Report: Housing crisis remains

COEUR d’ALENE — An updated look at affordable housing in Kootenai County did not find good news.

The recently released “Next Steps” report found that the average price of a Kootenai County home rose to $665,000 this year from $256,000 in 2016 — an increase of 160%.

Relief is not on the horizon, even if the highest mortgage interest rates in more than two decades go down.

“There is no indication that Idaho housing prices will significantly decline overall once mortgage rates stabilize,” the report said.

Greta Gissel, executive director of Connect Kootenai, said the numbers in the report found, “a lot of negativity going on,” including that 80% of Kootenai County households are priced out of the market and people are leaving the area to find affordable housing.

“We’re losing money, income, salary, jobs and financial well-being because people can’t live here,” she said to about 60 members of the Hayden Chamber of Commerce during a luncheon at the Best Western Plus Coeur d’Alene Inn on Thursday.

The updated report, dated September 2023, was sponsored by Coeur d’Alene Area Economic Development Corporation, Panhandle Affordable Housing Alliance, Avista Foundation and University of Idaho’s College of Business and Economics, Vandal Impact Center.

It offered grim statistics, including that the lack of affordable housing has resulted in a loss of 5,340 jobs in the local economy; a reduction of $535 million in gross regional product; a loss of $435 million in local payroll and $28 million in total lost taxes.

It also said that about 45% of Kootenai County households can’t afford the July average market rent of $1,580.

“These families are paying more than 30% of their income for housing and some are paying more than 50%,” the report said.

Gissel said that in 2016, 75% of people who lived in Kootenai County could afford to buy a home here. Today, she said it’s less than 20%.

“That’s our crisis,” she said. “How do we solve it?”

Additional dwelling units may be at least part of the solution.

Connect Kootenai is working on a request for proposal to go out to home designers, architects and engineers to provide four ADU plan sets that are pre-approved, free, and can be submitted to a jurisdiction with minimal changes to ensure compliance with local codes.

“This will help provide housing solutions for local workers, seniors, college students, and provide multigenerational housing options, plus offer income opportunities for community members,” the report said.

Gissel said the goal is to remove barriers to make construction of ADUs easier and faster.

She found that each municipality has different ADU requirements, so the designs would be based on the most stringent, which she said is the city of Coeur d’Alene.

“These would fit within all the different jurisdictional codes,” she said.

But changes will be slow in coming.

According to the report, as of June 30 Idaho ranked 12th in the nation in terms of the highest “typical" single-family housing price at $443,638.

“This is significant because Idaho has been known for affordable housing prices,” the report said.

There are more challenges ahead, starting with construction costs, which remain high.

Prices of new single-family homes jumped 50% from January 2020 to October 2022, while the overall Consumer Price Index increased only 20%.

Kootenai County has a deficit of 4,938 units and it may be as high as 7,000 units, the report said.

“That’s what we need now,” Gissel said.

To meet the region’s projected population growth during the next 20 years, about 2,000 to 3,000 new housing units will be needed annually, the report said.

Mortgage interest rates aren’t helping.

On Thursday, the average long-term U.S. mortgage rate climbed to 7.31%, the highest in nearly 23 years.

Gissel said a family able to afford a $500,000 home at 3.18% interest can only afford a $325,500 home at 6.96% interest.

The report said an annual income of $40,993 was all that was necessary to purchase a Kootenai County 2016 median-price home of $220,000 at a mortgage rate of 3.4%.

By 2023, the median home price was $525,000 and an annual income of $94,204 was needed at an interest rate of 3.4%.

To buy a $525,000 home, based on a 7% interest rate, a family would have to make $130,000 a year, but Kootenai County’s median household income is $93,900.

Service industry workers, those in public safety like firefighters and police officers, teachers and construction workers, don’t make that kind of money, Gissel said.

“I don’t know a whole lot of people who earn $93,000,” she said.

Gissel praised chamber members for being aware of the issue.

"You are here because you’re concerned about the business community, the people in your community and serving the people of your community as business owners," she said.