Where are all the workers? Part II

Lack of affordable housing fuels local worker shortage

By Zach Hagadone and Lyndsie Kiebert-Carey
Reader Staff

This article is the second piece in an ongoing series during which the Reader will examine various aspects of the labor shortage affecting area employers.

If area workers — especially in the service industries — seem a little anxious, stressed out or otherwise stretched thin, it’s because they are. After more than 18 months of COVID-19 pandemic life, the American workplace has undergone profound changes, with an emphasis for some on remote work and others thrown into the jaws of the virus with essential in-person positions in the realms of health care, education, and delivering food to both diners’ tables and shoppers’ grocery carts.

From across the economy employers cry out that they can’t find workers. The reasons for the labor shortage are many — from an aging workforce prompted to retire early by COVID to the virus itself, disrupting career paths, altering plans and, simply, killing people.

In Sandpoint and Bonner County at large, the worker shortage is rooted in the basic fact that there simply aren’t as many workers here as there used to be — the community’s labor pool shrank from 2020 to 2021 even as the population grew. That’s because a lot of the newcomers aren’t here to work but retire, in many cases, or work remotely for out-of-area companies. 

Both groups — retirees and remote workers — bring with them much higher wages than are typical of Bonner County, which they used to purchase property and extremely inflated prices. There is no mathematical way that a local worker, earning the area median income of about $60,000, which is a generous estimate, can compete in a hyper-inflated housing market where list prices frequently spin off into the $600,000 range and rentals run into the region of $2,000 per month and more — the kinds of prices Sandpointinans used to to scoff at when transplants reported them in places like Portland, Seattle and San Francisco.

Workers and their employers (that is, workers and employers who are actually based in Bonner County) are stuck in a crunch: there aren’t as many available laborers because they can’t afford to live here, and they can’t afford to live here because they make too little money to compete with the influx of big city cash flowing into the community from Zoomers, retirees and all the others who have decided for various reasons that Bonner County is the last best place.

Sensing the short-term emergency, employers themselves have stepped in to make sure their workers at least have shelter. Whether that’s a reasonable long-term solution remains to be seen.

Business owners as landlords

Justin Dick has taken matters into his own hands.

Trinity owner Justin Dick is one local employer who has been providing housing for his employees. Photo by Ben Olson.

The owner of Trinity at City Beach has invested both his time and money into efforts to keep roofs over his employees’ heads — and not just in recent months.

“The restaurant industry, historically, since I’ve been up here, has done things for housing for our employees,” he said, noting that he and his wife relocated to Sandpoint from Denver in 2006.

“I’ve put people up in campers, loaned them money to buy fifth wheels,” he said, also noting a condo on Olive Street he rented to employees for about a decade. Recently, a Trinity regular offered to hold onto a soon-to-expire lease at Condo Del Sol, which the restaurateur now sublets to his workers. Each agreement varies, but the housing is often tied to the renting employee’s compensation.

Like Dick, results from a July 2021 Sandpoint Workforce Housing survey show that many business owners are having to get creative to keep workers around. When asked in the survey to “provide details about steps you have taken to address workforce housing needs,” respondents shared varying methods — and varying degrees of success — in securing employee housing.

One business owner said they have helped with down payments to buy and deposits to rent. Another said they use their own personal and professional networks — rather than real estate agencies or other services — when trying to find workforce housing, hoping to find available housing through private sources. In some instances, community members come forward with rental opportunities not listed on the market. Some are attempting to raise wages, but in many cases, that method isn’t sustainable.

One employer wrote: “Paid for temporary stays in hotels while waiting for their housing to come open. I’ve paid employee deposits. I’ve paid employee rent when they aren’t able to afford it. I’ve paid electric bills, etc. I pay it out of my pocket personally — I don’t ever expect compensation from the employee.”

A common theme throughout the survey is a growing effort among business owners to be the name on the deed; however, even those signing the checks are not always able to front today’s prices. One employer tried to buy a house for rental but “the prices were outrageously high and I couldn’t make it work.”

Some shared that they have been able to secure homes and apartments for employees and, thanks to the current climate, it appears Sandpoint’s boss-meets-landlord is here to stay.

Dick is frank about the challenges that come with that balance, admitting that the process is “going to be a lot of trial by fire.” The trust required in a boss-employee relationship is doubled as the landlord-tenant relationship becomes a growing necessity.

“We’ve been hiring anybody who can fog up a mirror and has a pulse at this point in time,” Dick said. “That’s worked out about half the time, the other half of the time it bites you when you need them and they don’t show up.”

Another survey respondent, a landscaping service, shared that they’ve found some affordable rentals, “but that puts our employees living in Noxon, Mont., Clark Fork and south of Cocolalla.”

Dick is of the opinion that “industry heads” — those attempting to keep workers on their payrolls — are the ones who will produce the “true, novel innovations” to solve the housing issue in Sandpoint.

“One thing that is gravely apparent is we need to stop looking toward our government to fix things,” Dick said.

The task [force] at hand

One thing most stakeholders seem to agree on is that it’s going to take collaboration between government and the “industry heads” to which Dick referred to create structural change in the local housing market.

Ryan Robinson, who serves as the interim executive director of the Bonner County Economic Development Corporation, told the Reader that a symposium on workforce housing had been scheduled for October but has been pushed to March 2022. Meanwhile, he pointed to Sandpoint Mayor Shelby Rognstad’s workforce housing task force, which in August met for the first time.

Speaking of housing affordability, Robinson said, “We’ve kind of danced around it,” but, “We’re finally to the point where we’re getting all the players in the room.” 

That means bankers, those who work in finance, county and city officials, leaders in the construction industry and others, collaborating “to break down some of these barriers” to affordability, Robinson said.

“It’s going to be a long marathon,” Rognstad told the Reader in August, referring to the advisory task force. “It’s an active group, it’s an engaged group. These are doers. There’s a lot of interest around this right now and I think that already we’re seeing some action.”

But that action has been a long time coming. As both Rognstad and Robinson said, the gap between prevailing local wages and the cost of housing isn’t new.

“We’ve been talking about housing for a long time. When we were writing the Comprehensive Plan in 2009 we were talking about this. Certainly we were talking about this five years ago when housing was 282% cheaper than it is now. Who would have thought in 2016 that it would be almost three times the cost five years later?” Rognstad said.

“We’ve been seeing this coming and the difference is now that it does feel like a crisis and I think you have people really motivated to do something about it,” he added. “When you get major employers in the community who see this as a life or death situation for the future of their organization, it starts getting people engaged in the issue and starts getting resources brought to the table. … [And] I think it’s going to happen faster than what you see from typical government work. We can start to see results in one to three years.”

A consistent theme among developers and local government officials alike has been that lack of housing inventory is the real culprit behind the staggering increase in both sale and rental prices. A number of subdivisions, both big and small, have been working through the city’s Planning and Zoning Commission and City Council, while City Administrator Jennifer Stapleton told the Reader in a recent interview that there are somewhere around 900 developments of various sizes in the planning pipeline.

“Moving some of these developments along will help increase that supply,” Stapleton said, though added that the rental market is of more immediate importance to workers, rather than single-family homes — however, that’s what developers want to build most because they’re far and away more lucrative, especially at the current sky-high market prices.

Sandpoint Planning and Zoning Commission Chairman Jason Welker, who is running for City Council in the Tuesday, Nov. 2 election, has drawn a critical bead on so-called “workforce housing” that is priced out of reach of the very workers developers claim to be serving.

“Let’s be clear, home prices are not determined by the cost of construction of the home; they are determined by market demand and supply,” Welker told the Reader in an email. “Case in point, recent single-family home subdivisions in Sandpoint, in which newly built homes were listed for $300,000 two years ago, are now selling newly finished homes for over $500,000. This reflects not the higher material cost, but the higher demand. Nearly all of that additional $200,000 goes to the developer’s bottom line, e.g. profit.”

The county conundrum

Bonner County Commissioner Jeff Connolly said discussions about the lack of workforce-friendly housing have been happening at the county level “for the last couple years,” but that he’s unaware of any “specific plans.”

“We want to lend a hand, and however that looks, we’re not sure,” Connolly told the Reader.

Housing prices have also directly affected the county’s ability to hire talent from outside of the area.

“We’ve made several offers, and once they realize what the cost of living is, they can’t accept,” he said.

According to Idaho Department of Labor statistics, “public administration” employs 917 individuals in Bonner County, paying an average wage of $49,934 and ranked the sixth-largest employment sector after construction.

Connolly said that in collaborative meetings with all of the local municipalities, finding a way to fix the housing issue has become “one of the foremost conversations.”

Indeed, the affordability crisis is a county-wide issue — not just because of overall market prices, but because a large portion of the workforce often referred to as “Sandpoint’s workers” doesn’t even live in the city. Based on 2018 numbers, the Labor Department reported that 2,707 individuals who work in Bonner County live in Sandpoint, yet 5,192 people live somewhere else in the county but commute to Sandpoint for work. There are even more workers who live in the county but work elsewhere, numbering 6,485.

Connolly noted the ever-more-popular concept of employee housing opportunities being “in the hands of the employers.”

“But boy, that’s not a great model at all,” he added.

Commissioner Dan McDonald told the Reader that he is on Rognstad’s task force.

“Other than that, the county can do little other than to pave the way for the private sector to create more housing inventory,” McDonald wrote in an email. “We have made the permitting process simple, easy and affordable but we have limitations in the county that you don’t have within the cities, mainly, sewer and water. That will always be the limiting factor in more rural areas of the county.”

‘Look in the mirror’

According to Rob Hart, director of the Bonner Community Housing Agency, attempts by the city and county to solve the affordability crisis are completely separate from what he and his agency are working to implement, which is focused on the question: “What can ordinary people do to help solve this problem?”

Hart’s step-by-step plan for getting North Idaho roofs over the heads of “local employees, seniors and the disabled” focuses on the roles of those with control over homes and tracts of land — sellers, developers and builders — and their individual responsibility to choose what the future of the community will look like.

“We all need to look in the mirror, here,” Hart said. “We’re causing the problem. Everybody who is selling homes is part of the problem, and if just occasionally they could sell them to a local employee, or senior or [the] disabled, then that’s going to go a long way to solving the problem.”

But where is the money in making those choices?

Bonner Community Housing Agency is working with interested landowners and developers to prove that “it is possible to make money” building homes for the local workforce, Hart said, and for everyone else being priced out of the panhandle.

Pick up the Sept. 30 edition of the Reader for the third part in this series, which will examine some of the solutions to the housing crisis coming from both state and local entities. If you have a story of how the worker shortage and/or housing affordability has affected you or your business, share it with us at [email protected]

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