Ask people about the on-the-ground, real world problems hitting them hard, in Idaho and nationally, and you won’t need long before you hear about affordable housing.
The widening gap between what housing - owned or rented - costs and what most people can afford is growing almost beyond belief. In theory, the marketplace should cover that: Broadly, what people can afford to pay ought to match up, roughly at least, with what’s being charged. But when the median price of a for-sale house in Boise is $523,250, the question should arise: How many people can afford to buy? And if they can’t, where will they live? Rentals, as you no doubt know, are in no better situation: The median price there is $1,303 a month.
The reasons for this are many and complex, and limited supply is only one cause. (Speculation and commodification in real estate are among the other issues, which I’ll come back to in a few weeks.) There’s no one-shot solution. But useful patches to help and improve the situation can be found, some of them in the area of state government.
In Idaho’s case, that’s a sort-of, because the Idaho Housing and Finance Association has some public aspects (the governor appoints its governing board, for example) and some private (it gets no money from the state, though it does from the federal government). It describes what it does this way: “Idaho Housing’s mission is to provide funding for affordable housing opportunities in Idaho communities where they are most needed and when it is economically feasible.â€
Finding money to actually get that done is another matter. The association does provide help, for homebuyers and developers, where it can. But Idaho’s resources are more limited than those of almost all other states. Nearly all states have housing trust funds, but unlike Idaho, nearly all of them have put money in. As one national group reports, “State housing trust funds collected in excess of $1.6 billion in 2020 to advance affordable housing initiatives in their states. The most common revenue sources collected by state housing trust funds are the real estate transfer tax and the documentary stamp tax - used by twelve states and the District of Columbia.†Idaho’s trust fund is empty.
A report last week in the Idaho Capital Sun about a new relatively affordable Boise rental development outlined the patchwork of resources needed to make it happen. It’s a complex patchwork unlikely to be easily replicated very often.
Cory Phelps, a vice president at IHFA, was quoted as saying, “If a developer is looking to build affordable housing, they’ll probably look to where there’s more resources. We are getting a little more interest (from developers), but if you’re a developer and Oregon has all these resources, it just makes it easier for you to make the deal work. The more resources you have, the more housing you’re going to be able to build. It’s all about finding all of the necessary financial components to cover the cost of the project.â€
The article then noted, “Oregon has a robust list of grants and tax credits available for affordable housing, along with a long list of more than 2,700 developments by county.â€
Idaho could do this. Housing finance is an area where a relatively small outlay can have an enormous impact and directly improve the lives of many thousands of Idahoans. The state now has a massive revenue surplus, and relatively small payments - which could be used as leverage - together with some changes in property tax law could make a big difference.
But the whole subject was essentially ignored at the last legislative session. The Sun reported that the governor’s office is looking into it, but also quoted one Boise developer as saying, “The Idaho Legislature has a very ill-advised — and so far as I know, unique among the 50 states — view of how affordable housing should be for tax purposes.â€
It doesn’t have to be that way in 2022 (though the odds are it will). But legislators who do take it seriously will find, not a complete solution for their constituents, but a significant help.