A photo of a housing project in Kitamaat Village nearing completion in 2018. At their March 30 meeting (held remotely over video conference due to the COVID-19 pandemic) community planner Julia Bahen highlighted a number of areas where the District is prepared for future housing needs and others where they might need to make some long-term plans to keep up with demand. (Gerry Leibel photo)

Despite extremely high vacancy rates, rental prices on the rise in Kitimat

The District has double the provincial average of housing units in need of “major repair”

Are you having trouble finding affordable rent in Kitimat?

According to a recent housing needs assessment, you’re not alone. But it isn’t for a lack of available units, as is the case in many urban centres dealing with housing affordability crisises.

At their March 30 meeting (held remotely over video conference due to the COVID-19 pandemic) community planner Julia Bahen presented the Kitimat Housing Action Plan and Needs Assessment to council.

The assessment was required by new provincial legislation passed last April which requires local governments to collect data, analyze trends and present reports that describe current and anticipated housing needs in communities across the Province.

Bahen said as a result of the above immediacy, the assessment was one of the quickest she had ever done. However she added that didn’t mean it was insubstantial, and she began her data analysis by highlighting the fact that the total percentage of individuals in the 25-64 age group is projected to decrease over the next 10 years, while the 65-84 age group is projected to increase, something which raised a few red flags for her.

“When I see that i think about the need for accessible housing,” she said.

While Kitimat currently has a large surplus of available units for sale or rent, Bahen said one of the things that jumped out of her while completing the assessment was the physical state of many houses on the market.

Currently 12 per cent of units within the district are considered in need of major repairs, a figure that is double the provincial average. Bahen said “major repairs” refer to things like significant structural damage that would make it difficult to live day-to-day within a unit. “With older housing it’s not always accessible,” said Bahen, adding that many are unable or unwilling to take on the tasks associated with fixing up a property they might otherwise be interested in.

Overall, the District had an extreme surplus of available housing — almost 25 per cent according to the most recent data. This is down from even more atypical estimates of just under 45 per cent in 2018.

But while many would expect a surplus of units to be a good thing, Bahen said the shortage of available housing can cause big trouble for landlords and contribute to housing issues down the road.

“What that means is that landlords aren’t generating return on investments so the issue is that housing may fall into a state of disrepair,” she said. “In addition to that you’re seeing the [housing availability] go up and then drop so significantly and here you have the relationship that Kitimat has with industry.”

In terms of affordable housing in Kitimat, Bahen pointed out that the District was full of seemingly-contradictary data sets. While typically a high vacancy rate would lower rental prices and create a “buyers market”, this has not happened.

“Rental prices don’t actually seem to be totally [correlated] to vacancy,” she explained. “So typically when you have a pretty high vacancy rate, which, 24 per cent would be extremely high, the rental prices would be falling. Here you see that they are increasing.”

READ MORE: House prices soar in Kitimat, Terrace

According to data from Big River Analytics, which was contracted by local industry to analyze rental trends, the average rental price for a unit in Kitimat was just under $2,000 a month in Janaury 2020. This is the average price of all available units within the District. “That relationship is really unique, to see a rental vacancy rate that’s increasing at the same time that rental prices are increasing, it doesn’t really correllate,” said Bahen. She added that while it’s unclear what is causing the inconsistency, people involved with the assessment believe it might have to do with landlords withholding units in anticipation of future rental conditions.

“From the consultation that we’ve been able to do it seems that it may be indicative of some speculation of units being withheld with the idea that they may be able to get higher rents in the future.”

Housing prices within the region peaked in 2014 and then declined steadily until 2017. The last available dataset shows them on the rise again, with the price of the average house in the district increasing to just under $300,000 in 2018.

In concluding her presentation, Bahen discussed future demographic shifts and said it looks as though Kitimat will be able to handle future population growth. However she also added the caveat that things like an aging population of buildings is something the District needs to address over future years, as well as looking into smaller units for an aging population.

The housing study highlighted a number of priority groups that may be at risk of having challenges securing housing. These include seniors, low-income households, young families, persons with physical disabilities, new permanent residents, Indigenous househols and vulnerable residents.

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