Penticton lies at the heart of the Okanagan region in the south of British Columbia. The region’s temperate climate, beautiful lakes, and award-winning wineries have made it a popular tourist destination in recent years. The community of 37,000 has also seen rapid population growth in the last decade: between 2016 and 2021, the city’s population grew three times as fast as projected in its most recent Official Community Plan, in part due to an influx of remote workers during the pandemic and a growing workforce supporting the tourism industry. This growth has put pressure on the community’s housing stock, with the result that housing prices spiked by 50% in five years. 

In creating the Affordable Housing Pre-development Fund, the City of Penticton saw an opportunity to convert the tourism boom into a funding source for affordable housing. Using a portion of tax revenue from short-term rentals, the City offers seed funding and support to non-profit housing providers in the pre-development stage, ensuring their projects are feasible and competitive when applying for additional capital funding. 

The City has strong, long-standing relationships with non-profit housing providers through an existing round table called 100 More Homes Penticton. Through this forum, staff learned that many smaller non-profit housing providers not only struggle with funding in an increasingly competitive national climate for affordable housing, but often lack the experience or capacity to navigate municipal regulatory and approval processes. The program works with eligible non-profit partners to provide technical reviews of proposed projects and look at what zoning changes would be required to make them “shovel ready." Non-profit partners can then approach the other orders of government with a clear development plan backed by their municipal partners, making their funding applications more competitive.

The program pilot launched in 2024, using funds reserved from developer density bonus payments to partner with a non-profit on pre-development work for affordable housing on a city-owned site. Seeing a way to expand this approach, the City subsequently worked with the non-profit sector to map out a dozen additional opportunity sites in the community that could be developed in partnership with non-profit housing providers. In 2026, City Council made the program permanent by linking it with the Online Accommodation Platform Reserve, a pool of funds sourced from a tax on short-term rental stays within the city that is shared with destination marketing efforts. Now the City can allocate up to $100,000 every year to non-profits in the early stages of acquiring or building more non-market housing. 

The successes of the program include a 14-unit rental apartment building that was acquired and taken out of the market by a non-profit. It was then turned into affordable housing with assistance from the Provincial Rental Protection Fund. Two other projects have been approved since 2024, totalling 150 additional units in the pre-development stage: a 60-unit non-market housing development that the Penticton Pre-development Fund supported in creating architectural plans, and a reimagined historic site that will combine 88 units of mixed-income rental housing with child care and community services. 

Program funding supported design and architectural work for a proposed development on Hastings Avenue that will combine non-market housing with community services like child care. Image credit: Meiklejohn Architecture Design Studio

The program has proven to be a great way to build stronger relationships by bringing non-profits and projects through the door and into collaboration with the municipality. City staff work with applicants at early stages to make sure their ideas have legs and guide them toward feasibility. The City of Penticton understands that targeted financial support, paired with a strong, needs-based partnership, can be the difference between a project languishing and breaking ground.