‘No work on the go’: Fewer home builders in Kelowna means less employment

Struggles in the home construction industry in Kelowna are impacting the city’s labour force as fewer companies are active in the market building homes, according to a local builders’ association.

Cassidy deVeer with the Canadian Home Builders’ Association Central Okanagan said normally they have roughly 370 member companies, but now it’s down to around 300.

“Some of them have just simply said they have no work on the go,” she said. “We’ve also seen a number of Alberta companies that would have a satellite office here have closed their offices here and have left town.

“And as well as a number of lighting stores, flooring stores, cabinet stores that have closed down. Unfortunately, we’re going to see a few more coming up here soon.”

Kelowna recently had a significant spike in unemployment but it has since started to improve. The unemployment rate in the city was down to 6.3 per cent in February compared to 10.4 per cent in November and 9.3 per cent in October, according to Statistics Canada.

deVeer said residential construction is a huge employer in Kelowna, and the industry’s struggles are likely fuelling unemployment.

“It varies from year to year, but we beat tourism a number of times. And I know Kelowna is really known as a tourist destination, but it’s not always our top employer,” she said.

The association’s latest data shows that construction normally employs around 10,155 people in the city, paying $756 million a year in wages.

The association tracks how home builders are feeling about the housing market, with its Housing Market Index, and deVeer said it’s a good lead indicator of how the housing market is going to look in the coming months.

“It’s basically a builder sentiment, so it ranks like what’s your sales traffic like, what’s your workload coming down the pipeline, are you hiring or laying people off,” she said.

B.C. set a new low with an index score of 7.5 out of 100.

“Sometimes by the time you get the data, it’s way too late. And so this is a leading indicator of the industry saying ‘it’s not looking really good for the summer.’ And so we need to see some changes,” deVeer said.

There are currently 1,014 single-family homes with building permits in Kelowna, meanwhile there are a total of 7,950 housing units with building permits across all housing types. There are 168 single-family homes that are expected to get occupancy permits by the end of the year.

Those numbers might not seem significant but Kelowna has seen 6,079 ownership homes constructed since 2021, halfway to the 10-year goal of 12,318 new ownership homes.

The association recently wrote a public letter to the City of Kelowna criticizing its actions that deterred single-family home construction, like focusing on infill zoning and increasing development cost charges for carriage homes.

The city responded and said that it has supported housing construction, and the increase in development cost charges was just 2.5 per cent while the cost for growth related infrastructure went up 35 per cent.

“For the record, the current building market is not unique to Kelowna, any other community in the Okanagan, British Columbia or the rest of Canada and the greatest contributors to the soft market are macroeconomic factors, not local policy,” the city wrote in its response.

While deVeer said that there are worldwide, national and provincial factors influencing the downturn in construction in Kelowna, a shrinking construction industry will spiral into bigger problems.

“Our community is powered by residential construction and if we’re going to continue to see people leaving our community because they need to go somewhere else to find work, it’s going to create further economic challenges,” she said.