5/16/2022
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The Wall St Journal
KREM
The Inlander
The Journal of Business
The Center Square
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The Wall St Journal
The shortage is caused by a combination of zoning and financing rules and supply-chain constraints.
By Suzanne P. Clark and Brian Deese May 15, 2022 3:48 pm ET
A contractor works on a home under construction in Austin, Texas, April 20.
Photo: Jordan Vonderhaar/Bloomberg News
America faces a housing shortfall. For too long, supply simply hasn’t kept up with demand or household formation. Fewer new homes were built in the decade following the 2008-09 financial crisis than in any decade since the 1960s. Estimates vary, but the U.S. needs at least 1.5 million more homes.
The shortfall of affordable housing hurts America’s businesses and the broader economy by preventing workers from living in areas with economic opportunities but high housing costs. Employers are forced to operate below their potential because they can’t attract or retain workers. One study estimated that this misallocation could cost up to 2% of gross domestic product, or more than $400 billion a year in lost economic output. Housing costs also play a major role in inflation, making up the largest component of the consumer price index.
While the two of us don’t agree on every issue, we agree that the shortfall is longstanding and must be addressed. The good news is that there are proven ways that the administration, Congress, state and local governments, and the private sector can work together to build and preserve enough homes to end the housing shortfall in America. Here are three:
First, encourage the elimination of unnecessary barriers to housing production. For decades, exclusionary zoning laws—like minimum lot sizes, mandatory parking requirements and prohibitions on multifamily housing—have inflated costs and locked families out of areas with more opportunities. This year, the administration released three funding applications for competitive grant programs totaling nearly $6 billion that reward jurisdictions for land-use policies that promote density and rural main-street revitalization. Congress and state lawmakers can encourage such reforms as well.
Second, address other constraints to the production of housing across the country, from rising material costs to labor supply challenges. Helping to alleviate supply-chain challenges and attract more workers into the building trades will help us turn the record number of housing units currently under construction into homes where Americans can live.
Third, make it easier for developers to finance new housing, especially housing that is affordable to low- and middle-income families. To start, Democrats and Republicans in Congress have supported the creation and expansion of federal tax credits—like the low-income housing tax credit and the neighborhood homes tax credit—which are projected to enable the construction or rehabilitation of nearly one million affordable homes. Congress should enact and expand these credits without delay. At the same time the administration announces changes Monday to federal financing for affordable-housing development to address key market gaps and ensure these programs work more efficiently.
While recent home price increases have created wealth and financial stability for millions of American families, for too many others, affording a place to live has become a source of stress and instability, holding back economic growth and exacerbating inflation. By addressing these issues and the regulatory barriers that impede the construction of new affordable homes, we can help bring down costs for families and speed economic growth.
Ms. Clark is president and CEO of the U.S. Chamber of Commerce. Mr. Deese is director of the White House National Economic Council.
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KREM
Spokane law enforcement and FBI execute major seizure of methamphetamine, fentanyl and guns
Approximately 35 pounds of methamphetamine, 50,000 fake pills believed to contain fentanyl and seven guns were seized.
Spokane News and Weather: May 16, 2022
SPOKANE, Wash. — Approximately 35 pounds of methamphetamine, 50,000 fake pills believed to contain fentanyl and seven guns were seized by law enforcement as part of an ongoing drug trafficking investigation.
According to Vanessa R. Waldref, U.S. Attorney for the Eastern District of Washington, this investigation was a joint effort by the Spokane DEA Task Force, Spokane Police Department Special Investigations Unit and the FBI Safe Streets Task Force.
One person has been arrested and booked for obstruction of justice. That person's identity has yet to be revealed.
Waldref commended all parties involved in the joint investigation.
“Yesterday’s seizures took a large amount of potentially lethal narcotics off the street, along with a number of guns that appear to have been connected to the drug trade,” Waldref said. “One fentanyl-laced pill can kill, so this seizure likely saved dozens, if not hundreds, of lives in the Spokane area. When it comes to investigating cases like this, it is truly a force multiplier to have DEA, FBI, Spokane PD, and our task forces working together seamlessly to seize these poison pills, protect the community, and keep Eastern Washington safe and strong. I commend and thank everyone involved in yesterday’s operation.”
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The Inlander
Rendering Courtesy of Schweitzer
The Ponderay Apartments are expected to start taking tenants by summer of 2023.
There's a similar story playing across the American West: A small, picturesque mountain town gets discovered by wealthy patrons, drawn by natural beauty and opportunities for winter recreation. Those wealthy patrons purchase second homes and short-term rentals that can be used as Airbnbs. Real estate prices skyrocket, and locals get priced out. All of a sudden, the restaurants, ski resorts and other amenities that drew those wealthy patrons can't find workers, because those workers can't afford homes.
The story is nothing new for larger mountain towns like Aspen and Vail, which have struggled with exorbitant home prices and a scarce workforce for more than a decade. But in recent years, the crunch has spread to smaller mountain communities like Bonner County in North Idaho, home of Schweitzer ski resort.
Dennison Webb, who directs a nonprofit outdoor leadership program in Bonner County, says the rising prices have had a significant impact on local families and the businesses that employ them. Webb's non-profit, Selkirk Outdoor Leadership and Education, raised wages by almost 40 percent in a single year and is still having trouble filling positions.
"More and more people are becoming aware and concerned about what's happening, because it's going to turn into Aspen," Webb says. "It's not going to be good if we don't get a handle on it."
Local leaders in Bonner County have been exploring a variety of solutions, including Culver's Crossing, a proposed affordable housing development designed specifically for locals who have been priced out of the market. In the short term, some businesses have looked to address the problem head on: If your employees can't find housing, why not just build it for them?
Ski resorts in larger towns like Aspen and Vail have been building employee housing for decades. It's only recently that rising rents have forced smaller resorts like Schweitzer to invest in employee housing as well, says Scot Auld, human resources director for Schweitzer.
Over the past two or three years, Auld says the resort has seen regular employees leave because they couldn't afford housing, and some new recruits have been forced to turn down offers because they couldn't find anywhere to live.
In 2020, Schweitzer repurposed a former assisted living facility in Sandpoint to create dormitory-style housing for 16 seasonal and full-time employees. This month, the resort announced plans for a $22 million, 84-unit apartment complex that will provide housing, a full-service daycare and other amenities for Schweitzer employees and their families.
It's a significant investment, Auld says, and a sign of the urgency of the problem.
The workforce shortage has hit other industries in Bonner County, and some businesses are looking at Schweitzer's employee housing as a potential solution.
"There's a lot of interest from other employers and recruiters in the Sandpoint area to do something similar because everybody is feeling the same pinch," Auld says.
Schweitzer's employee housing complex will be built in Ponderay, just north of Sandpoint, which serves as the gateway to Schweitzer Mountain. Steve Geiger, the mayor of Ponderay, owns a painting business that usually employs around 20 to 25 people. Even with good benefits and wages, he says the lack of affordable housing has made it difficult for him to retain workers.
Geiger owns property and has considered developing it into something he could rent to employees. But with construction materials and building costs almost three times what they were three years ago, Geiger says the idea no longer makes fiscal sense.
"It's really tough," Geiger says, "even for a guy that has property like I do."
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Geiger isn't alone in his hesitation. In a July survey administered by the City of Sandpoint, several local businesses said they had looked into buying a house to rent to employees, but were unable to because of high prices.
"We have looked into building a small apartment complex, but the cost of land, permits, impact fees and materials is too expensive," wrote one business owner.
"If we could afford a small rental complex, the company would consider purchasing one to help house employees at reasonable rates," said another.
The Bonner Community Housing Agency has been working on a variety of programs to alleviate the region's housing woes. One tool, says Executive Director Rob Hart, is the employer-directed workforce housing program, which involves meeting with employers and showing them the benefits and process of building housing to rent to employees.
It's a program he's worked on in other cities across the country, and he says it can be a huge benefit to both employers and employees.
"If employers want to be competitive," Hart says, "I think they need to have housing as one of the arrows in their quiver."
Hart acknowledges that employer-sponsored housing does have potential to complicate the relationship between bosses and employees. He brings up the company towns of the 1800s, where entire communities were owned and operated by employers, leading to poor working conditions and exploitation.
"We have to be careful [because] there is some negative history with it, but we're in a housing crisis right now," Hart says.
Auld says Schweitzer is talking with other ski resorts about the best practices for managing employer-sponsored housing.
"Anytime that employers are also involved in the housing side of people's lives, there are going to be some challenges as well," Auld says. "We know that going into this, but we also understand that it's something we have to do because of the current situation."
Hart has met with numerous local employers in North Idaho but struggled to convince them to take the plunge and start building. The main problem is a lack of land, but there are also fiscal hurdles that make many businesses hesitate.
Webb, the director of the nonprofit outdoor education program, continues to look for solutions to his employee's housing problems. His long-term vision is to buy land near his organization's headquarters and build a field campus to house staff members and students. But for an organization of his size, the costs of land and materials are still far out of reach.
Webb says he's glad Schweitzer is building housing for their employees, he just wishes it was a solution his organization could afford.
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The Journal of Business
Developers opt for fewer studios, three-bedroom units while focusing on changes in renter demographics
Erica Bullock
As new apartment complexes are rising throughout the Spokane area, some of the latest design trends include reducing the number of three-bedroom units in favor of co-living arrangements, increasing access to nature and communal spaces, and addressing storage needs, some architects here say.
Spokane-based Haines Architectural Services owner Jim Haines is involved in the design of Sherman Flats, a remodel of a 6,400-square-foot commercial building into apartments consisting of eight one-bedroom units and one two-bedroom unit, at 131 S. Sherman, in Spokane’s University District.
Sherman Flats doesn’t offer three-bedroom units, and Haines says that’s a departure he’s noticed from past apartment projects he’s worked on.
“A number of years ago, (owners) were adding in a bunch of three-bedroom units, but most recently everything is one-bedroom apartments and two-bedroom apartments and sometimes studios,” Haines says. “Most recently, they’ve kind of gotten away from doing any three-bedroom apartments.”
Haines says one reason three-bedroom apartments are on the decline is that those units have been challenging to rent out consistently.
Rex Anderson, principal at Spokane-based Fusion Architecture PLLC, concurs, and says some of his firm’s projects in the last five years have instead shifted to apartment designs aimed for tenants with roommates.
“The developers we work with have keyed in on a market sweet spot being a two-bedroom, two-bathroom apartment type that sets up well for a co-living scenario, so that each tenant has their own bedroom and bathroom, and they share common areas of the apartment,” Anderson says.
Russell Page, owner of Russell C. Page Architects PS, in Spokane Valley, currently is providing design services for Desmet Quarry 1 and 2, which are 10-building and six-building apartment complexes at 16609 and 17010 E. Desmet Court, in Spokane Valley.
The Desmet Quarry apartments offer only one-bedroom, one-bathroom units or two-bedroom, two-bathroom units, excluding both studios and three-bedroom apartments, Page says.
Michael Kiehn, an architectural draftsman at Russell C. Page Architects, says, “When we first started doing this, it was about 25% one bedroom, 50% two bedroom, and 25% three bedroom, and it’s more one and two bedrooms lately. That’s where the money’s at.”
Kiehn explains the main difference between a studio and a one-bedroom unit is a bedroom wall and door, which he estimates adds a few hundred dollars to the price of constructing a studio but also earns about $200 more in monthly rent.
Kiehn says another trend in apartment design is to incorporate outdoor areas and community spaces in apartment properties.
“With some younger people, they like to be in a little community area where they have a place to go and everyone else is going to be there and just hang out,” he says. “They seem to be more communal to me.”
He adds that some of the larger apartment developments are including trails with benches.
“They’re starting to do some cool outdoor stuff like a total outdoor kitchen and fireplaces outside,” he says.
Page adds, “Some of these are also providing little garden areas too.”
Anderson says, “When you have those denser communities, you’re compacting the development area so you can use those outdoor areas. Then what you can do is create pathways to connect with nature, like the Centennial Trail.”
Anderson has worked on the designs of a recently completed 12-unit apartment building on the South Hill and a 24-unit building on Bowdish Road, in Spokane Valley. He’s also designing a planned 150-unit complex on Flora Road, in Spokane Valley.
Page says storage has become another important trend for designers to consider.
The Desmet Quarry complexes will have garages on site that also provide additional storage space for tenants, he says.
Anderson explains that desire for storage amenities is common among an older demographic of tenants.
“They’ve accumulated a lot of stuff by a certain time in their life, and having more access to storage so they can keep their things but live in a smaller dwelling is very comforting for them,” Anderson says. “So, a lot of times, you’ll see an apartment building go up next to storage (facilities), which is a very important feature.”
Anderson says he’s also following emerging design trends regarding increased connectivity and technology features in apartments.
He says investors seem interested in impressing prospective tenants with relatively inexpensive yet impactful technological components.
“It’s things like having outlets with USB ports or incorporating an Alexa thermostat. It’s the small things that can connect to your phone via Bluetooth, whether it’s just entry to the unit itself or the controls for the unit,” Anderson says. “Those are the easy things to tick off to make tenants feel like this is a state-of-the-art place to live.”
Electric vehicle charging accessibility is another way to incorporate technology, Anderson says. “With gas prices the way they are and evolving technology with the Tesla craze … people are looking to incorporate those things to keep those day-to-day expenses as low as possible.”
Page says another emerging trend is the elimination of community laundry rooms at larger apartment complexes, as more developers have instead opted to place washers and dryers in each unit.
Page adds there likely will be more package delivery areas for residents as well.
“With 400 units, you’ve got to have room for that, so you’ll see rooms with lockers down the sides for those deliveries,” Page says.
Both Page and Haines say their apartment designs haven’t prioritized incorporating much technology within apartment units. They suggest that those features may be more important for tenants in higher-end units but less so in affordable to mid-range units.
Haines says, “Right now, there is such a demand for housing, they can build whatever they want without any amenities and still rent them, and a number of years ago, that wasn’t the case.”
"Must be nice," he says. ♦
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The Center Square
(The Center Square) – The Spokane City Council will take another look Monday at changing zoning rules to allow an emergency homeless shelter to be sited on commercial and heavy industrial properties.
Amending the code will enable the city to secure available space for a shelter. If approved, the zoning rule change will only be in effect until Nov. 25, which gives the city time to evaluate whether to make the new interim code permanent.
The council plans to revisit the zoning issue on May 16 follows last week's report that the county’s homeless population has increased by 13% over the last two years.
The Spokane Neighborhood, Housing and Human Services Department released its findings from the Point-in-Time count on May 6.
Spokesperson Brian Walker said the study found that a total of 1,757 people in Spokane County are experiencing homelessness. According to the data, 934 people were sheltered and 823 were unsheltered. The study found the shelter count saw a 6% decrease from 2021. The unsheltered count increased 52% from 2020.
The count also found that 82% of those counted this year were over the age of 25 and 48% of the adults reported having a serious mental illness. It also found that 9% of adults reported being a survivor of domestic violence.
City officials say this marks the fifth consecutive year with an overall increase in the homeless population.
Walker said this year's increase can be attributed to a change in the Point-in-Time Count methodology, the limited ability for operators of deposit and rental assistance programs to spend their budgets due to housing affordability and availability constraints and the increased cost of housing.
Spokane Mayor Nadine Woodward is seeking to get 250 people off the street - and more during extreme weather events - by negotiating a lease for a 33,000-square-foot vacant warehouse at 4320 E. Trent Avenue.
She wants to renovate the property into a facility that can provide people with an overnight stay and the opportunity to stabilize their lives.
Toward that end, Woodward said the city would partner with area service providers to provide shelter guests with opportunities to get help for mental illness and addictions. In addition, they would be provided with job training options and resources for transportation and permanent housing.
In April, Councilors Betsy Wilkerson and Karen Stratton voted against Woodward’s proposal to rezone the Trent Avenue' heavy industrial property to accommodate the shelter. They said the rezone couldn’t be supported because there were too many unanswered questions about how the facility would be used, the costs involved and whether the concerns of neighbors were being addressed.
Councilor Zack Zappone was not present at the April 18 meeting but later said that he, too, would have been a no vote.
Because the zoning change had been proposed as an emergency to get the shelter project rolling, approval required five favorable votes. Affirmative votes came from Council President Breann Beggs and Councilors Johnathan Bingle, Michael Cathcart and Lori Kinnear.
Beggs, Kinnear, Zappone, Stratton and Wilkerson then added another twist to the planning for a future homeless shelter. On April 25, they approved a requirement that the number of people it served be limited to 100 per acre
Cathcart and Bingle voted against the measure.
Cathcart reminded the council that the mayor’s staff had looked at 92 separate properties before finding one that Woodward felt would work and wasn’t in a residential area. He said it would be almost impossible to find multiple places to site shelters.