A report going to Kelowna City Council on Monday, Jan. 10, shows that it matches London, England when it comes to unaffordability.
“The proportion of renter households in Kelowna which are spending more than 30% of their gross income on rent – the standard measure of affordability on a household scale - is 47%,” the report, prepared by city staff, says.
“This is higher than both Vancouver (44%) and the provincial figure (43%). In absolute numbers, this represents more than 8,000 renter households which could be struggling or could be on the verge of homelessness every month.”
Calculating the ratio of the median house price to the median income creates a “median multiple” that is used to compare housing affordability.
“A value of 3.0 or less is considered affordable,” the report says. “Vancouver and Toronto are the highest in Canada, at 13 and 9.9, respectively. Kelowna currently sits at a median multiple of 8.6. This is the same score as London, UK, which ranks our city in the same affordability class as some of the most unaffordable major urban centres in the world.”
The report cites a recent UBC study that showed the average house price would have to be cut in half or incomes increase by $100,000 to bridge the affordability gap.
Given the high cost of buying a home that means 80% of Kelowna renters cannot afford to buy, the report says.
On top of that, more than 70% of renters are spending more than 30% of their income on rent.
“A household would need an annual before-tax income of $75,520 to keep this rent below 30% of their income, which is significantly higher than the 2021 median renter household income of $50,300,” the report says.
The stock of rental housing has increased in the past decade with 2,834 units built since 2001. That’s a dramatic increase from 547 in the previous decade but it hasn’t made those rental units any more affordable.
Read the full article HERE