Rathdrum rising

The state of the Rathdrum community is bright.

But a labor shortage could slow growth.

“Migration is what’s powering the economic growth of Rathdrum and the entire Kootenai County,” Idaho Department of Labor economist Sam Wolkenhauer said at the Rathdrum Area Chamber of Commerce annual community luncheon Thursday afternoon.

The event at the Shepherd of the Hills Lutheran Church sold out, with over 150 community members in attendance. Wolkenhauer shared the stage with key leaders from Rathdrum and Kootenai County, including Rathdrum city administrator Leon Duce, Kootenai County Commissioner Chris Fillios, Idaho Transportation Department engineering manager Marvin Fenn, and Lakeland School District superintendent Dr. Becky Meyer.

“We have to understand that it is migration that is driving our population growth, so as the good commissioner [Fillios] said, the population here in Kootenai County is growing at about 2.5%,” Wolkenhauer said. “The population of the United States on a whole is only growing at about half a percentage point per year. Relatively speaking we are growing much much faster than the rest of the country.”

Wolkenhauer asked the audience to pause and consider the community without migration.

“So just imagine we had built an enormous wall around Kootenai County in 2001 and no one would be able to come in,” Wolkenhauer said. “Instead of 80% growth in that 65 and older age group, you’d only have 36% percent growth. That would all come from residents aging in place so to speak.”

The 40-64 age group would have shrunk by 1% instead of growing by 31%. The 15-39 age group would have grown by only 5% instead of 30%, while the under age 15 group would have grown by 2% instead of 15%.

“What’s important to understand is even though retirees form the largest group of new residents moving here, migration is actually really helping with our labor force,” Wolkenhauer said.

But the county has a big problem: affordable housing.

“We have to understand that last year the price to income ratio housing in Kootenai County was double, historically, what it has been in the United States,” Wolkenhauer said. “We certainly cannot look at this and then dismiss anyone’s concerns of the price of housing. It is a very valid concern that is born out in the data.”

The housing crisis is proving difficult to rectify for two main reasons. New residents moving into Kootenai County from very expensive metropolitan areas like King County in Washington, and Los Angeles, Orange, and Riverside counties in California, have equity in expensive markets.

These residents are able to pay cash for real estate in North Idaho. Some Realtors have encouraged sellers in the last few years to accept only cash offers instead of financed offers on their homes.

“The other reason it is proving difficult to reduce the price of housing is that we have a bottleneck of construction labor and a lack of availability of lumber,” Wolkenhauer said. “So there’s a supply side issue of bringing new housing online.”

The labor shortage is the biggest issue facing the construction industry.

“You have a shortage of labor to bring new housing online and you have no shortage of cash rich buyers who want to get a little piece of the lake and get a little piece of what to them is very little traffic congestion,” he said. “This is the essential story that we have here in North Idaho.”

Wolkenhauer encouraged the audience to be optimistic. He said people often fear the next recession, but the current economic situation is phenomenal.

“We have been one of the fastest-growing counties in the fastest-growing state in the country,” Wolkenhauer said. “For the last six years, Idaho has either been the fastest- or second-fastest growing state in terms of jobs every year.”

The question of how to govern and tackle issues of education and traffic during such growth was handled by the other speakers.

Kootenai County is the third- or fifth-fastest growing county in the country. That growth presents unique challenges to the county government, Fillios said. The budget for this fiscal year 2020 is the county’s first $100 million budget at $101.6 million.

“People look at that and say you’re killing us,” Fillios said. “No, we’re not. Let me explain how that works very simply. You’re actually being taxed on $49 million, not on $101, the difference is grants and fees. So on the $49 million, that’s about a $1.4 million dollar increase.”

That amounts to the 3% tax increase allowed per year to the county as a taxing authority. The total assessed property values in the county right now amount to just under $20 billion, according to Fillios.

“The reason some people experience an increase in taxes is largely do to evaluations,” Fillios said. “Some people actually experienced a decrease.”

Twenty percent of the county is reevaluated every year, so the entire county is reevaluated every five years. If a taxpayer’s home wasn’t evaluated this year, it isn’t likely they will see an increase in county taxes.

The commissioners have legislative, administrative, and quasi-judicial power. They can pass laws, organize the structure of the county, and take testimony for zone changes, among other responsibilities. Fillios and Commissioner Bill Brooks are running for reelection this year.

“We touch people's lives each and every day with the decisions we make,” Fillios said.

Marvin Fenn highlighted how people move throughout the county, presenting the key Idaho Transportation Department highway, road, and bridge projects surrounding Rathdrum.

He encouraged public involvement in the public hearings for the I-90, Highway 41 interchange. The three-year project will cost an estimated $120 million.

ITD plans to expand SH-53 to three lanes.

Dr. Becky Meyer presented the audience with outstanding statics from Lakeland School District’s work.

“What makes good communities?” Meyer asked the audience. “Why is our future bright? Because of our schools. We are the top district in the state and I’m going to give you some reasons why.”

The district has the second-largest bus route in the state, serving over 3,100 miles and making good use of Fenn’s work at ITD.

Lakeland has one of the highest graduation rates in the state at 92.2%. Their alternative high school, Mountain View, has the highest graduation rate of any alternative school in the state at nearly 75%.

“I want you to know that your tax dollars are going to good use,” Meyer said. “Your return on investment, which is what you talk about in business, is really coming back. I feel you are really getting good value for the money you are putting in.”

The event ended with Wolkenhauer’s economic summary of Rathdrum and Kootenai County.

“We think this growth will continue with that little asterisk that there really is a shortage of labor that’s going to start to slow it down, but other than that we think that the economic future, at least, is very bright — see how I tied that back to the theme?” Wolkenhauer said, to the audience’s delight.