The suspension of all work on a major new West Kelowna residential development is a sign of things to come in the Central Okanagan housing market, MLA Ben Stewart says.
The proponent of the Goat's Peak development, with up to 1,000 homes, says everything is shutting down on the project because of the NDP government's so-called speculation tax.
"We were about to submit a rezoning and subdivision application for the first phase of over 100 lots, with roads and services costs exceeding $8 million," Steve Henderson of Staburn Group writes in a letter to Stewart.
"We have now stopped all engineering, planning and design work, and put the whole project on the shelf until a change of government," Henderson wrote.
"Ten or 15 professionals immediately impact, (and) hundreds more person years of employment on construction (eliminated)," Henderson wrote. "(This was) the largest housing project ever in West Kelowna, stopped dead."
Suspension of Goat's Peak planning activities shows the harmful effect the so-called speculation tax is already having on the greater Kelowna economy, just a few months after being introduced in February's provincial budget, Stewart says.
"The NDP says the tax is about promoting the affordability and supply of housing," Stewart said Sunday. "Well, here we had a project with 1,000 new homes that's now been put on hold precisely because of the speculation tax."
Stewart, Liberal MLA for Kelowna West, met last Friday with more than a dozen Kelowna area developers to gauge the market impact of the tax, which applies an annual one per cent levy on unoccupied homes in Kelowna and West Kelowna that are owned by other Canadians.
"The entire market is in retreat," Stewart said. "A lot of projects are on hold, or are going to be cancelled. We're going to see a spiral of distress that's first going to affect people in construction, with framers and drywallers finding it harder and harder to find work."
Since residential construction makes up a larger share of the economy in the Central Okanagan than in Vancouver, the effects of the speculation tax will be much more pronounced here, Stewart says.
In co-operation with groups like the Urban Development Institute, the Liberals will soon mount a campaign aimed at showing what they believe will be the harmful effects of the tax across many sectors of the economy.
"If the NDP doesn't cancel the tax this fall, it certainly would be one of actions we'd take within the first 100 days when we win the next election," Stewart said.