Leland: Creation of a housing authority

This is the sixth column in the series detailing recommendations that came out of the City’s Housing and Economic Study developed by Leland Consulting. In this issue, I will discuss Leland’s suggestion to create a housing authority to support workforce and affordable housing in our community.

The first recommendation in Leland’s report is to create a multi-jurisdictional housing authority. The HA would be responsible for planning and securing funding, and developing a policy and program framework that can support housing affordability in the jurisdictions it serves. Ensuring housing for Sandpoint workers also supports economic stability and strength. Employers reported housing to be their greatest impediment to hiring and retaining workers when surveyed by the Mayor’s Housing Task Force.

In the report, Leland recognized that Sandpoint is unique in that it has a well-diversified economy with a healthy manufacturing sector and strong wages relative to other resort communities. It also acknowledged that, even with the significant wage increases that workers experienced over the last couple of years, increased pay is not enough to house most workers without being rent stressed. Prospective owners too in this environment may never have the opportunity to buy a home and take that fundamental step towards financial security- home ownership. This too impacts a family’s ability to take root in the community and fully participate as engaged citizens.

If we are to adequately house our workforce, we have to create a significant amount of housing that is priced where lower and median-income earners in Bonner County can afford it. Multifamily and missing middle housing offers a lower price point. But even that, without some kind of subsidy, is too expensive to build in today’s economy and meet the lower income earners with a product they can afford to rent or own.

An HA brings a number of tools to the task to support Sandpoint and the region to take advantage of public funding programs and to offer mechanisms to leverage existing resources. There are grants and tax credit financing programs offered through HUD, USDA and Idaho Finance and Housing Association. Developers and local agencies like Bonner Community Housing Agency (BCHA) or the HA can leverage these programs to bring down housing costs.

An HA, as a public entity, can purchase and sell land, can convey land with other public agencies and it can engage in public-private partnerships. Together, these powers enable an HA to facilitate developments in partnership with other public agencies, private businesses, or even independently.

There are many jurisdictions across the state and the country that have been successful in using these funding tools to create affordable and middle-market housing. There is a problem with most of these programs, however. The subsidy runs out after a period of time, typically 20 years, at which time the housing returns to market rate.

What if there was a way to permanently reduce the cost of housing? One way to do this is to permanently take the cost of land out of the equation. A community land trust is one way this is done. Another can be the HA.

The city and the city utility have considerable land resources that are underused. One such example is the 20 acres owned by the water utility on Woodland Dr. About an acre of the property is being used for a water storage tank and the Mickinnick trailhead.

The city utility could leverage these land resources by providing a long-term lease to a developer to build workforce housing. The HA could facilitate the partnership and oversee the project and ensure that the developer follows through with its commitment.

In this way, the cost of housing could be reduced by the cost of the land, say 20%. This cost reduction carries over to the renter or buyer and it can last into perpetuity, not eclipse in 20 years. Instead of paying millions of dollars for land, the developer could pay a modest annual lease rate that would support the water utility and the ratepayers. This would be a win-win for the workforce and the ratepayers and it would be a cheap solution to finding buildable land.

The city is currently taking steps to initiate a housing authority for this purpose. Neighboring cities, the county, and school district will be encouraged to join.

Shelby Rognstad is the mayor of Sandpoint. He can be reached at mayor@sandpointidaho.gov.