Dark storm may be brewing during boom times for city
Kelowna dealing with high unemployment, skills gap, housing unaffordability
It’s easy to get caught up in Kelowna cheerleading. After all, the city is booming. Kelowna is the fastest growing metropolitan area in the province with a population of almost 200,000. The real estate market is hot. High technology is the new star industry. And sectors from construction, tourism and manufacturing to wine, agriculture and retail-wholesale are all growing.
But there could also be a storm brewing in the form of a confounding high unemployment-labour shortage scenario, housing unaffordability, infrastructure stress and a softwood crisis.
“Certainly, Kelowna has so many positives,” said Central Okanagan Economic Development Commission director Corie Griffiths, one of the panelists at the Future of the Okanagan lunch Friday at the Coast Capri Hotel.
The event was put on by the Okanagan chapter of the Urban Development Institute, the group representing the commercial, residential and institutional construction sectors in the Valley. “But, there is a dark side,” added Griffiths. “Long-term it’s going to be hard for our infrastructure to stand up to 1.6 per cent annual population growth. And our 7.8 per cent unemployment rate is concerning. Although I don’t know exactly how that number is calculated because there are 157,300 people working in Kelowna, which is 2,500 more than a year ago.”
Yet, amid high unemployment, there’s a looming labour shortage, especially in trades and high-tech.
That means there’s a skills gap in the city where there are people unemployed, yet jobs going unfilled because those available don’t have the right qualifications or experience.
Homes are selling, renting and being built at record pace, which is good for the economy. But it has also pushed the average selling price of a single-family home in the city to a peak of $638,000, which is unaffordable for many.
The rental vacancy rate for apartments is an ultra-tight 0.5 per cent and rents are at an all-time average high of $1,000 a month for a one-bedroom unit and $1,450 for a two-bedroom suite.
“The unemployment rate in Kelowna isn’t as low as we’d like to see it,” said KelownaMission MLA Steve Thomson, one of the other panelists.
“But when you travel around and visit businesses you get a sense everything is going very well. Economic growth and opportunity is good in the Okanagan and we’re building a diverse economic base and balanced economy.”
The provincial government has taken several steps to help make housing more affordable.
The B.C. Home Partnership program provides repayment and interest delayed loans for first-time home buyers to come up with a downpayment.
Many can now save on the property transfer tax and there’s subsidy and housing assistance for lower-income earners.
Thomson is also minister of forests, and his highest priority with that portfolio is settling a softwood lumber deal with the U.S.
U.S. President Donald Trump is talking tough about trade, especially lumber, and that could affect B.C. producers — who export 60 per cent of the province’s softwood output to the U.S.
“We have to protect ourselves from litigation and make the U.S. see that it needs our wood to feed its booming home building and keep its construction affordable,” said Thomson.
While streets, highways, hospitals, bridges, schools and water systems may be strained with the area’s growth, Kelowna-Lake Country MLA Norm Letnick, the third panelist, said infrastructure funding is flowing in the Okanagan to keep up.
He cited Highway 97 widening and money for UBC Okanagan, Okanagan College, Kelowna General Hospital, schools, roads and water as examples.
In total, there are 13,579 businesses in the Central Okanagan, and 88 per cent of them have less than 20 employees. As such, small business and entrepreneurism are the backbone of the local economy.
If the metropolitan area’s 1.6 per cent annual growth continues, the population will balloon from 200,000 to 235,000 by 2025.