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 collapsed,” she said when she learned that her landlord was planning to sell her rental home.
“Immediate panic.”
Anderson, 38, is one of many Kelowna, BC, tenants – nobody knows how many – whose lives are being turned upside down by an unprecedented real estate boom as wealthy people from major centers battle for the Okanagan sun and local landlords make money.
Anderson lives with her husband Matthew Niemann and their two sons, ages three and five. She is a home mom and Matthew worked in the hospitality industry before she was laid off during the pandemic.
You pay $ 1,850 a month for a two-bedroom half-duplex in the Glenmore neighborhood near downtown. It is impossible to find anywhere else in Kelowna for the same price, she said.
Kelowna is facing an unprecedented real estate boom. (Andrew Kurjata / CBC)
“Right now, a similar place would cost about $ 2,500. I’ve seen it at $ 3,000 and that’s way more than we can afford.”
No statistics available
Nobody knows how fast Kelowna rents are rising and how many families are in a similar situation.
The CMHC collects vacancy and rental data only for apartments, not for the so-called “secondary market”.
That means there aren’t statistics for much of the family rental portfolio – houses and duplexes with basement suites or caravans – the type of properties preferred by people escaping the narrow confines of condominium in Vancouver and Calgary.
According to longtime Kelowna real estate agent Shawn Worsfold, the pandemic has upset the balance that previously kept local prices in check as people in other places reassess their situation.
“Kelowna has always been a kind of ‘one day’ or ‘one day’ dream,” he said. “With COVID-19 and working from home and baby boomers entering retirement age, this ‘one day’ is going to be now.”
The inflow of cash is driving rents up and quickly.
“It’s amazing,” said Worsfold.
Over the past year, he estimates that secondary market rents have increased by about 25 percent, creating a “rent trap” – people who can’t buy because they pay excessive rents.
The price hike could force some longtime Kelowna (city of West Kelowna) residents.
Kelowna City Council has been trying for years to address the low vacancy rate by encouraging developers to build more rental units. This approach has worked well for people looking for one or two bedroom apartments, but not for growing families who need more space.
BC Housing Secretary David Eby said there are currently 350 mixed-use units under construction in Kelowna.
“This case doesn’t show up overnight,” he said.
Decisions by previous federal and state governments, he says, have promoted ineffective private-sector solutions.
“A lot of people predicted that that moment would come, that if governments didn’t intervene, we would be in a situation of incredibly scarce rental housing. And of course we are here.”
Sarah Anderson had hoped to escape the so-called “rental trap” by buying a home, but the barriers are mounting.
Prices increased, fewer apartments on the market
Not only have prices risen, there are also fewer apartments on the market than usual, and new offers result in unconditional offers above the asking price. Anderson’s purchasing power is further diminished by recent state changes to mortgage regulations.
Kelowna mortgage broker Sally Hazel looked at the salaries required to buy the average home in town today compared to 2016.
Five years ago, the average Kelowna home was $ 650,000. The household income required to purchase this home was $ 98,000.
Today the average home price is $ 830,000, up 27 percent.
Thanks to recent federal “stress test” rules requiring buyers to qualify at higher interest rates, the household income required to buy the same home has risen to $ 143,000 – a whopping 43 percent increase in only five years.
Over the same period, the average household income in Canada rose by just over six percent, according to Statistics Canada.
“I want to retire here”
“It breaks my heart,” said Sarah Anderson. “I was born and raised here. And somehow I imagined raising my family here. I want to retire here. And that just won’t happen.”
If her family is evicted in the meantime and cannot find a place, Anderson has a replacement plan. Her parents live in a nearby town, 45 minutes away.
“It’s just not something I want to do as a 38-year-old, back in my parents’ basement … with my family,” she said.
To hear the interview with BC Housing Secretary David Eby at Daybreak South, tap the play audio button below:
Daybreak south11:37Housing Secretary David Eby on affordable housing challenges in Kelowna
The people of Kelowna are seeking answers from the provincial government because skyrocketing house prices are crowding out local residents. Housing Secretary David Eby answers. 11:37
