'We are so far behind': Panel outlines need, solutions to lack of housing in Pacific Northwest
LAURA GUIDO
July 24, 2023
A row of homes in a development off of Parkcenter Boulevard in Boise.
BOISE — A lack of housing doesn’t just affect low- or middle-income families in a community; it can touch just about every aspect of an economy.
The widespread impact of a lack of workforce housing was a central message from a panel of experts who spoke on July 18 at the Pacific Northwest Economic Region annual Summit in Boise about the need, the challenges and possible solutions.
“(Washington state) surveyed professional economic development people, and they said the No. 1 barrier to quality economic growth was the absence of access to housing,” Washington state Lt. Gov. Denny Heck said.
Heck was joined by Idaho Sen. Ali Rabe, who’s also executive director at the emergency housing nonprofit Jesse Tree; Coeur d’Alene Area Economic Development Corporation CEO Gynii Gilliam; Katie Vila, chief operating officer of the Boise developer Roundhouse; and Steven Peterson, University of Idaho associate clinical professor of economics.
CHALLENGES The nation is facing a shortage of all housing types, workforce and affordable housing in particular, and Idaho is no exception.
“We are so far behind,” Rabe said of the state’s housing supply.
Jesse Tree focuses on providing emergency relief for those facing eviction or homelessness, and she sees the direct impact of a lack of affordable options.
The lack of affordable housing is fueling an increase in homelessness, which is a far more expensive problem to solve, she said. It costs about $2,000 annually to keep someone in crisis in their home, Rabe said, but each person who is homeless costs Ada County approximately $53,000 per year.
“It’s a very challenging situation to be in because we are having to dump so many resources into this crisis response, but at the same time we need affordability and we need to build for the future,” she said.
The shortage is largely still a result of the 2008 economic recession, said Peterson, an economist with UI. Construction on new residential units collapsed over the past decade, and although demand picked back up in 2016, there wasn’t the supply to support it, he said.
There are also factors related to worldwide supply chain disruptions for building materials, labor shortages, the increased prevalence of telecommuting and population growth from intra- and interstate migration.
From 2010 to 2020, Idaho was the second-fastest-growing state in the nation, and from October 2020 to October 2021, Idaho and Arizona had the fastest-growing home prices in the U.S., he said.
Idaho’s home prices did decline between the last quarter of 2022 and first of 2023, but prices remain high, he said.
The ability to develop homes at a reasonable price-point is becoming more and more difficult, said Vila, the COO of Roundhouse.
“Developers are having a really hard time” making the finances work for new housing, Vila said.
These costs are driven by hard construction costs, such as labor and materials. Local policies also impact costs, such as requirements for additional retail space, energy efficiency, lower density and parking.
For those who make less than the area median income, Vila said she believes it’s necessary that the government step in and provide support for housing. For those who earn the median income and above, she said the market is likely able to “work itself out.”
Other factors such as the cascading effects of past racially restrictive housing covenants and demographic changes have a profound effect on homeownership, Heck said.
This year, the Washington Legislature passed a bill that sets aside money to help people who were hurt by racist covenants, which were used to enforce segregation. Owning a home is typically a fundamental way most families can build wealth, and not owning a home has had lasting effects on the families impacted by these past covenants, Heck said.
The covenants are an “intergenerational dividend that keeps on giving,” he said.
Demographics are also playing a role, as baby boomers retire, many seek to downsize and are bidding against would-be first-time homebuyers who can’t compete financially.
POSSIBLE SOLUTIONS The federal government in the last few years made historic investments in housing and rental assistance, Rabe said. Idaho used some of that federal assistance in 2022 to put $50 million toward a workforce housing fund, the Idaho Press previously reported.
However, many of the federal programs, which were implemented in response to the pandemic, are ending. She said it’s up to state and local governments to keep some of the programs running.
Rabe said creating financial incentives for affordable housing developments, reducing parking requirements, reducing or waiving impact fees for housing designed for households earning below area median income and bolstering the state tenant protections are all ways state and local government could address the issue.
Vila said policies that reduce the costs of construction will help keep market-rate costs lower. She also noted that policies such as higher minimum wages can help ensure that more people stay housed.
Heck discussed other investments and changes the Washington Legislature recently made into housing, such as allowing more duplexes and quadplexes in more zones in some of the state’s jurisdictions.
He said all of the more than 20 bills passed related to housing were bipartisan and that it’s possible and necessary to address the issues by creating coalitions.
“I know it because we did it,” Heck said.
Reducing regulatory barriers can also help keep costs lower, Peterson said.
A report UI did on housing issues in Kootenai County found that increasing density, such as by annexing appropriate areas for growth, will help ease the issue and that the character of communities can be preserved while providing affordable housing.
A lack of housing supply and density can actually disrupt rural character, Peterson said, although this is contrary to what many believe. A lack of density can lead to more sprawl and reduced open spaces.
ATTITUDE SHIFT AND NIMBYISM Each of the panelists agreed that attitudes about growth and density will need to shift to be able to fully address the housing shortage. Peterson said he found in his report that local attitudes about housing developments are the biggest impediment to growth.
“We are the problem,” he said. “We are also the solution.”
Heck noted that adding multifamily housing does not decrease property values and usually has the opposite effect.
“You can count on municipalities opposing this,” Heck said of trying to add more multi-family units. “I don’t blame them. Their job is to create local zoning and they just kind of organically oppose anything that takes away or modifies any of their authority, any of us would. The problem is they’re wrong.”
Cities and counties have little control over how many people migrate to their communities, Peterson said, and a lack of supply is sometimes driven by the myth that restricting supply will also diminish demand.
This can mean that non-local homebuyers, who usually have more money than residents, will be able to out-bid the residents on the fewer available homes.
“If you try to restrict supply, what you’re actually restricting is the local population actually being able to afford a house,” he said.
He said even as a resident of his community in Moscow, he can’t think of any single housing project that wasn’t met with opposition.
Rabe said local policy changes can help combat NIMBYs, which stands for Not in My Backyard. In the Treasure Valley, most change, such as the Boise zoning code update, is supported by grass-roots efforts and including more locals who work with lower-income populations in the meetings and discussion.
“People need to realize that we have two choices,” she said, “do we create more affordable housing or do we have our neighbors sleeping on the sidewalk?”