Exclusionary Zoning vs. Missing Middle Housing: Kelowna's Housing Challenge

Exclusionary Zoning vs. Missing Middle Housing: Kelowna's Housing Challenge
May 16, 2024

The housing market in Kelowna, like many cities in British Columbia, is facing a critical issue: a lack of variety in housing options. Single-family homes have dominated the landscape for decades, but this zoning practice, known as exclusionary zoning, is increasingly seen as a barrier to affordability and a missed opportunity for creating vibrant communities. Let's delve deeper into what exclusionary zoning is and how it impacts Kelowna's real estate market, equipping you and your real estate agent to make informed decisions.

What is Exclusionary Zoning?

Exclusionary zoning refers to zoning laws that limit the types of housing that can be built in a particular area. Typically, these laws favor single-family homes and restrict the development of multi-unit dwellings like condos, townhouses, or duplexes. While originally intended to create a certain character in a neighborhood, the unintended consequence has been a shortage of affordable and accessible housing options. Studies by the Canadian Centre for Policy Alternatives have found that exclusionary zoning can inflate single-family home prices by 10-40%, making homeownership increasingly out of reach for middle-income earners and young families.

The Impact on Kelowna's Market

Kelowna's real estate market has seen a dramatic rise in property values. The average single-family home price in Kelowna reached a staggering $1.2 Million+ in April 2024, according to the Canadian Real Estate Association, a significant increase from $871,000 just two years prior. Experts point to the limited supply of housing, particularly for young families, middle-income earners, and those seeking a more walkable lifestyle, as a key factor driving up prices. This lack of variety creates a bottleneck, pushing up prices for single-family homes and making them increasingly out of reach for many residents.

How Can You Help Your Clients?

Exclusionary zoning presents a unique challenge in Kelowna's real estate market. Here's how you can be a valuable asset to your clients:

  • Sharpen Your Needs Assessment: Don't just focus on the number of bedrooms and bathrooms. Dig deeper to understand your client's lifestyle goals. Are they seeking a walkable community with easy access to amenities? Is proximity to schools a priority for a young family? By understanding their priorities, you can creatively search within the limitations of exclusionary zoning. Consider exploring areas with good access to public transportation, which can offer more flexibility in terms of housing type.
  • Become a Zoning Resource: Stay up-to-date on zoning regulations and any proposed changes that could impact your clients' buying or selling decisions. Explore areas where zoning changes might allow for future development of multi-unit dwellings and keep your clients informed about these possibilities. Partnering with a local lawyer specializing in real estate law can be an asset for navigating complex zoning issues.
  • Think Outside the Box:  Limited by single-family zoning? Explore alternative options. Could a laneway house on a single-family property be a suitable solution for a client seeking more space?  Are there areas with potential for redevelopment, where a multi-unit dwelling might be an option in the future? Get creative and present your clients with a variety of possibilities.

The Future of Zoning in Kelowna

The BC government has taken steps to address exclusionary zoning by introducing Bill 48, the Building Futures Act, in November 2023. This legislation encourages municipalities to allow for more diverse housing options on single-family lots, including duplexes, triplexes, and laneway houses. Kelowna itself has implemented zoning changes in some areas to permit townhouses and duplexes. While these changes are a positive step, navigating the new landscape and understanding the potential impact on specific properties requires a knowledgeable real estate professional.

Beyond Single-Family Homes

The limitations of exclusionary zoning extend beyond affordability. It can also restrict the development of walkable, mixed-use communities that offer residents a variety of housing options alongside shops, restaurants, and green spaces. With a growing population of over 220,000, Kelowna needs a housing market that reflects the diverse needs of its residents. By understanding exclusionary zoning and working with a knowledgeable real estate agent, you can navigate the current market and make informed decisions about your real estate future in Kelowna.


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