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Nelson needs 3,000 homes by 2040: report

Housing report sparked discussion of urban growth at council table
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An apartment building under construction on Vernon Street in Nelson. A new housing report says a minimum household income of $150,000 per year is required to purchase a home in Nelson.

Over the next two decades Nelson will need 3,104 new homes, according to a new housing analysis.

These will be needed to meet current shortages and respond to increasing population, which is expected to grow to 15,470 residents by 2041. The population of Nelson in the 2021 census was 11,106.

The 100-page City of Nelson Housing Needs Report, containing statistics and projections on population, housing costs, housing supply and housing demand was presented to Nelson City Council on Oct. 8.

The purpose of the report is to help the city plan for its housing future. But the presentation caused some councillors to question whether Nelson has the land or the desire to grow as much as the report envisions.

"I'm worried about quality of the town, the livability of the town, as we pursue the black hole of demand," said Councillor Jesse Woodward.

The report presents detailed information on population and housing including:

• A minimum household income of $150,000 per year is required to purchase a home in Nelson. In 2021, only about 15 per cent of Nelson households met that income threshold. The median household in Nelson was $72,500 before taxes.

• The median single-detached house sold for approximately $700,000 in Nelson in 2022. This represents a 36 per cent increase over the period between 2019 and 2022.

• The median cost of an apartment rental rose by 22 per cent in Nelson between 2020 and 2023, a 50 per cent greater increase than between 2017 and 2020.

• About 19 per cent of Nelson, or 955 households, earn a “very low income” or “low income.” These households can afford at most a monthly mortgage or rent of $680. The median rent for an apartment in Nelson in 2023 was $1,025 per month.

Affordability and availability

Provincial legislation requires municipalities to write a housing needs report every five years, following a prescribed format. Municipalities must incorporate their five- and 20-year housing needs into their Official Community Plans and zoning bylaws.

Nelson's 2024 report was prepared by M’akola Development Services, a Victoria-based housing consultant specializing in affordable multi-family housing. The cost of producing the report was covered by the provincial government. M'akola's Sandy Mackay and Jenna Hildebrand presented the report to council.

Hildebrand told council that lack of housing directly affects local businesses.

"We've seen that local businesses and employers are consistently citing that housing availability and affordability are barriers to being able to retain and recruit new staff."

Hildebrand explained that the need for housing is especially acute among single people, single parents, Indigenous households, transgender or non-binary people, and low-income households.

"If you look at income categories, very low income, low income and moderate income make up a large portion of the community in Nelson, and they are not able to find affordable rental housing."

Mackay said housing demand is influenced by population growth, but is also driven by "factors outside of local government control including economic opportunities, available services, infrastructure, transportation, natural disasters, federal and provincial policy, and education opportunities."

Housing growth in Nelson can be accommodated by "denser, more compact, larger scale projects," the report states.

Councillors' questions

Councillor Rik Logtenberg asked if Nelson's small land base was taken into account in M'akola's projections, and whether there will be any limit to the increasing housing demand.

"What if we build 3,000 units and then the demand is unchanged?" he asked.

Mackay said Nelson's limited land base was not included, and that the city has to work within the realities of its land base and its zoning, as well as its decisions about density.

He said the housing situation in Nelson contains a lot of good news, and he cited the city's partnerships with Nelson CARES, SHARE Nelson, the Nelson and District Chamber of Commerce, and Selkirk College in providing land and support for several housing projects.

"Those are the types of projects that you should be celebrating and taking as huge wins," Mackay said. "Many, many other communities in our province are not as equipped to deal with housing needs and to deal with potential growth as Nelson is."

Woodward said he worries that demand will continue to grow and Nelson will never reach it, resulting in an "infinite struggle" to meet the demand.

"People want to move here because it is desirable," he said, "but if we just pack it to the gills, is this pursuit of housing trumping everything else, including the fabric of the community?"

Mackay said residents of many municipalities are worried about protecting their community in the face of growth.

"The challenge is that we can't really control growth, especially at the local level," he said. "Growth is driven by things like macroeconomic policy and job opportunity and access to education and, yes, housing costs."

Natalie Andrijancic, the city's director of development services, said it would be theoretically possible to add 6,000 new housing units in Nelson if all lots were built to maximum allowable density, and she added that that there are several large vacant pieces of property in the city.

Mackay said some small B.C. communities are not expected to grow at all, and that some of those communities might be envious of Nelson. As communities age but do not grow, he said, services and younger people leave the community that then loses its vibrancy.

As the population ages, Mackay said, new working-age households and families will be critical to maintaining Nelson’s economic and social energy.

"Growth doesn't have to be about preparing for new people. In many cases, it is about building homes to protect and preserve the families that live in Nelson already. So I think of it as trying to ride the wave and get as much benefit as possible from it, and benefit from that increased tax base."

He said the Official Community Plan should be written to preserve the housing values that are important to the community.

Councillor Leslie Payne said there should be a regional approach, and Andrijancic said the city is working with the Regional District of Central Kootenay on this.

Councillor Kate Tait asked if there is any evidence that increased housing volume contributes to affordability.

Mackay said affordability does not necessarily improve when there are more units on the market, and he said this is a complex subject with many factors. But when below-market housing is brought into the mix, he said, the market units have to compete with them and this can bring market prices down.

Council voted to accept the report and to account for the 20-year anticipated demand projections when updating the Official Community Plan.



Bill Metcalfe

About the Author: Bill Metcalfe

I have lived in Nelson since 1994 and worked as a reporter at the Nelson Star since 2015.
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