Density Bonuses & CACs in Kelowna—A Plain-English Explainer
If you’ve heard “density bonus” or “CAC” and thought, “Wait… is that a tax?” — you’re not alone.
These are two ways cities can ask developers to help pay for things the community needs (like streetscape upgrades or affordable housing) in exchange for extra building rights.
This matters because it can affect:
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what gets built,
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how much it costs to build,
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and sometimes, what homes cost to buy or rent.
What is a Density Bonus?
A density bonus is a deal that goes like this:
City: “If you want to build bigger/taller than the base zoning allows, you can — but you need to give something back.”
Builder: “Okay — we’ll pay money or provide something the city wants.”
In Kelowna, the City has a formal system for putting these funds into reserves for public amenities and streetscape upgrades.
And density bonus rules show up inside Kelowna’s zoning bylaw sections (example: core area density/height rules reference bonus density options). City of Kelowna+1
What is a CAC?
CAC usually means Community Amenity Contribution.
It’s the same basic idea as a density bonus:
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A developer provides cash or amenities
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and in return the city supports extra density, height, or rezoning.
In BC, the legal framework that allows “bonus density for amenities / affordable housing” is tied to the Local Government Act rules around density benefits. bclaws.gov.bc.ca
What kinds of things can a City ask for?
Usually, it’s things like:
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streetscape upgrades (sidewalks, landscaping, street furniture)
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public space improvements
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affordable housing contributions (cash or units)
Kelowna specifically has a reserve fund bylaw for public amenities and streetscape improvements tied to density bonusing funds.
Important: Density Bonuses vs ACCs (They Are Not the Same)
BC also has Amenity Cost Charges (ACCs) — a newer tool used to fund amenities.
Here’s the key rule:
If an amenity is already covered by an ACC bylaw, the City generally can’t double-charge for that same amenity using density bonusing.
This “don’t double dip” concept is spelled out in BC guidance. Province of British Columbia
So if you’re a developer or landowner, it’s not just “how much do we pay?”
It’s also which bucket is this cost coming from?
Why does Kelowna use density bonuses?
Cities grow fast. Growth creates demand for:
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better sidewalks
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safer roads
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public spaces
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affordable housing supports
A density bonus is one way to get some of that funded without raising everyone’s property taxes (at least directly).
Also, Kelowna Council has recently signaled they want to adjust how the density bonus program works. KelownaNow
The Big Debate: Are these good or bad?
The “Pro” side (why cities like them)
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Helps pay for public improvements
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Can encourage affordable housing contributions
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Lets cities guide better design and outcomes
The “Con” side (why builders worry)
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Adds costs that can reduce project viability
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Can push some projects to “not pencil”
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Those costs may show up in pricing (land value offers, rents, or sale prices)
Real talk: If contribution amounts are too high, some projects just don’t happen — which can reduce supply.
Who should care?
If you’re a buyer
These policies can affect:
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how much new housing gets built
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what kinds of homes get prioritized (rental, condo, mixed-use)
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pricing pressure over time (if supply slows)
If you’re a homeowner
If you own property in an area where extra density is possible, this can impact:
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redevelopment value
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land assembly interest
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whether your lot is “worth more as land than as a home”
If you’re a developer / landowner
You need to understand:
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what’s “base zoning” vs “bonus density”
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what contributions are expected
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whether the numbers still work after fees and costs
Quick Answers
Is a density bonus basically a tax?
Not exactly. It’s more like a trade: extra density in exchange for money or amenities.
Do density bonuses increase housing prices?
Sometimes. If costs rise enough, they can reduce what builders can pay for land or increase required revenue to make the project work.
Are CACs and density bonuses the same thing?
They’re closely related concepts. “CAC” is a common term for community contributions tied to rezoning/density. “Density bonus” is the mechanism often used in bylaws.
My practical takeaway
If Kelowna wants more housing and better amenities, the system needs to be:
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clear,
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consistent,
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and realistic for projects to actually get built.
If the rules are too unpredictable, developers hesitate — and supply slows.
3 FAQs
1) Where does Kelowna put density bonus money?
Kelowna has a reserve fund structure for density bonusing tied to public amenities and streetscape improvements.
2) Can a City charge ACCs and density bonus for the same amenity?
BC guidance says local governments can’t use density bonus to fund amenities already covered under an ACC bylaw (no double charging for the same thing).
3) Is Kelowna changing its density bonus program?
Kelowna Council has directed staff to come back with changes to the program (recent reporting indicates updates are being explored).
For anyone in Kelowna planning to buy, sell, invest, or develop,look up:
Mark & Maddie with Selling Kelowna Real Estate Group | eXp Realty Kelowna are the clear choice.
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