‘Off the charts’

By Zach Hagadone
Reader Staff

Sandpoint City Council members gathered with Planning and Zoning commissioners for a joint workshop July 12, during which they parsed through an in-depth report from Portland, Ore.-based Leland Consulting that drilled into some of the most pressing issues facing not only Sandpoint, but Bonner County as a whole.

The study, commissioned by the council in late December 2021 and conducted throughout spring 2022, analyzed area land use, economics, population and housing demand, while providing projections and policy recommendations intended to inform a number of City Hall initiatives, including the Comprehensive Plan update and amendment to rezone applications, as well as Mayor Shelby Rognstad’s affordable housing task force. 

Leland consultants combed through publicly available data, including real estate and census figures, as well as toured the community and met with local employers, developers and other stakeholders to inform the report.

A graph showing the sharp increase in aggregate yearly household income due to net migration in Bonner County, which rose from $44 million in 2019 to a whopping $155 million in 2020. Source for data: Internal Revenue Service. Graph courtesy Leland Consulting Group.

Company President Chris Zahas, who attended the joint workshop via Zoom alongside Leland Senior Associate Ted Kamp, told the assembled city leaders that, “What you hear on the street and what you hear anecdotally is true.”

In broad strokes, that means Sandpoint and surrounds have experienced a high level of growth over the past few years; the vast majority of that growth has come from wealthy, increasingly older newcomers; and they are driving up home values to a point that lower-income residents and many workers are being forced out.

“Recent net migration has seen a cycling out of lower-income residents and an influx of higher-income movers,” according to consultants.

What’s more, the report stated, there were 3,769 births in Bonner County between 2010 and 2019 but 3,902 deaths.

“More people are dying than are being born in the county,” Zahas said, underscoring that population growth has come entirely from net in-migration to the county.

Looking closer at the numbers, Leland found that the average income for in-migrants is in the $91,000 range, while those leaving the community earn an average of almost $53,000. Meanwhile, the annual household income aggregated from net in-migration has represented a cumulative $300 million in new income flowing into the county since 2019. 

Kamp added that those figures are drawn from 2020, which means “we expect it’s even worse than that. … It could be an even bigger discrepancy between the in-migrant and out-migrant incomes.”

That enormous wealth gap has contributed to a dramatic spike in home prices, rising from a median that fluctuated between $300,000 to $400,000 from 2018 to 2020, but which skyrocketed to $675,000 in Sandpoint and $700,000 in the county by 2022. The national median home price has also risen, but only from about $300,000 to just over $400,000 during the same period. 

Looking at June 2022 alone, Leland found the largest number of for-sale home listings in the county were in the $1.5 million to $2 million range, followed by those priced between $600,000 and $699,000. There were no listings under $300,000. 

As noted in the report, despite the influx of well-heeled new residents, the county median income remains around $55,000 per year, “meaning that almost all listed homes in Bonner County are priced well above the range of affordable to a median income household in the county.” 

Even more dramatic, Leland wrote that June 2022 prices put the median asking price for a single family home 14.6 times higher than the median household income. In Kootenai County, median home prices are 10.3 times higher than household income and in Spokane County they are 7.7 times higher, which is more in line with national data.

Almost 50% of the households in the county are renters — much higher than the national average — and those renters are typically paying almost $2,300 for an average three-bedroom, 1,430-square-foot dwelling. 

At the same time, the median age in Bonner County rose from 44.2 in 2009 to 47.9 in 2021. In North Idaho, by far the biggest population growth by age group between 2021 and 2029 is estimated to be in the 70-and-older age bracket.

All of these indicators point not only to a dire need for more housing in the “affordable” category, but the types of dwelling units and utilities and infrastructure needed to serve them. 

The Leland report estimated that Sandpoint will need between 1,500 and 1,900 units of housing over the next decade, as well as between 300,000 and 500,000 square feet of “employment space” for commercial, industrial and other job-related uses.

There are 240 housing units already underway, including 190 units of multifamily and 50 single-family dwellings. At the same time, 560 units of housing are seeking rezones with the Planning and Zoning Commission and City Council — about 90% of which is multifamily — and, on top of that, there are 860 housing units in the early stages of preliminary or final platting prior to official hearings, consisting of 493 multifamily and 367 single-family units.

In total, there are 1,660 units at some stage in the development process — “a massive leap,” Zahas said.

While those numbers might look like they will be sufficient to meet the demand for the next decade, the consultants stressed that there is a regional shortage of construction crews, with construction delays compounded by high inflation and supply chain backlogs, and “we’re already seeing indicators that a recession is looming,” Zahas said.

All of that makes it unclear how many of those projected 1,660 housing units will come to fruition, as not every project gets built even in the best of times. 

Also of concern is the simple fact that there isn’t an unlimited amount of available land on which to accommodate all that development.

“That massive amount of housing that’s in the pipeline is already claiming most of the viable infill land capacity in town. You really are hitting a wall of capacity,” Zahas said, adding later, “The off-the-charts unprecedented-ness of what you already have in the pipeline can’t be overstated.”

Still, the Leland report estimates 2.4% annual growth over the next 10 years, which will keep Sandpoint among the fastest growing communities in the fastest-growing state in the country.

Among the recommendations for how to navigate that growth and its related challenges, the consultancy firm urged City Hall to complete its Comp Plan update and review land use codes, as well as refine the area of city impact in concert with Bonner County.

“That ACI is obviously critical,” Zahas said. “That’s where the vast majority of your future housing supply could be met.”

To support the ACI revision — which could expand Sandpoint city limits significantly to the west — the report suggested forming an area plan to guide the process, including a comprehensive strategy for extending utility and infrastructure, rather than building that out on a fragmented, project-by-project basis.

Other policy proposals included agreements with Sandpoint, Ponderay and Kootenai for water service and undertaking a highest/best use analysis of the downtown Sandpoint parking lot and adjacent property, with potential not only for structured parking, but a mix of residential and commercial.

Finally, to address the affordable housing crisis, Leland recommended creating a multi-jurisdictional housing authority using joint-powers agreements, which could leverage tax credits and other programs to ensure that what does end up getting built is attainable to lower- and middle-income residents.

“The market is not going to provide that,” Zahas said, noting as well that not every housing type can or will be served in every jurisdiction, meaning that some communities just end up being priced out of reach — particularly for younger prevailing wage-earners, with millennials being particularly hard pressed and increasingly pushed out.

“The presumption is that the millennials will be back when their income is high enough,” Rognstad said.

Policy implications noted in the Leland report will go back before Planning and Zoning and the City Council at a future date, with citizens given the opportunity to provide their input. 

To view a PDF file of  the study, go to sandpointidaho.gov/your-government/meetings/-folder-3040 and click on “Agenda Item 5A Sandpoint Housing and Industrial Analysis” on the right side of the page. To watch a recording of the July 12 workshop, visit the city of Sandpoint’s YouTube channel.