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Commercial, industrial construction takes lead in Prince George

Decline in residential permits raises fear of rising housing costs in northern B.C.’s largest city
Housing starts are slowing as non-residential permits see highest level in two years | Photo: Chung Chow

Prince George, B.C., is on pace to break 2021's record construction year, but one city councillor is concerned that new housing isn't keeping up with population growth.

While total commercial and industrial building permits saw a remarkable 1,200 per cent increase in the first half of this year, to $69.2 million, compared to a year earlier, residential permits issued fell to 78, down from 238 in the first half of 2021.

Permits for multi-family projects tallied just 12 this year, compared to 28 during the same period a year ago.

Still, the City of Prince George is on pace to issue a record value of building permits in 2022, according to a report presented to city council on July 25.

In the first six months of the year, the city issued 252 building permits worth a combined $130.66 million.

That’s up from 269 building permits, worth a combined $127.06 million, issued between Jan. 1 and June 30, 2021. In all of 2021, the City of Prince George issued a total of 467 building permits for projects worth a record-setting $247.6 million during the first half of 2020, the city issued 231 permits worth a combined $49.77 million.

However, the numbers left one city councillor wondering if new housing starts are happening fast enough to meet the increasing demand.

“In January of this year we heard that housing prices have gone up significantly in Prince George,” Coun. Garth Frizzell said.

The Canadian Mortgage and Housing Corporation’s quarterly report says that housing starts aren’t keeping pace with population growth, Frizzell added, “and that’s what is making affordability a big challenge.”

Earlier this month, the Northern Real Estate Board reported that the average sale price for a single-family home in Prince George had risen to $529,729 by the end of June. That was a $73,887 increase from June 2021 and a jump of $9,750 over the past three months.

“So costs are going up, because population is going up and the number of houses aren’t going up,” Frizzell said. “When I look at this [city building permit] report, it looks like the last two months, May and June, have been pretty status quo.”

In May and June, the city issued building permits for 18 new single-family homes, two new multi-family developments and four new mobile homes.

During the first six months of the year, the city issued a total of 52 permits for new single-family homes (down from 61 over the same period in 2021), 10 new mobile homes (down by one from January to June 2021), five new duplexes (down from seven in January to June 2021) and 12 new multi-family developments, down nearly 60% from a year earlier.

Frizzell asked city staff to weigh in on the potential for additional housing developments over the rest of the construction year.

“At this time… it would be hard for me to forecast what will happen in the next couple months,” said city director of planning and development Deanna Wasnik said. “But based on these stats, things are holding the line. We are getting a mix of housing types, so the next set of data may be able to tell us more of the story.”

While new residential developments are down from 2021, the city is seeing an increase in commercial and industrial development.

In the first six months of the year, the city has issued a total of 11 permits for new commercial buildings, worth a combined $30.37 million. That’s up from three permits worth $2.1 million in the first half of 2021 and a single permit issued in the first half of 2020, worth $950,000.

From January to June, the city has also issued 12 permits for new industrial buildings with an estimated value of nearly $28.53 million. In the first halves of 2021 and 2020, the city only issued two permits each year, worth a combined $3 million in 2021 and a combined $945,000 in 2020.

“The construction values reflect the construction of the building/structure, and do not include the cost of any mechanical equipment,” Wasnik wrote in her report to council.

Prince George Citizen and Western Investor