In his March, 2018 article “How Boise could keep at least keep some Downtown housing affordable,” Idaho Statesman journalist Sven Berg led off with the following statement:
“As Downtown booms, housing is more expensive than ever. Rents for newly built one-bedroom apartments are as high as $1,700. Old housing is getting more expensive, too. If this trend continues, Downtown Boise could become off-limits to all but the rich.”
The reality of the situation hits home pretty quickly when it affects family, friends and fellow business owners in Boise’s North End. These are people who work hard, contribute more to the community than most, have really good jobs and successful businesses. Those who own homes are seeing their property taxes jump year to year by as much as 25%. Those who rent are experiencing the same explosive increases in rents. None of them are seeing increases in income sufficient to offset the added expense.
Coupled with the fact Boise and the valley in general are desirable places to live, retire and invest, a slowdown in the multifamily sector and the rising costs of residential construction are preventing a stronger upturn in housing markets. Intense competition for the historically low supply of existing homes on the market has pushed up home prices faster than expected. And, as of 2018 and the new tariffs, housing construction costs are skyrocketing.
Historic trends are important to visualize what is going on. While Idaho wages and incomes are rising for some, too many citizens are not experiencing the wage growth newcomers bring to the table. 80% of Idaho renters are “burdened” by rents, according to a Harvard study cited below. And to compound the problem, new rentals are being targeted to higher income earners.
As rental prices have gone up, new home prices in Boise are soaring at a dramatic rate compared with the rest of the country, making basic home ownership even more out of reach for our median income residents.
To review “The State of the Nation’s Housing 2018” by Joint Center for Housing Studies of Harvard University, click here.
Affordable Housing Crisis Driving Poverty
Idaho’s affordable housing crisis is pretty deep. The resources available from the Department of Housing and Urban Development (HUD) and the Department of Agriculture (USDA) programs play an important role in providing affordable homes to extremely low-income (ELI) families across Idaho. Many of the publicly supported homes, however, face expiring contracts and are at risk of becoming unaffordable to the state’s lowest-income families.
According to the National Housing Preservation Association, Idaho’s shortage of affordable rental homes has reached a staggering 33,271, and 35,669 extremely low income renters (ELI) are spending more than half of their income on rent.
For more data click here (PDF)
Why has Boise’s housing become unaffordable?
Keep in mind that nationally nearly a third of U.S. households (38.1 million) paid more than 30% of their incomes for housing in 2016. More than half (20.8 million) are renters, and fully 80% of renters and 63% of owners making less than $30,000 are cost burdened. This is a national issue as well as local. But it is clear this is something we will need to deal with on a local level first and foremost.
There are many local factors beyond the simple supply and demand mantra of free market ideologues. They include taxes, inflated property values and more.
- The most common incentives for affordable housing in other states are illegal in Idaho (see list in ‘What can be done? below), whose constitution and laws emphasize private property rights.
- An explosion in rentals and single family homes are being converted into “AirBnB” and short term rentals. By one estimate nearly 900 downtown area rentals have been converted.
- Flat wages won’t allow many renters to keep up with escalating rental rates as properties change hands frequently, new owners increasing rates in order to cash flow their purchases.
- Older rental properties are being converted or replaced by new construction.
- Boise city’s infill ordinance is being abused as developers are increasing the footprint of homes to meet the demand of new, luxury homes.
There are many other factors that influence any given property, but generally these are key to the limited supply of affordable housing and rentals.
What is being done?
As of this past year, the Boise City Council has begun a long overdue conversation on housing, aimed in part at downtown and near downtown neighborhoods. Boise’s Capitol City Development Corporation (CCDC) also could play a role. CCDC has purchased a downtown building that could be torn down and replaced with a project that includes housing.
Additional Boise community initiatives are in the works. A new (2018) Boise citizen’s Facebook group named Boise Renters United has been created, and the Boise City Council has included affordable housing in the city’s Annual Action Plan for the Housing and Community Development Division, which can be accessed here (PDF).
The 2018 Boise Citizen Survey responses indicated citizens are making housing a priority. The survey revealed that citizens want an improvement in the availability of housing near desired locations and the affordability of housing; while maintaining current housing conditions. As there are many restrictions within State statute for affordable housing financing tools; the Boise Citizen Survey asked residents to indicate their level of support for a two-year property tax levy to establish an affordable housing fund. Fifty-eight percent of residents indicate that they would support the measure, and 33% would not support it. North End/Northeast Boise showed the highest level of support in the polling for a housing levy with a total positive response of 78% compared to West/Northwest Boise the low at 49%.
What can be done?
Affordable and workforce housing go hand in hand. Local initiatives are also key to the success of any program. While federal block grants, Housing and Urban Development (HUD) and Veteran’s housing programs are getting reduced, the need seems to be never ending. What we can and must do is take local control of all available resources. This means state legislation will need to be passed to reverse limitations the state currently imposes on municipalities to be creative in developing and funding programs. The following are some of the work the Idaho legislature can get done:
- Idaho fair housing law lacks ‘substantial equivalency’ with the federal fair housing law for two reasons: state law does not recognize ‘familial status’ as a protected class and the state has not granted subpoena authority to the Idaho Human Rights Commission (IHRC).
- Idaho’s local governments do not have the authority to adopt local option taxation. While local option taxation might provide a direct tool for accumulating and funding affordable housing in high- cost areas like Boise.
- Pass legislation which supports fostering cross-sector community partnerships to increase awareness of fair housing law and issues, and to encourage financial collaborations that support the costs associated with preserving and expanding Idaho’s inventory of affordable housing.
- Pass legislation to require each eligible recipient certify that housing assisted with Housing Trust Funds will comply with HTF requirements.
- And much more to strengthen low-income tenant protections, rapid or unreasonable evictions, and so on.
The Idaho Housing Association also requires adequate funding. The wait list for their Idaho Housing Choice Voucher has grown to up to 2 years in most of Idaho’s five regions serviced by the Idaho Housing and Finance Association.
The Boise office contact information is below:
Boise Rental Assistance Department
P.O. Box 7899
(565 W. Myrtle St.)
Boise, ID 83707-1899
Discussions among citizens have been going on for years about the impact of short-term rentals of the AirBnB variety. It is clear to many that their impact on quality of life, public facilities use and how they are creating one of the drivers for low inventories of affordable rental housing is an issue that needs to be addressed.
A proposal, in its infancy, would treat the rentals like hotels, requiring hosts to acquire a business license and pay a registration fee for each property fee, PLUS A 10% “transient occupancy fee,” basically a lodging tax. Currently, short-term rentals pay only the usual residential property taxes and don’t make a contribution to offset increased traffic or policing, much less the disruption they are known to cause for neighbors.
The transient fee would be paid to the city by the renter through the host. The funds generated by the Transient Fee could be directed to retiring bonds used for building affordable housing as well as expand the Boise City/Ada County Housing Choice Voucher (Section 8) program.
There are many sides to the issue. There’s the human toll that rising rental costs are taking, resistance from developers and reluctance by real estate professionals, and added to these is the reality that economic sustainability and development are being hampered by lack of affordable housing. In an April 2018 article in the Idaho Business Review titled “Panel: Affordable housing is critical to economic development.” The clear consensus is the problem has reached critical mass from Boise to Burley and beyond.
Jan Rogers, chief executive officer for Regional Economic Development for Eastern Idaho said, “When does housing become part of the strategy of economic development?” and went on to say “It needs to be.”
Boise’s Mayor Dave Bieter was blunt in his assessment of where the tools and financing will come from:
“Idaho can’t count on the federal government to help,” Bieter said. “In 1975, Boise got $5 million per year to help build housing — the equivalent of $23 million today. Now, however, Boise gets just $1.2 million a year.”
Affordable rental housing in Boise is a crisis. While some would treat this as a “big government” versus “free market” political issue, I’ve come to the conclusion it is a local economic issue on top of being a human issue. Creative solutions will need to be found, and engaging with all stakeholders must start today.
Note on Idaho Land Use Planning
Boise law firm Givens Pursley has published the “Idaho Land Use Planning Handbook”. Following is from the introduction to the guide – to view the entire 561 page guide click here.
Land use law encompasses the group of government regulations with which the property owner must comply to develop real property. The main areas of land use law are planning and zoning, subdivision regulation, and annexation. These are closely related to other topics of interest to the property owner and developer, including (1) judicial review of land use decisions, (2) eminent domain and inverse condemnation, (3) restrictions on property created by the developer’s representations, (4) regional planning and public transportation, (5) impact fees, and (6) environmental considerations in real estate development.
The purpose of this handbook is to offer a detailed discussion of the important issues in Idaho land use law in one place. To our knowledge, it is the first such comprehensive effort in Idaho.