An experiment intended to add to the area’s stock of affordable housing appears to be coming to an end.
The developer of the 18-unit Naramata Court townhouse complex has asked the Regional District of Okanagan-Similkameen to waive a special covenant that holds the price of homes there at 10 per cent below market value.
Wildstone Holdings agreed to the covenant in 2010 in exchange for the RDOS rezoning the site to multi-family residential.
“I think it’s important to note that it was essentially a pilot project that the previous (RDOS) director felt very strongly (about) and Wildstone came to the plate to make that happen for the community,” Naramata Director Karla Kozakevich told the RDOS board last week.
“We’ve learned a heck of a lot about what to do and not to do with a covenant for any future projects like this.”
She explained part of the problem with the plan lies in prices being based partly on past sales, “So as you keep doing this, the value goes down and down, because it looks at the previous one that was 10 per cent below market value.”
The covenant on the townhomes was originally designed to last for seven years, but was amended at the developer’s request in 2012 to drop off after the first transfer of ownership in a bid to boost sales. Just three homes had been sold at the time.
Kozakevich said only four units remain unsold now, and the developers intend to buy them from their own company, Wildstone, in order to pay off the construction loan, then keep them as rental homes.
The covenant also requires that sales be arm’s-length, so the developers are currently unable to buy the units from themselves.
The plan to drop the covenant will be sent to a public hearing at an as-yet determined date, before going back to the RDOS board for final approval.
An official from Interior Health has already spoken out against the idea.
Environmental health officer John Beaupre told the RDOS his organization does not support the move since access to affordable housing reduces stress on people and frees up money for healthy living.
“Interior Health shares a vision with many of its business partners in the field of community planning of affordable, accessible, and good quality housing for all that is free of hazards and enables people to engage in activities of daily living while optimizing their health,” Beaupre wrote in response to a routine request for comment.
One of the units in Naramata Court that’s still listed for sale is a three-bedroom, two-bathroom home with an asking price of $319,000.