VIDEO: Kelowna council hears why housing is so unaffordable

At a time when builders have hit the pause button on some major development projects, councillors may have wanted to ask: 'Is it our fault?'

The short answer from the Urban Development Institute is 'no'.

UDI spokesperson Mark Holland said the cost of getting building projects has risen more than developers can handle.

"It's getting to the point where it's putting many projects on hold when we need more housing, not less," he said.

"The banks won't even lend us money to do a lot of these housing projects because there's not enough profit margin."

But Holland points the finger at higher interest rates and soaring costs for materials more so than he does the costs of doing business with the city.

"I wouldn't level blame at the council," said Holland. "The cost of money has been a really key issue, the interest rates, we all feel it."

He said most of the cost of building major projects is covered with borrowed money.

"That means if the interest rate goes up it really hits the cost of actually building that building."

But while he doesn't blame the city, he does offer some advice.

"The number one thing a municipality can do is to make sure that their official community plan and the zoning accommodates many decades of growth down the line," said Holland.

"Because if someone who is trying to build housing has to compete with someone else who's building housing for the only few sites that are available, they will get into a bidding war."

Holland made the comments to KelownaNow after a special mid-morning meeting set-up, especially for his presentation.

He has praise for the city when it comes to development policies.

"I would say that the Kelowna council and staff are considered around BC to be definitely in the leader pack of what to do," said Holland.

"Working with staff here generally is considered one of the best cities to work with."

The UDI supports Kelowna's focus on infill development as opposed to sprawl.

"The question," suggests Holland, "is how long can that go on for until we really run out of land."

In the meantime, he anticipates political challenges for city councils like Kelowna's as the infill strategy plays out.

"The change to existing neighbourhoods is pretty significant and the politics of this is what council has to deal with."

The UDI's membership includes professionals and builders, and many of them were in council chambers while Holland gave a presentation focussed on the issue of affordability.