The project, a combined effort from PC Urban Properties and Nicola Wealth Management, will be comprised of 52 per cent family-friendly two- and three-bedroom units, outdoor amenities, indoor social and activity rooms, EV charging and car share on Gordon Drive.
Shawn Smith, PC Urban CFO, said that while rental buildings were a hard sell to developers years earlier, a lot has changed in recent times.
“I think a few things changed. I think the rents have gone up as everybody knows, and there’s a supply shortage,” he said. “So the demand is there and the supply needs to come online, so it’s just much more favorable conditions to develop.”
With rentals being a financially viable proposition for developers, the city still has to do its part to lure them to the Okanagan.
Kelowna Mayor Tom Dyas said city staff ask developers to establish rental housing, just as they do with purchase housing.
“There seems to be a little bit of a change within their industry, that instead of them looking at building properties and then just selling it, they’re building properties and then retaining it and allowing for the continual ownership of that through the rental revenue,” Dyas said.
“Part of it also has to do with the program that was implemented in the city to allow for a grace period on Development Cost Charges of 10 years with rental projects.”
Kelowna currently has below a 0.6 per cent rental vacancy rate and increasing it is key to keeping rental rates under control; that means somewhere between three and five per cent.
The new development will also bring 50 new daycare spots to the city, something else the city is in dire need of.
“The developer recognized that where they were building this property was on a daycare site,” Dyas said.
“They also recognized the impact that it had on the community when they were looking at the daycare closing down. Through discussions with myself and MLA Merryfield and, and also PC Urban, we were able to extend that for another four months to give a little bit of time for those parents to look at planning for the future.”
Dyas conceded that more than 50 daycare spots would have been ideal but the developer has to balance off the revenues that come in from rentals along with commercial revenues and daycare spaces to make the project work.
“I know that this council will continue to advocate for daycare spaces in projects that are put before us and hopefully make up what this community is needing because there is a definite need for more and more daycare spaces for our community,” he said.