Getting Lost in the 50s: 1850, 1950 and 2050

We are closer to the year 2050 than we are to 1950. And the way the universe works, the future accelerates toward us, whereas the past drifts along slowly behind. There’s a more technical explanation of why this is so, but it involves taking up valuable space here with the Lorenz transformation, muons, and gravitational redshift. When The Daily Bee gives me a physics column, we can get into the quantum mechanics of time compression in more detail. Until then, here’s another way to understand this concept: we barely remember Christmas-past and we are totally surprised that July 4th is almost here.

This phenomenon affects the way we think about “community” and the shaping of our cities. We tend to idealize the past and yearn for the nostalgia of the 1950s American Dream, but ask the Kootenai and the Peigan Indian Tribes about the 1850s, when the only white man running around these parts was David Thompson, how the future came crashing into them. They did not get much opportunity to shape their destiny. But we do. I heard recently from one of the TV pundits that some of Mr. Donald Trump’s attraction to voters is that he promises a return to those ’50s days. Homogeneity in race, religion, shared values, demographics, a belief in suburbs and highway systems, and a certain kind of insulation/isolation from forces in the greater world beyond. That’s wistful and wishful thinking. What we really should be doing is looking clear-eyed and straight-thinking about our future.

The Economic Innovation Group (a bipartisan national think-tank) was established to research new business start-ups in rural communities. There has been a dramatic fall-off in the past ten years for new businesses; this can be explained partly by the 2008 economic melt-down, reluctance on the part of banks to finance small business growth, and the rise of big box retailers like Walmart and Costco, but more particularly troubling is a seismic shift in how and where opportunities are being created.

The growth that has occurred has been largely confined to a handful of large and innovative areas, including Silicon Valley, New York City, the Boston corridor, and parts of Texas, according to an analysis of Census Bureau data by the group:

“The concentration of start-up activity is unusual, economists say. In the early 1990s recovery, 125 counties in the nation combined to generate half the total new business establishments in the country. In this recovery, only 20 counties have generated half the growth. The data suggest highly populated areas are not adding start-ups faster now than they did in the past. They appear simply to be treading water — while rural areas have seen their business formation fall off a cliff.

“Fall off a cliff” is pretty dramatic, but how many times have you heard “Sandpoint/Bonner County is a wonderful place to live, and a difficult place to make a living?” We take that as an established fact of life, but that doesn’t necessarily have to be so. We need to figure this out well before 2050! Why is there so much vacancy in downtown Sandpoint? How will we as a community maintain essential services (plus deal with legacy obligations) from a property tax base that is growing more dependent on vacation homes and retirees? Recent Idaho tax policy initiatives shift more of the property tax burden on to commercial property, but is this sector healthy enough to carry that burden?

The city of Sandpoint’s Comprehensive Plan, which comes up for review this year, is supposed to be a forward-looking roadmap. But it assumed population growth rates that are not being achieved. These growth assumptions also dictated an enhanced level of civic infrastructure: are we now building roads, sewer systems, water treatment plants, and such for a city of 20,000 people while we are really only 8,000? And while we are stuck at the 8,000 people mark, we do not need more doctors, dentists, lawyers, real estate agents, hair salons and so on: hence the empty buildings. The vacancies are exacerbated by the relatively low levels of disposable income and new jobs.

If we want to attract younger families and an educated workforce, affordable housing is a key component. If this is considered a good thing, are we placing roadblocks in the way? The city of Sandpoint collects certain charges for the development of new residential lots. The charges are relatively fixed, that is, these apply whether it is a starter home lot or a luxury residence lot. These impact fees, development cost charges, utility connection fees, and engineering review fees are in addition to the sidewalks, curb and gutter, storm water management, and on-site roads that must also be constructed before the first lot is developed. The upfront costs are often two or three times the price of the raw dirt. This creates a bias toward building larger and more expensive homes. Federal regulations for mortgage lenders limit loan underwriting to 43 percent of household debt, but that level of affordable home cannot be built here under these current conditions. And a healthy housing market is fueled by the starter home owners moving up as they go through their earning years, so when they cannot step up, the vacation home-buyer and retiree are the default option. Demographic segmentation/concentration happens slowly, one home at a time, but it is inexorable: we will wake up with that time compression headache and wonder how did we get here?

Our demise probably will not be as final as the 1850s Native Americans, but the more we try to re-create the 1950s, the less prepared we are for the real challenges of the 2050s.

Raphael Barta is an Associate Broker with Century 21 Riverstone in Sandpoint. He is the vice president for The Idaho Realtors. Any questions/comments to raphaelb@sandpoint.com.