P&Z recommends approval of 25-acre rezone to make way for multi-family housing

By Zach Hagadone
Reader Staff

Sandpoint’s housing affordability crisis was front and center at the Oct. 5 meeting of the Planning and Zoning Commission, as members voted 3-1 to recommend approval for a Comprehensive Plan land use map amendment and rezone of a 25-acre parcel west of the airport from industrial to Context Area-3, which would allow for multi-family residential.

That decision came with the stipulation that a development agreement be written up front that “at the very least” includes the stipulation that future building on the site actually results in multi-family and “workforce” housing, Commission Chairman Jason Welker said in his motion to recommend approval to the City Council.

Therein lay the big sticking point: what is meant by “workforce” housing and how (even whether) to balance industrial with residential uses in a housing and economic climate that has put immense stress on both.

Commissioner Forrest Schuck was the sole dissenting vote, citing his concern that recommending approval would open the way for every industrial-zoned property owner to come looking for a rezone to more immediately lucrative uses, such as residential.

An aerial photo, left, and map, right, showing the proposed development (marked with arrows). Courtesy images.

“Everybody’s in a big hurry,” he said, noting a preponderance of “buzzwords” being used related to affordable and workforce housing, leading to “a lot of rubber-stamping going on around those words.”

“I don’t think we should be so quick to give that up [industrial land] for some ephemeral idea of what workforce housing might be,” he added, going on to say that without a development agreement, “we’re just giving up the farm.”

The property in question, which is owned by Litehouse, Inc., is currently vacant and has been used only for haying, according to Jeremy Grimm, of Whiskey Rock Planning and Consulting, which represented Litehouse in its application for the Comp Plan amendment and rezone.   

Grimm, a former Sandpoint planning director, said the city has “plenty of land to absorb industrial and manufacturing uses.” 

He pointed out that Idaho has experienced a 40% decline in manufactured goods, meanwhile the economy has only added jobs to the lower-wage services industries. 

“There are a lot of other sectors that need housing for their workers,” Grimm said, underscoring the dire need for more housing supply to help bring down astronomical prices that are putting a crunch on area laborers and employers alike.

“The numbers speak for themselves,” he said, highlighting that 47% of renters and 37% of homeowners are spending more than 30% of their income on housing. 

At the same time, while the city needs to have added more than 100 dwelling units per year to meet demand, Grimm said, it has year-to-date only brought 26 to the market (and 130 single-family units in the past three years). However, there are more than 600 units in the development pipeline, according to interim City Planner Daren Fluke, accounting for about 15% of the housing stock in the city. Meanwhile, 21% of the city’s land area is designated industrial, much of it clustered in “quite tidy” areas around the airport, Fluke said.

Pointing to national housing analysis, Grimm has more than once said that industrial-zoned properties, many of which sit fallow, are not serving their highest and best purpose, therefore helping constrict developable space and driving up residential prices.

“This is a critical, critical issue for this community,” Grimm said, warning that “we will lose our employees, we will lose our employers. We will become a Jackson Hole. … This community is at great risk of losing existing employers if the housing crisis persists. I can’t stress this enough.”

Commissioners agreed that easing the financial burden of housing for area workers is of paramount importance, but worried about to what extent future development on the site would really benefit local wage earners. 

Despite what has been suggested in other media reports and more than one piece of testimony at the Oct. 5 meeting, while Litehouse currently owns the property and is seeking the amendment and rezone, the company is not necessarily intending to develop the parcel as “affordable” or “workforce” housing.

Coeur d’Alene-based developer Cliff Mort, of Big Creek Land Company, whose Monogram Homes is constructing the nearby Boyer Meadows subdivision among several other projects in the region, told the commission that “one of my companies is the contract purchaser of this [property] subject to a rezone.”

Mort, whose Boyer Meadows project was represented before both P&Z and the City Council by Grimm, said that the requirement of an up-front development agreement adds both time and cost to any development — in the case of residential projects, adding to their sale price. 

“When cities start going down that road it’s a bit of a slippery slope,” said Mort, who along with Grimm serves on Sandpoint Mayor Shelby Rognstad’s Workforce Housing Task Force. “I think the market itself dictates supply and demand and pricing … [And] right now, in this current environment, timing is everything when it comes to helping with the current housing crisis.”

As he stated during testimony on the Boyer Meadows project, Mort reiterated the relative nature of “affordable” housing —  while Grimm (who was recently appointed to the the Idaho Economic Advisory Council) said it’s a simple matter of supply and demand: “Housing begets workers, which will allow industry to grow.”

What’s more, Grimm said, “We don’t know what workforce housing is.”

Commissioner Cate Huisman keyed in on a previous statement of Mort’s during testimony on the Boyer Meadows project, in which he asked “whose workforce?” in relation to conversations regarding worker-priced housing in Sandpoint. 

Welker, in a subsequent statement at the Oct. 5 meeting, said, “We talk about buzzwords: workforce housing, affordable housing, market-priced housing. Another buzzword that we hear from the mayor and the Sandpoint Workforce Housing Task Force, which I believe Mr. Mort is a member of, is public-private partnerships … partnering with the developer to assure that some proportion of the homes that will ultimately end up in this development are without question available to workers in the local economy.”

Welker continued that, “We need to secure some guarantee” that whatever gets built on the parcel is geared toward workforce housing, and, “we do know what workforce housing is: It is for workers in the local economy and there are models all over the country for how that can occur. It doesn’t mean that there won’t be market-priced housing in future development here, it just means that we’re taking one small step to assure some housing for people who work in the local economy who earn closer to or below the area median income.”

Market-priced housing in Sandpoint is currently between $400,000 and $700,000, depending on the source, for single-family residential. Meanwhile, rents even for single-bedroom units routinely rise into the $2,000-per-month range. Area median income is generally defined as around $61,000 per year, though Fluke cited a figure at the Oct. 5 meeting pegging “affordable” housing as suited for a yearly wage of about $50,000.

Welker addressed “the sense of urgency” to bring more housing units onto the market, saying, “yes, we’ve got to grow supply faster than we can grow demand. I think demand has been growing at an unprecedented rate for the past year and a half. I think the urgency might be on the suppliers’ part to capitalize on the record demand of the past year and a half as quickly as possible. 

“I’d say let’s slow down a little bit and make sure we do it right so that this 25 acres, which as far as I can tell is one of the last largest undeveloped parcels in all of Sandpoint, does provide housing that meets the needs of our community — not just the urgency from the developer to cash in while the market’s hot or the demand from the potential buyers, who as far as I can tell from the developments we’ve seen in the last year are mostly going to people who don’t work in the local economy — who are second-homeowners, investors, speculators, remote workers and that’s not what we need more of right now,” he added. “Of course that’s somebody’s workforce, but we know who our workforce is. It’s the people who work for Litehouse, Bonner General, the school district. That’s who we hear from supporting this rezone and that’s who we should take this step to serve.”

The application now goes to the Sandpoint City Council for final consideration.