housing corporation to develop affordable housing lost some of its thunder in council debate Monday. Touted as the key element of an eight-part plan to increase the city’s affordable housing stock by 300 units per year, the idea didn’t get full support.Instead, city councillors decided the municipality’s time is better spent researching one component of the proposed corporation’s mandate: establishing a city land trust. “I think it’s fairly safe to say that council is comfortable with moving forward with the land trust at this time, but the majority of council is not supportive of the affordable housing corporation acting as a developer,” said Coun. Norm Letnick who chaired the city’s affordable and special needs housing task force.
The task force was established last year to generate a list of ways the city could increase affordable housing for the many Kelowna residents cut out of the booming real estate market and struggling to find good rental accommodations. They presented eight recommendations to city council last fall. Letnick viewed the housing corporation as the key recommendation that could really change lives when the recommendations were initially debated last month. “It’s not what we recommend. We recommend to meet council’s need you had to do (the eight recommendations) and, of course, go with the housing corporation. But this is a step in the right direction,” he said.
Of those recommendations, a suggestion to set aside 20 per cent of the old Kelowna Secondary School site (now owned by the city) for affordable housing passed immediately, but councillors have either postponed decisions, or asked for more information, before weighing into debate on the rest. Early Monday morning, following their first information workshop on the issue, councillors decided their next step was to have city staff figure out how a land trust could work in Kelowna and create a job description to contract a land economist for a few key decisions involving the role the private sector should play in solving this crisis.
Establishing a land trust means creating a land bank reserve for social housing where private citizens, developers and corporations could donate land in exchange for tax incentives. The plan made a lot of sense to Society of Hope executive director Luke Stack who supports the land trust option, telling councillors he would like to see the city step up and alleviate residents’ struggles whether it’s technically within their mandate or not. Stack likened any city donations to the trust as similar to investing in park land.
“I know the city has limited resources that they can put into this because they do not have a tax base for housing. The tax base for housing is really paid to the province of B.C. But the city is in the land business and it already has a real estate department,” he said. The Society of Hope started building and running rental housing in the early 1980s and Stack’s been around long enough to empathize with developers’ complaints that building rental housing doesn’t pay. “If it costs someone $200,000 to build a unit and they have to put $50,000 into it as equity, they still have to cover the cost of the borrowed $150,000 to pay that debt. So you’ve got to be charging rents of $1,100 to $1,200 to cover that and that’s higher than people are paying today,” he said.
Monday’s workshop brought key members of the development community, the not-for-profit housing sector, a provincial BC Housing representative, city staff and councillors together to discuss what a housing corporation is and whether the proposed $30,000 land economist contract is worth the money. Representatives from the Urban Development Institute, representing local developers, told councillors they are struggling to secure land for building and that they see more problems for developers trying to build rental units than for those developing affordable low-cost units to sell. “This is a business. If it doesn’t make sense financially developers will just not develop,” Gail Temple, a spokeswoman for local developer Grant Gaucher, warned council.
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