Despite the completion of a major rental project on Duncan Avenue this year, Penticton has seen a decline in the city’s rental vacancy rate, according to an annual national report on the rental market.
The Canadian Housing and Mortgage Corporation’s yearly Rental Market Report was released Tuesday, and it shows a narrow vacancy for much of the province, including Penticton.
In fact, while B.C.’s 1.3-per-cent vacancy rate remained flat from last year, Penticton’s rental vacancy dipped from 1.1 per cent last year to 0.9 per cent this year. In fact, Penticton’s rate falls below the rates of most major cities in B.C., with just Kelowna, Abbotsford, Victoria and Campbell River.
Kelowna and Abbotsford each had a narrow 0.2-per-cent vacancy rate, marking the lowest in Canada.
But the quality of the data for Penticton, too, has significantly decreased — the 2016 vacancy rate was rated at a level ‘a’ for reliability, which the CMHC called “excellent.” But this year’s data was rated at a level ‘d’ for reliability, or “fair (use with caution).”
Development services director Anthony Haddad said the city has been trying to tackle the issue through approvals of at least two housing projects that would add density to the downtown area.
“We’ve got approximately 100 new affordable housing units, non-market units, that are in the downtown,” Haddad said. “We’re certainly putting all our efforts in, trying to improve the amount of rental stock in the community ,and more affordable rental stock, as well.”
One of those, Haddad said, has already begun construction on Backstreet Boulevard, while construction at the city lot at Brunswick Avenue is expected to get underway early next year.
But that 0.2-percentage-point drop in Penticton’s vacancy rate came even as the city added over 100 units to the rental stock through a major rental apartment building on Duncan Avenue seeing completion this year.
“That was 100-per-cent rented out very shortly after it was opened,” Haddad said. “Over the past couple of years we’ve been trying to get ahead of the game with a lot of the approvals that have been put in place.”
On top of the affordable housing projects on Backstreet and Brunswick Avenue, Haddad said the city is expecting another 100-plus-unit project to come online on Kinney Avenue, a similar project to the Duncan Avenue spot.
But Haddad said he feels that project could fill up as quickly as the development on Duncan Avenue.
He added the city’s concentration is more on the affordable rentals, and is looking at expanding the city’s capacity for carriage houses, basement suites and more.
“There’s been a lot done, and we’ve got to continue down that path to make sure we improve the supply of the more affordable housing rental stock within the city,” he added.
The issue was mentioned briefly in budget talks, as Haddad presented on economic development. Coun. Helena Konanz pointed to concerns with the vacancy rate, and questioned Haddad on the city’s initiatives to attract more rental units.
“One of the benefits of the integration into development services is their relationship with economic development and our planning department, who are looking out into the future,” Haddad told council.
“Right now, we’ve got our development cost charge reduction bylaw that has 100-per-cent reduction in development cost charges for purpose-built rental housing.”
On top of that, with current economic incentive bylaws approaching expiry, the city is looking at economic incentive zones to encourage rental developments in desired spots in town.
According to the report, the average price has gone up in the city, from $800 a month last year to $838 this year, a 5.7-per-cent increase. That included average increases of about $40-50 for bachelor suites up to two bedrooms, compared to an increase of $120 for the average three-plus-bedroom suite.
The average one-bedroom suite now goes for just under $780 a month, according to the CMHC report.
In total, Penticton has 2,079 rentals, meaning just around 19 rentals are available in the city.