Kelowna real estate boom forcing some renters out of longtime homes

Sarah Anderson doesn't want to leave her hometown, but she and her family of four may not have a choice.

"My whole world kind of just fell apart," she said, upon learning that her landlord planned to sell their rental home.

"Instant panic."

Anderson, 38, is one of many renters in Kelowna, B.C. nobody knows how many whose lives are being upended by an unprecedented real estate boom, as affluent people from larger centres jostle for the Okanagan sunshineand local landlords cash in.

Anderson lives with her husband Matthew Niemannand their two boys, ages threeand five. She's a stay-at-home mom, and Matthew worked in the hospitality industry before being laid off in the pandemic.

They pay $1,850 amonth for a two-bedroom half-duplex in the Glenmore neighbourhoodnear downtown. Finding another place for the same price, anywhere in Kelowna, she said, is impossible.

"Right now, a similar place would be about $2,500. I've seen them at $3,000 and that's far more than we can afford."

No statistics available

Nobody knows how fast rents are rising in Kelowna, nor how many families are in a similar position.

The CMHC collects vacancy and rental data for apartments only, not for the so-called "secondary market."

That means there are no statistics for muchof the rental stock available for families houses and duplexes with basement suites or carriage homes the type ofproperties favouredby people escaping the close confines of condos in Vancouver and Calgary.

According to longtime Kelowna Realtor Shawn Worsfold, the pandemic has upset the equilibrium that previously kept local prices in check, as people in other places reassess their situations.

"Kelowna has always been kind of that 'one day'or 'someday' dream," he said. "With COVID-19 and working from home, and the baby boomers moving into retirement age, that 'one day'is becoming now."

The influx of cash is driving up rentsand fast.

"It's astounding," said Worsfold.

In the past year, he estimates rents in the secondary market have increased about 25 per cent, causing what he calls a "rental trap" people unable to buy because they're stuck paying exorbitant rent.

For years, Kelowna city council has tried to counter low vacancy rates by encouraging developers to build more rental units. That approach has worked for people looking for one or two bedroom apartments, but not for growing families who need more room.

B.C. Housing Minister David Eby says 350 units of mixed-use subsidized housing are currently under construction in Kelowna.

"This housing doesn't show up overnight," he said.

Decisions made by previous federal and provincial governments, he says, encouraged ineffective private-market solutions.

"A lot of people predicted that this moment would come, that we would be in a situation of incredibly scarce rental housing if governments didn't step up. And, of course, here we are."

Sarah Anderson had hoped to escape the so-called "rental trap" by buying a home, but the barriers keep piling up.

Prices increased, fewer homes on market

Not only have prices increased, but there are fewer homes than usual on the market, and new listings attract unconditional offers above the asking price. Anderson's purchasing power is further diminished by recent federal changes to mortgage rules.

Kelowna mortgage broker Sally Hazel looked at the salaries required to buy an average home in the city today, compared to 2016.

Five years ago, the average home in Kelowna was $650,000. The household income required to purchase that home was $98,000.

Today, the average home price is $830,000, a 27 per cent increase.

However, thanks to recent federal "stress-test" rules, which require buyers to qualify at higher interest rates, the household income required to purchase that same home has increased to $143,000 a whopping 43 percent increase in just five years.

Over the same time period, the average household income in Canada has risen just over sixper cent, according to Statistics Canada.

'I want to retire here'

"It breaks my heart," said Sarah Anderson. "I was born and raised here. And I kind of imagined raising my family here. I want to retire here. And that's just not going to happen."

In the meantime, if her family is evicted and can't find a place, Anderson has a backup plan. Her parents live in a nearby city, 45 minutes away.

"It's just not something I want to do as a 38-year-old, go back to my parents basement ... with my family," she said.

To hear the interview with B.C. Housing Minister David Eby on Daybreak South, tap on the audio play button below: