Boise’s population is rising fast and so are housing prices – an economic boom that comes with a cost: homeless people have to struggle to get back into housing because rents are so high.
That was the message of a panel discussion on homelessness hosted by the Idaho Chapter meeting of the Building Owners and Managers Association on Nov. 21. The 90-minute discussion looked at three aspects of the homeless problem: employment, housing and services. The panels were moderated by Geoffrey Wardle of the real estate law firm of Clark Wardle.
Jodi Peterson Stigers, manager of the Interfaith Sanctuary shelter in Boise, noted the “most critical need” is to “house people until they can get housing.”
“These people have been priced out of rentals. There is no affordable option,” she said.
Stigers also outlined how hard it is to get a job or to accessing services without an address or photo ID. She referenced the unique problems of trying to obtain an ID, which she addressed in a recent Boise TED talk.
Beatrice Black of the Women’s and Children’s Alliance, which provides services and shelter for domestic violence victims, stressed that many shelter residents are working full time but have no access to affordable housing “so they’re stuck.”
“Every morning they wake up and they go to work, but they’re branded as homeless,” she said. “This hurts their ability to move up and get a better paying job. It’s really hard to do when you have no address. It also hurts your ability to get housing when you have none. It’s a struggle and our timelines (to find affordable housing) are so much longer now. People are staying in our shelter for a year and a half because there’s no access to actually having (housing) inventory.”
Stigers underscored how homelessness is really a package of interrelated problems, which can’t be solved by simplistic solutions: “Our perception of what people need and want and what they (actually) need is different,” Stiger said.
“There’s not one person in my shelter that’s not experiencing some level of trauma, however they got into homelessness. We have to create safe space first and give them some time to get their head back together and then we can really start addressing the major issues. … Studies show that (you must address) trauma first. Then (addressing) mental health and addiction follows.”
Black also presented this chilling statistic: “Domestic violence abuse is the leading cause of homelessness in our community and in the country as a whole.”
Economic abuse is part of the picture that’s often neglected, she said, adding that it is challenging to rehouse and employ these victims if they inherited a bad credit history from a spouse or lack transportation.
Black brought home how economic conditions over the last decade are creating a new class of homeless: “(Going by) last year’s numbers, 85 percent of the clients who lived in our shelter had annual incomes of less than $12,000 a year. So you try to find something on that kind of income, and it’s virtually impossible.”
But there are efforts underway to provide new opportunities to people who are facing homelessness.
To help address a shortage in available labor, the City of Boise Parks Department began a program in 2017 to employ some of the residents of the Interfaith Sanctuary Shelter.
Jennifer Tomlinson, parks superintendent for the City of Boise, outlined factors that have made the program successful despite some of the problems that often prevent this population from working, like viable transportation.
“We worked extensively on the scheduling,” said Tomlinson. “The Sanctuary provides transportation and lunch for them. And I think the most important part of our program is there’s a case manager who’s assigned to each of the teams that works for us … If things are starting to go sideways, then there’s always somebody who’s able to step in and help them.”
As a business owner, Bret Vaterlaus, owner and manager of Western Building Maintenance of Boise, decided a few years ago to extend employment to one portion of the homeless population often left jobless. Despite a genuine desire to work, many people who have served time behind bars can’t get jobs. Vaterlaus outlined the success he’s had in employing former convicts; however, he emphasized that many building maintenance contracts prevent this.
“So if you want to make a difference, review your contracts,” he said. “If you would you like to be a community-minded tenant … then take a little bit of risk and help them improve, but it all has to start with all of us working together. But currently, (service) contracts usually block employing these people — so that’s where we’re stuck at.”
Here’s something you don’t see every day: a new proposed affordable housing apartment complex, let alone an attempt to build affordable housing without federal low-income housing tax credits or other incentives.
Wendy Klahr wants to build a 17-unit, three-story apartment complex with one-bedroom “efficiency units” on Overland Road with monthly rents in the $600 to $650 range. The Prime 17 complex could also become condos at about $120,000 to $140,000.
Klahr’s planned urban development got Boise Planning & Zoning Commission approval Sept. 17, but a few more city approvals are needed – and Klahr is still wrestling with finding affordable construction costs.
“We had one person quote $200 a square foot range,” Klahr said about construction cost estimates from a potential developer. “We can do it if we can fall in the $120 to $140 (per square foot) range. In a perfect world, we would start construction in spring, certainly next year.”
Prime 17 would be immediately west of Rockies Diner and across the street from Chicago Connection. Klahr picked a 1.5-mile stretch Of Overland between Vista and Orchard with hardly any homes. She sees it as a location with many shopping and dining options within walking distance.
“It makes a ton of sense to me,” she said. “You can walk to restaurants. You can ride your bike downtown. There are neighborhood bars. There are banks. You can get anywhere (on the bus that runs on Overland).”
The .24-acre lot currently has an outdoor emissions testing station and a Mexican food truck.
Klahr — who is developing the property with her husband, Brad — consulted with her daughter, a Boise State University student, and several of her daughter’s friends to get a sense of what the younger generation needs.
“Half of the people I talk to don’t even have a car and don’t even want one,” Klahr said.
She imagines Prime 17 will be all one-bedroom units, with maybe a few that include a small den. Units would run 350 to 400 square feet.
“It’s going to be an efficiency unit,” she said.
Even though she’s creating affordable housing, she hopes to put in granite counters but said the younger generation tells her they don’t care about stainless steel appliances, which are common in market-rate apartments these days.
“I’m totally excited about this project,” Klahr said. “One of my greatest passions is a) infill development and b) creating an affordable product.”
The architect is Jeff Hatch at Hatch Design Architecture in Boise. A general contractor has not been selected.
Boise’s three major problems are transportation, housing and the environment, said Mayor David Bieter during his State of the City message on Sept. 12, and he had proposals to address each of them. But more than anything else, he wanted to ensure that Boise remains kind, he said, speaking at the Morrison Center on the Boise State University campus.
“In the transportation future we imagine, what do we see?” Bieter asked. “Don’t we all see clean, convenient transit?” But Boise, and the rest of Idaho, are stymied due to a lack of funding, he said. Idaho is one of the few states that doesn’t provide for local option taxing authority, which allows citizens of a region to vote to tax themselves to raise money for funds for items such as transit.
Using as a model the proposals on the November ballot to expand Medicaid and to allow historic horse racing terminals at racetracks, Bieter proposed a citizen initiative. “We should band together statewide and get the signatures for a local option in 2020,” he said. “We need to start this November. Transit needs funding, and local option is the way.”
For housing, Bieter noted that Boise is predicted to gain 50,000 new residents over the next 20 years, which would require 20,000 new housing units, or about 1,000 a year. He proposed five ways to increase Boise housing:
Establish a housing land trust of $20 million to preserve and protect housing affordability.
Offer incentives to developers, similar to the Downtown Housing Incentive Program, to develop rental housing that is affordable to 80 percent or below the median household income.
Leverage public and private land to create mixed use, mixed-income projects.
Change zoning and land use rules in what appeared to be a call to increase density.
Work with Capital City Development Corp. and other organizations to develop housing projects within urban renewal districts.
“Given the rapid growth in housing prices and rents over the past few years, IHFA welcomes the opportunity to partner with the City of Boise to expand affordable housing opportunities,” said Gerald Hunter, president of the Idaho Housing and Finance Association, a Boise-based organization that promotes affordable housing. “Without these critical public-private partnerships, our communities will simply not be successful in addressing our future workforce housing needs.”
For the environment, Bieter called for no longer annexing or rezoning property to allow new development in the Foothills, after the approximately 400 lots that had already been allowed under existing zoning. “Instead, new development should go to those areas called for under Blueprint Boise, along transit corridors and through infill,” he said.
In addition, Bieter said that the city of Boise’s facilities and operations would be 100 percent powered by renewable electricity by the year 2030. He did not provide specifics about how this would occur or what types of electricity he would consider renewable. Boise is already the only city in the country that powers some of its city buildings through geothermal energy, while Idaho Power reports that more than half of its electricity comes from renewable sources such as water, solar, wind, geothermal and biomass.
Bieter also exhorted Boise citizens to continue to be kind, noting that he was overwhelmed by the support city residents offered to the victims and their families after a mass stabbing in July. He also asked that people say hello to strangers and let people into traffic. With that level of kindness, Boise would truly be the most livable city in the country, he said.
In addition, Bieter praised his administration for opening 15 parks, reserves and golf courses, four branch libraries, three community centers, eight new or remodeled fire stations, and a number of other city amenities since 2004. “Many of these projects had been planned for decades and backlogged, waiting for years to be completed,” he said.
With Idaho simultaneously the nation’s fastest-growing state, but stuck at No. 36 for housing affordability, there is an increasing need for affordable multifamily housing, particularly in the fast-growing Treasure Valley and resort communities such as McCall.
“Affordable multifamily housing” means something different in each city. (See box.) Boise, though Treasure Valley’s largest and arguably most expensive city, has one advantage. It owns and operates its own rental housing portfolio of more than 300 units in 48 locations, said AnaMarie Guiles, housing & community development manager. It tends to serve households earning 50 percent or less of the median income, currently $64,300, she said.
Owning land or bringing money to the table also gives Boise more leverage with developers, Guiles said. “Boise was a partner, so we were able to say to the developer, ‘We will be a partner, but some of it has to be subsidized,’” she said. Funding for affordable housing is always an issue. (See box.)
With improvements in the economy, Garden City – home to several trailer parks, some of which have been displaced by new construction – hasn’t had an affordable multifamily project since Trailwinds in 2015, said Jenah Thornborrow, director of development services. “Garden City has traditionally had a larger share, proportionally, of affordable housing stock within the Treasure Valley,” she said. “I would suspect that that is still fairly constant, but it’s not meeting everyone’s needs.”
Similarly, while Nampa has eight multifamily housing projects underway, only two – intended for senior citizens – are technically “affordable,” said Karla Nelson, community planner.
Housing projects in McCall tend to be created for workforce. Eighty-two percent of McCall employees live outside the city and commute, because only 27 percent of housing units in McCall are owner-occupied, with 73 percent vacant due to second homes and vacation rentals, said Michelle Groenevelt, community and economic development director.
“The city lacks at least 700 units for the local workforce based on current household incomes,” she said. “There are even more units needed when commuters are considered.” The last housing development with an income qualification, the 72-unit The Springs, was built in 2016, she said.
“A never-ending question in mountain communities is how you provide affordable workforce housing,” said Andrew Mentzer, executive director of the West Central Mountains Economic Development Council.
Mentzer is collaborating with partners to pull together resources in this area – starting with landowners who might have a tract of land they’d be willing to develop but don’t know how, he said. This would be for deed-restricted housing – in other words, some legal instrument requiring occupants who live and work in the area. The type of help available could include aid to someone needing help finishing a studio above the garage for an accessory dwelling unit, all the way to multiple-acre, multiple-unit developments, he said.
“The challenge is a lot of the silos that exist in the development space scare people off,” Mentzer said. “Whether you’re a seasoned or a ‘shade tree’ developer, there are places in the process where you get dissuaded from doing a project.”
Idaho’s more expensive areas include the city of Boise, Blaine, Teton, and Gem counties and Coeur d’Alene. The largest gaps between the housing wage and average renter wage exist in smaller communities such as Bear Lake, Boise, Fremont, Latah, Lemhi, Valley, and Washington counties, according to a report from the Idaho Asset Building Network. The school district in Blaine County is now considering a proposal to build housing geared to teachers.
Several cities are changing zoning codes to encourage multifamily affordable housing. Caldwell amended its codes in 2005 to allow for mixed-use development with commercial on the ground floor and residential above, particularly downtown, said Brian Billingsley, planning & zoning director for Caldwell. His challenge at this point is setting up a quiet zone to keep the hourly trains from blowing their horns. “It’s taking forever to get that accomplished,” he said. “Developers are hesitant to build a project downtown until that’s a reality.”
In Melba, where the Canyon County city changed its zoning in 2016 to allow for housing in its commercial area, developers have been looking downtown for possible multifamily projects, said Noni Stapleton, city clerk/treasurer. She doesn’t know if any are considering affordable housing.
Other cities are looking at incentives to encourage developers to construct affordable multifamily housing.
“We don’t have a lot of tools to deal specifically with affordability, but we have tools to build higher-density housing,” said Hal Simmons, Boise’s planning director. The city is considering adding density bonuses for affordable housing in the future, but density runs into community opposition. “We have some pretty heated public hearings about density,” he said, though he pointed out, “There’s nobody who hasn’t lived in an apartment project sometime and needed housing on the affordable side.”
Meridian is looking at incentives for more dense, infill projects to provide affordable workforce housing, said Caleb Hood, planning division manager. But there are no specific affordable housing projects underway, he said.
And some cities, such as Kuna and Caldwell, are just getting off the ground with multifamily housing. “We didn’t issue a single multifamily dwelling unit permit from 2008 until 2016,” said Troy Behunin, senior planner. While the city now has several multifamily projects underway, only one is affordable, a five-building, 10-unit project. Two existing projects – White Barn, and Leisure Village, intended for senior citizens – are affordable, said Wendy Howell, planning and zoning director.
“Our busiest year for permits was 2006,” when Caldwell had 1,100, Billingsley said. “Every single one was for a single-family dwelling.”
When is “affordable” not “affordable?”
Part of the problem with talking about “affordable housing” is defining “affordable.”
Certainly, due to land prices and demographic factors, an apartment in Kuna or Melba or Middleton might cost less than a similar apartment in downtown Boise. “Even if apartments are the same money per month, they don’t have to worry about maintenance, upkeep, insurance, and, and, and,” said Troy Behunin, senior planner for Kuna.
“Market-rate rents in Nampa have tended to be more affordable than in many of our neighboring communities,” said Karla Nelson, community planner.
But that doesn’t technically make it “affordable housing.”
Affordable housing is defined by the federal government as housing geared toward people earning 80 percent of less of median income, as defined each year by the Department of Housing and Urban Development, said AnaMarie Guiles, housing & community development manager for Boise. “For us, a median income is $64,300 for a four-person household,” meaning $51,440 as the threshold for subsidies by the federal government or a municipality.
But due to stigma around the term “affordable housing,” over the past couple of years cities have started using the term “housing affordability” for all demographics, Guiles said. And that can cause confusion.
“We don’t have anything actually called ‘affordable housing,’” said Noni Stapleton, city clerk/treasurer for Melba, in Canyon County. “We’re really small, with only a population of 500. The city limits are very small – 6 blocks wide and 12 blocks long.” The city has two triplexes downtown, built in the late 1990s, that aren’t deemed affordable housing, most rented by dairy farmers for their workers. There are also eight Section 8 units run by Southwestern Idaho Cooperative Housing Authority that date from 1995.
Similarly, Middleton has five apartment complexes “that are always full,” said Mayor Darin Taylor. The city has approved 12 fourplexes, six of which are under construction to open in 2018, but none built with government subsidies,
“We need to break down what we mean by ‘affordable housing,’” said Wyatt Schroeder, executive director of Catch Inc., with offices in Boise and Nampa. “Workforce housing for our firefighters and teachers? Senior developments so people can age in place where it’s safe?” Disabled people who need services also deserve housing, he said. “Too often, we talk very broadly, without defining what those mean and what they look like.”
Alejandra Cerna Rios, policy analyst at the Idaho Asset Building Network, said that in seven of eight metropolitan areas in Idaho and in 36 of its 44 counties, the ‘housing wage’ – or the hourly wage needed to spend no more than 30 percent of household income on rent and utilities on a two-bedroom unit at fair market rent- exceeds typical renter earnings.
In Idaho, the fair market rent for a two-bedroom apartment is $803 per month, Cerna Rios said. To cover rent and utilities for a two-bedroom rental without spending more than 30 percent of income on housing costs, an Idaho household must earn $32,122 annually, or $15.44 per hour, she said. On average, Idaho renters earn $12.19 per hour, she said. Occupations that earn less than the wage needed to pay for housing include ambulance drivers, bank tellers, child care workers, servers, home health aides, preschool teachers, nursing assistants, customer service representatives, and bus drivers.
No local funding tools for affordable multifamily housing
Compared with other states, Idaho lacks tools to develop affordable multifamily housing, said AnaMarie Guiles, housing and community development manager for Boise.
For example, the Federal Housing Trust Fund was created by Congress in 2008 to support the development and operations of housing for households earning up to 30 percent of the Area Median Income. However, those trust funds are funded by the individual states. Idaho is one of three states, along with Alabama and Rhode Island, that has not yet appropriated any money for the fund, let alone identified a continuing revenue source, according to the Center for Community Change’s Housing Trust Fund project.
Similarly, while some cities had enacted affordable housing ordinances that charged developers fees to help fund affordable housing, lawsuits in McCall and Sun Valley in 2008 ruled them an illegal tax. A similar ordinance in Ketchum is in litigation.
As one of Idaho’s resort cities with a population under 10,000, McCall has the advantage of local option taxing authority. Voters recently passed a local option tax that includes local housing as an eligible option for funding, said Michelle Groenevelt, community and economic development director.
Affordable projects in the Treasure Valley
New Path Community Housing
Address: 2200 W. Fairview Avenue
41 Units (including one manager unit)
Developer: Thomas Development Co., The Pacific Companies, and Northwest Integrity Housing Co. (NIHC)
Architect: Erstad Architects
Cost: $7.5 million
Address: 2403-2419 W. Fairview Avenue
134 Units (including one manager unit)
Mix of incomes and bedroom-types (121 affordable units)
Developer: Thomas Development Co. and Northwest Integrity Housing (NIHC)
Architect: Erstad Architects
Cost: $28.5 million
Vineyard at Eagle Promenade
Address: 10482 W. Utahna Road
30 Units (including one manager unit)
Affordable Senior (55+)
Developer: New Beginnings Housing, LLC
Architect: The Architects Office
Cost: $5.9 million
Vineyard at Sycamore Place
Address: 817 Fillmore Street
Senior community of 35,000 square feet, including community areas, with one-bedroom and two-bedroom units from $340-$775 monthly, to be available July 1
Developer: New Beginnings Housing
Architect: Mark Sanders, The Architects Office
Builder: Wright Brothers The Building Co., Eagle
Cost: $6.5 million
Address: 20-35 W. Flyline Lane
Developer: The Housing Company
Architect: The Architects Office
Vineyard Suites on the Boulevard
Address: 888 W. Corporate
50 units restricted to senior households. Available by summer 2019.
Developer: Wright Brothers The Building Company
Architect: Mark Sanders with The Architects Office
Cost: $10 million
Address: 1615 8th
All rents at or below 55 percent of area median income. Start construction early July 2018, first units coming online July of 2019.
Builder: CSDI Construction, Inc
Architect: Hutchinson Smith Architects
Cost: Declined to state
The Sun Valley Resort is building two employee dormitories that are slated to be completed by April of next year.
“It’s not just Sun Valley,” said Kelli Lusk, public relations and communications manager for the company. “Many of the mountain towns and resorts in the U.S. are having a housing issue. We’re taking steps to help solve that.”
Lusk said part of the problem is that short-term rental services such as VRBO and Airbnb are taking long-term rentals in resort communities off the market. “We’re seeing a decrease in available rentals,” she said. Airbnb lists 306 properties in the Sun Valley area. VRBO lists 722, all but 30 of which are more than $100 a night.
That is not likely to change. The 2017 Legislature passed a law that allows local and county governments to regulate, but not ban, short-term rentals; forbids counties and cities from regulating websites that advertise rentals; and forbids localities from imposing special additional taxes or fees only on STRs, though it also requires owners of short-term rentals to pay state sales and hotel taxes.
Some workers can’t do a typical one-year lease because they are temporary employees who come in only for the season and then leave, or because they are seasonal employees who do something different during the “shoulder seasons” before and after the most popular seasons, Lusk explained. Providing employee housing helps with worker retention.
Sun Valley typically has more than 1,200 people at work, depending on the season.
This spring, the resort will get started on two buildings, one with 116 units and the other with 60, for a total of 176. The dorms will include single, double, and triple rooms, which will ultimately house from 350 to 500 employees. Pricing will vary, with accommodation provided as part of employment in some cases, she said. The new dorms will include locker rooms and storage, workout facilities, laundry areas, lounge areas, food serving options, and outside recreation areas.
The company is going to tear down its existing dorms, including the Moritz building, which also houses some company offices. “Some of them are a little bit dated,” Lusk said.
Although no new net housing is being created because of the demolition of the old dorms, Harry Griffith, executive director of Sun Valley Economic Development, which serves Blaine County, said the new housing will help Sun Valley compete for workers.
Three local developers will start construction in early October on a 116-unit affordable housing apartment project on Boise’s West End.
Adare Manor Apartments will be located on Fairview Avenue between 24th and 25th Streets. The same team is building the nearby 41-unit New Path Community Housing for the chronically homeless.
The developer of both projects is Boise Pacific NIHC, a joint venture of three local developers who have previously collaborated in building and operating affordable housing projects: Northwest Integrity Housing Company and TPC Holdings V LLC with general partners Tom Mannschreck, CEO of Thomas Development Co. and Caleb Roope, CEO of The Pacific Companies.
The project architects are erstad ARCHITECTS of Boise. The general contractor is ESI Construction of Meridian.
Adare Manor will be a mixed-income project with energy efficient units designated units for tenants earning 30 percent of the area’s median wage and for tenants earning 80 percent of the median wage. The complex will include some market-rate apartments, Mannschreck said.
He expects Adare Manor to open in late summer 2018.
Adare Manor qualified for $890,526 in federal Low-Income Housing Tax Credits, $18 million in tax-exempt bonds and $1.2 million from the HOME program, all issued by Idaho Housing and Finance Association, said IHFA spokeswoman Lorie O’Donley.
The new 37-unit Ross Island at Moffat Cove affordable housing complex in Emmett should be fully occupied by the end of August, soon after construction on the final building is completed.
Low-income tenants have been moving in Ross Island since the first of six six-plexes was completed in June, said Corey Checketts, development director at Garden City-based Community Development Inc., which builds and owns 68 affordable housing properties in 12 states.
Ross Island also has a community center with an attached manager’s apartment.
Ross Island is Emmett’s second set of CDI affordable housing apartments. Emmett Mayor Gordon Petrie said the city needs more affordable housing, not just for people living in the community but also for people who end up moving to town when affordable housing becomes available.
“If we serve just people in Gem County, we could easily use three more,” Petrie said. “But that’s not how this subsidized housing works.”
Along with locals, affordable housing complexes attract out-of-towners who are looking for affordable housing. In such developments in Idaho, 20 to 33 percent of the tenants typically moved somewhere else because the housing was available, Checketts said.
“There’s always going to be some of that, especially with Emmett’s proximity to Boise,” Checketts said.
Ross Island is for individuals and families at or below 40 percent, 45 percent, 50 percent and 55 percent of the area median income, which in Gem County is $55,200 for a family of four, Checketts said.
Ross Island has 24 two-bedroom units with rents ranging from $444 to $630 a month, depending on tenant income, and 12 three-bedroom units with rents from $656 to $727, he said.
Ross Island follows the 21st century model of many affordable housing projects, which are designed to mirror market-rate housing, as the trend is to integrate affordable housing into mainstream neighborhoods, Checketts said. Boise-based Hutchison Smith Architects is the architect and Andersen Construction Company of Boise is the builder.
“They took an area that was trashy and turned it around,” Petrie said. “It’s a very nice complex. It’s the type of thing you would find in Meridian, Nampa and Boise for the middle class.”
Petrie noted more affordable housing is needed in Emmett, even for the middle class.
“It’s not a crisis but it is a need,” Petrie said. “Emmett is known as the poorest town in Idaho. Several residents in our community are severely rent-burdened. The people who really struggle are middle-income people, your professionals not able to buy a home.”
Affordable housing, however, only covers low-income people.
Checketts said CDI is evaluating the entire Treasure Valley as it decides where to build its next two affordable housing projects. CDI would break ground in late 2018 or early 2019.
“We have to figure out where we want the next one to be,” he said.
A 36-unit affordable housing apartment complex started construction in Donnelly in January with an expected completion in November.
Northwest Passage Apartments will have 10 one-bedroom apartments with monthly rents of $426 to $603, 18 two-bedroom units at $513 to $720 per month and eight three-bedroom units at $675 to $800 per month, said Jess Giuffré, senior property developer at Northwest Real Estate Capital Corp., a Boise nonprofit developer and property manager of affordable housing.
Tenants will be people who earn between 40 and 55 percent of Valley County’s area median income. Four units will be market rate, Giuffré said.
“Valley County is an area that has had a need for affordable housing for many years,” Giuffré said. “There are a lot of people working in the service industry without a lot of places to live. This project would only capture 12 percent of the market.”
Northwest Passage falls within the four overall goals of the West Central Mountain Economic Development Council, the regional economic planning association in Valley County. One objective is to promote vibrant communities by supporting affordable housing options.
“In the overall scheme, it’s a really nice addition to the region,” said Andrew Mentzer, the council’s executive director. ”It definitely serves a specific need. There is a tremendous need for affordable housing.”
The Housing Company, the Boise nonprofit that builds affordable housing across Idaho, built The Springs I and The Springs II in McCall in 2011 and 2016 with a combined 72 units.
Northwest Real Estate, which will own Northwest Passage, is co-developing the property with VCD LLC, which also built the Trailwinds Apartments affordable housing in Garden City. The VCD partners are Chance Hobbs, Vince Spagnolo and Doug Crowther.
CSHQA in Boise was the architect. CSDI Construction in Boise is the general contractor.
The $8 million project is funded with $6.6 million in Low Income Housing Tax Credits purchased by Boston Capital, $1.242 million from Bonneville Multifamily Capital in Salt Lake City and a $58,000 loan from Northwest Real Estate Capital Corp., Giuffré said.
The Boise City/Ada County Housing Authority has assigned 40 Section 8 housing vouchers to Boise’s first apartment complex for the chronically homeless. The apartment project is scheduled to be built at the southeast corner of Fairview Avenue and 24th Street in the city’s West End.
This marks the first time the housing authority has designated project-based vouchers rather than the standard tenant-based Section 8 vouchers issued to low-income individuals to subsidize housing costs. The 40 project-based vouchers were subtracted from the total 2,000 Section 8 vouchers allocated to the local housing authority, said Jillian Patterson, the authority’s housing program director.
“These vouchers will serve people who are chronically homeless,” Patterson said.
These vouchers will be assigned to the New Path Beginnings apartments to subsidize tenant rent payments rather than being acquired by and submitted by tenants, Patterson said.
For New Path Beginnings, this supplies guaranteed income rather than relying on tenants securing Section 8 vouchers.
“The majority of the income will be based on project-based vouchers,” said Tom Mannschreck, a general partner in the New Path Beginnings project. “By partnering with Boise and Ada County, we have a source of income to provide maintenance and capital improvements. (This housing) has the same level of operating expenses as any other project.”
The project-based vouches will bridge the gap between the rent and the dollar amount a tenant is able to pay. The housing authority acknowledged the homeless tenants likely will have less reliable sources of money than other low-income people.
“What we pay for those vouchers is going to be higher than what we pay under the tenant-based program,” said Deanna Watson, the housing authority’s executive director
The project-based vouchers and the apartments dedicated to the chronically homeless are both outgrowths of the community’s Housing First program announced in February 2016. At the same time, Housing First issued a request for proposals for a single-site housing project “uniquely designed to serve and support the target population.” The Housing First partners include Idaho Housing and Finance Association, the City of Boise, Ada County, St. Luke’s Health System, Saint Alphonsus Health System and The Home Partnership Foundation.
Housing First selected Boise Pacific NIHC Associates to build a four-story, 41-unit New Path Beginnings complex that will also include largely on-site support service such as health care, mental health counseling, case management, substance use treatment and financial counseling. One unit is for use as a manager’s residence.
Boise Pacific NIHC was the only respondent to the housing authority’s request for proposals to become a recipient of project-based housing vouchers.
Boise Pacific NIHC is a joint venture of three local developers who have previously collaborated in building and operating affordable housing projects: Northwest Integrity Housing Company and TPC Holdings V LLC with general partners Mannschreck, CEO of the Thomas Development Co., and Caleb Roope, CEO of The Pacific Companies.
Earlier in March, the Boise City Council rezoned the Fairview/22nd Street property for multi-family housing and Mannschreck expects to submit designs to the city’s Design Review Committee in April.
“We should be out of the ground in the fourth quarter,” Mannschreck said.
He anticipates opening New Path Beginnings late in the third quarter of 2018.
As Ketchum’s ordinance to have developers include affordable housing in certain projects remained tied up in litigation, the City Council on March 6 approved on emergency motion to move forward with the spirit of the ordinance through individual agreements with developers.
The move takes the elements of Ketchum’s floor area ratios and community housing ordinance from being a law and instead makes it part of the development agreement negotiations.
“It’s basically the same thing,” said Lisa Enourato, assistant to the city administrator. “What’s different is it’s an agreement. Because it’s an agreement, we work with one another to come to an agreement. The parties get to have an ability to make a decision as to whether to move forward.”
The city will still call for developers to include affordable housing or pay a fee if a project’s floor space exceeds the property’s square footage, a measurement known as 1.0 floor area ratio or FAR.
“This will allow all parties to continue working in partnership to ensure Ketchum’s affordable housing needs are still prioritized,” Mayor Nina Jonas wrote in her March 3 letter to the community. Supporting affordable housing initiatives is critically important to the City – and to me. We need to continue to work and collaborate with developers, Ketchum residents, and the City itself to ensure our shared affordable housing needs are met. “
The City Council’s agreement is a reaction to a Jan. 27 lawsuit filed in Blaine County Fifth District Court in Hailey by developer Scot Ludwig, who objected to $840,000 in community housing in-lieu of fees from Ketchum for his proposed three-story, 37,000-square, condo-and-retail project on 16,500 square feet in downtown Ketchum. Ludwig, an attorney, is also Boise City Council member.
Ludwig believes the ordinance is unconstitutional and said the new agreement is as well.
“I think it’s worse than the ordinance they replaced. At least the former ordinance had a formula for exactly how much the illegal tax would be,” he said. “What’s worse about the emergency ordinance is the amount of the illegal tax becomes discretionary and will be negotiated on a case-by-case basis.”
Ludwig expects the lawsuit to proceed up the judicial ladder.
“It needs to get to the (Idaho) Supreme Court,” Ludwig said.
The city has not stated its position on the lawsuit.
“The city is responding to the lawsuit,” Enourato said. “The city’s filing is currently pending.”
Jonas, however, in her community letter wrote: “Uncertain about the outcome of this case, and upon the advice of our legal counsel, we have been examining how best to continue working in partnership with developers while the lawsuit progresses and how we might achieve similar goals through different means.”
The ordinance must undergo three public readings before it is official. The first reading was March 6, the second reading is scheduled for March 20 and the City Council intends to waive a third meeting.
“We want to keep projects in the pipeline moving,” Enourato said.
Boise City Council member Scot Ludwig has sued the city of Ketchum over the affordable housing fees the city charges for development projects that exceed a certain size.
Ludwig got a charge of $840,000 from Ketchum in community housing in lieu of fees for his proposed three-story, 37,000-square-foot, condo-and-retail project at the corner of First Avenue and Fourth Street in downtown Ketchum. Ludwig, an attorney, is also a developer.
Ketchum’s floor area ratios and community housing ordinance enacted in 2006 decrees that developments within the community core district must build or pay a community housing fee if the project’s floor space exceeds the property’s square footage.
Ludwig’s property measures 16,500 square feet. His project has twice the square footage of his property. He has the option to deed-restrict 20 percent of this project as community housing or pay the $840,000 fee.
“I would do affordable housing at no profit to myself, but it’s an illegal tax,” said Ludwig, who filed suit Jan. 27. “It allocates the responsibility of affordable housing on individual property owners instead of the whole community, which is wrong.”
Ludwig cites two 2008 precedents in McCall and Sun Valley, where a judge threw out affordable housing ordinances because they amounted to an illegal tax. He said several Wood River Valley developers privately support him but haven’t wanted to challenge the Ketchum law themselves.
“My goal is to get the Idaho Supreme Court to tell us what we can and can’t do,” Ludwig said. “Is it an illegal tax or not?”
The city of Ketchum declined to answer questions from the Idaho Business Review, citing pending litigation.
“The city is in the course of reviewing the case and preparing a response and cannot comment at this time,” said Nampa attorney Matthew Johnson, a Nampa attorney at White Peterson who is representing the city of Ketchum.
Ludwig brought the case through a company called Asset Enhancement that he set up to develop the Ketchum property that he acquired through a foreclosure sale in September. He proposes about 20 “second home-type” condos, underground parking and a street-level art gallery.
“I knew about the ordinance and knew I would attack it,” said Ludwig, who opened a law office in Ketchum a year ago.
Ludwig alleges that the city’s ordinance takes private property without just compensation. He acknowledges that cities impose impact fees but he said affordable housing is not an authorized impact fee.
“My goal is three-fold,” he said. “I’m reducing taxes. I’m promoting economic development. I’m supporting private property rights.”
Construction and housing officials are waiting to see what impact the new Trump Administration has on the way they do business.
Affordable housing proponents have identified a few areas of concern: Potential cuts in Section 8 housing subsidies and operating fund proration for low rent public housing projects; the potential loss in investor appeal for low income housing tax credits; and further erosion of Community Development Block Grants.
“Virtually everything that has to do with the housing world is out there right now,” said Gerald Hunter, president of the Idaho Housing Finance Association. “We’re in a very interesting situation right now. There’s a lot of talk going on in speculation. I don’t know that anybody knows how things will shake out.”
The Idaho Associated General Contractors sees promise in President Trump’s plans to loosen regulations, particularly in the construction trades.
“The reports are that the Trump Administration is committed to taking a serious look at a wide set of regulations that affect our business,” said Wayne Hammon, executive director of the Idaho AGC. “That is a welcome change from the prior administration.”
The Idaho Housing & Finance Association funds many affordable housing projects. About 20 to 25 percent of those projects are largely supported by low-income housing tax Credits through U.S. Department of Housing and Urban Development. IHFA also provides financing for home ownership, rental housing and small businesses.
Hunter has an eye on the Trump Administration’s intentions with Fannie Mae and Freddie Mac, the nation’s largest mortgage holders that have been under government conservatorship since 2008. Trump has an appetite to privatize Fannie Mae and Freddie Mac.
“We need to figure out what to do with them,” Hunter said. “There seems to be a preference for the market to be funded in the private sector. That seems to be a common desire … I would like to see the private sector step into the mortgage finance sector.”
Hunter is less enthusiastic about the possible fate of housing tax credits, which are bonds funded by investors. He said in the past six months, the credits have lost value for investors with the anticipation that lowering corporate taxes would make other investments more attractive.
Deanna Watson, executive director of the Boise City/Ada County Housing Authority, which provides low-income housing, will seek low-income tax credits for construction of the $5.9 million 50-unit Sandhill Crane Apartments affordable housing in the summer near Whitewater Park Boulevard and for the Allenbaugh recovery-oriented housing.
“In the last two years, the value of a tax credit is $1.05 for every $1 invested,” Watson said. “The projections we are seeing now are closer to 85 to 90 cents. With a more favorable tax environment, (investors) don’t need to find ways to shelter funds.”
Watson is concerned about the fate of the level of federal housing assistance payments for low-income families, commonly known as Section 8 funding. The Boise/Ada housing authority subsidizes about 2,000 local families with $11 million in Section 8 funding each year. About 21 percent who qualify get funding, she said, leaving 8,000 families who qualify without the support.
Watson also wonders what could happen to HUD operating fund proration that her agency uses to operate the 93-unit Capitol Plaza and 67-unit Franklin Plaza low-income housing for the elderly and disabled.
“If the Fed cuts that, it has a significant effect on the housing and services we can provide for the elderly and disabled in those two towers,” Watson said. “I’ve heard predictions all across the board. I’ve heard cuts as low as 10 percent to 75 percent. These are the programs people go to when they go homeless.”
Watson often pairs low-income housing tax credits with HUD Community Development Block Grants, which serve to fill funding gaps. CDBG grants have been cut by 49 percent since 2000, according to the Center on Budget and Policy Priorities, a Washington, D.C., nonpartisan research and policy institute
“You need tax credits and CDBG grants to cobble something together that works (to fund affordable housing projects),” Watson said.
Hammon at Idaho AGC is more optimistic on the impact the Trump Administration could have on Occupational Safety and Health Administration regulations. He said in the last six or eight months of the Obama Administration, the enforcement arm of OSHA stepped up its enforcement and fines.
Prior to that, Hammon said, OSHA, the U.S. Environmental Protection Agency and the construction industry cooperated to provide a safe work environment.
“That cooperation shifted to an enforcement, gotcha approach,” Hammon said “I believe (the local OSHA office was) under pressure to give fines. Hopefully, they go back to doing what they are real good at: keeping everybody safe.”
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