How real estate shapes a community

By Raphael Barta
Reader Contributor

In a prior existence, I lived in Vancouver,  British Columbia, where I was a vice president for the ski resort development company Intrawest. At the time, Intrawest had just acquired Blackcomb Mountain and the Province of British Columbia was selling off about 60 acres of vacant land for an expansion of Whistler Village. 

It was a blank slate to create a community: Where should all the various types of real estate go and what should it look like? How much residential and in what formats would be justified and how much support space (retail/hotels/warehousing etc.)  would be required for the optimum mix? 

This was the company’s first time undertaking something of this scale, and the lessons we learned there were perfected in subsequent village build-outs in Tremblant, Mammoth, Squaw and other ski resorts over the next 20 years. The planning process was carefully considered, and included professionals from many disciplines: architecture, engineering, landscaping and so on. Iconic works like Christopher Alexander’s A Pattern Language became our bible. No detail of the environment we were going to build was too small. The objective was to make the completed project look and feel like it had been growing organically there for years. In the case of building out Whistler, the real estate definitely shaped the community.

My resort development background is what brought me to Sandpoint when Harbor Properties first acquired Schweitzer Mountain from the bankruptcy in 1999. Sandpoint had been established as a support base for the railroads and, for most of its existence, it was a resource extractive small town. 

As the Baby Boomers began to aggregate significant net worth in the 1970s, the second-home/vacation home trend started to take off and former mining towns like Aspen and Vail became destination resort communities. Sandpoint today is considered a destination resort community, having successfully diversified away from mining, forestry and other heavy industry. 

“Destination Resort” sounds glamorous, and it is in general a strong economic driver, but it also means that some of the housing stock is not lived in 12 months of the year. According to Bonner County Assessor Donna Gow, about 25% of Bonner County housing is second-home property. 

Destination Resort also implies a beautiful natural setting, which makes the Sandpoint area a retirement destination. Current Bonner County demographics indicate a surge in the population segment 60 years-plus. Again, this is not a bad thing, but to the extent these folks are able to out-compete the younger locals in the housing market, this tends to drive the latter group to more affordable places. 

A balanced community should have a wide range of age groups, and Bonner County is notably missing the younger segment of the population. 

Unlike the Whistler example, Sandpoint was not a blank slate for a new-build community — it evolved over time, primarily with single-family housing. And this is where we are today, with geographic constraints limiting new formats to handle the growth coming our way. 

There are very few vacant lots left in the city, and except for the former University of Idaho lands and a couple other tracts, there is not much in the way of vacant property for residential development. Outside the city boundaries, there is little support for increased densities in the rural areas. 

None of the residents and governments in Dover, Kootenai or Ponderay seem anxious to merge into one unified metro area. The city of Sandpoint has encouraged in-fill development and higher densities through programs like the accessory dwelling unit provision, and reducing the single-family lot size requirement. But there just isn’t enough housing in the lower price points to meet demand, and prices have risen by 8% to 10% for each of the past few years, to the point where the median listing price in the city is now $387,000. Meanwhile, the median household income level for Bonner County supports a price of about $265,000, so the majority of houses are being bought by in-migration. 

A healthy housing market requires entry level homes where buyers can create equity. Most Americans have their net worth in the equity built up through their homes, but as renting becomes the only option, this will have a significant effect on their wealth, their spending in the overall economy and their retirement — it is one big ripple effect. 

One possible solution to address affordability is vertical building, but Bonner County so far has not embraced high-rise projects. The proposed multi-family building at Cedar Street and Lincoln Avenue, originally proposed at three stories, has run into a storm of neighborhood criticism on a site that was zoned for multi-family and is likely an appropriate use for this property. 

That project may yet proceed in a modified form — the City Council recently referred the project back to Planning and Zoning with the request that its conditional use permit be modified to stipulate no more than two stories on the site — but sooner or later there will be residential buildings over three stories here. 

It has only been 10 years since the Great Recession, when housing played such an important role in those challenging times. It is a positive thing that home values have rebounded here, but the real estate market is now generating pressure of another sort as it shapes this community by determining our demographics. 

Raphael Barta is the president of The Idaho Realtors. He maintains an active practice in residential and commercial properties. Contact him at [email protected].