Table of Contents        (Downloadable .doc version)

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Introduction 

Purpose of the Study 

This report provides the information needed to develop a plan of action for providing affordable community housing in adequate amounts to support a sustainable economy in Valley County and Adams County, Idaho.  It can be used to plan, finance and develop community housing – both rental and ownership opportunities targeting residents with income levels not served by the private market.   

This assessment of the community housing needs examines factors that impact both the supply and demand for housing.   It considers current market conditions and how they have changed in recent years.  It includes estimates of the unmet demand in 2005 for community housing generated by recent development and projections of demand that can be expected in the future. 

The study provides information separately for each county and municipality that can be used to tailor strategies and projects to meet the unique needs of each area.  It provides baseline data that can be updated regularly to monitor how market conditions and housing needs change over time and evaluate progress toward meeting agreed upon goals.

In addition, this study can be used to: 

·    Facilitate partnerships between public- and private-sector organizations to create housing that is suitable and affordable for different population groups; 

·    Obtain construction and permanent financing from private, federal and state lending institutions that require demographic and market information to support grant and loan applications; 

·    Plan for future community housing impacts associated with anticipated commercial and residential growth; 

·    Modify land use regulations and development codes to provide both incentives and mandates for community housing; and,  

·    Support various other planning-related projects that can benefit from the availability of up-to-date data including transportation studies, environmental impact statements, school expansions, and parks/recreation plans. 

Acknowledgments 

This study was funded by contributions from Valley County, McCall, Donnelly, Cascade, Adams County, Council and New Meadows.  The Valley County Economic Development Council assisted with data collection and oversight of the project.   Appreciation is extended for the numerous hours contributed by public officials, city and county staff, employers, realtors, lenders, builders, non-profit groups, state and federal agencies, and concerned citizens. 

Organization of the Report 

This report has 11 sections as follows: 

I.                     Key Findings – A brief synopsis of the key conclusions generated by this study and recommendations on how to address identified housing problems. 

II.                   Demographic Overview -- A quantitative demographic summary on the household population including number, size, composition, age and income. 

III.                  The Economy – Information on jobs, seasonality in employment, jobs by industrial sector, wages, and employment problems related to housing. 

IV.                Housing Inventory – Information on the supply of housing units in the region including number, type, location, occupancy and tenure. 

V.                  Market Overview – An analysis of current rental and ownership housing market conditions and change in housing costs since 2000.   

VI.                Community Housing –  A comparison of the demand for community housing relative to its supply taking into consideration housing that is now affordable for owners and renters by location and type and future development of housing for employees.   

VII.               Special Needs Populations – Information on the number of persons with special needs and the housing-related services and facilities provided by non-profit agencies.  

VIII.             Development Trends and Forecasts -- Information on residential and commercial development. 

IX.                Community Housing Demand – Quantitative estimates of the number of community housing units now needed and how that number may change in the future. 

X.                  Barriers to Community Housing – An assessment of a wide variety of barriers that might be faced by those who need community housing and those that attempt to provide it for them.   

XI.                Conclusions and Recommendations – A summary of conclusions generated by the study and recommendations to address the identified housing needs that are responsive to opportunities in the area.  

This report is supplemented by profiles on each municipality and both counties with 2000 Census data on households and housing, a comparison of key indicators from 1990 and 2000, income estimates for 2005 and employment figures for 2000 through 2004. While these individual community profiles provide baseline data against which change can be measured, growth since 2003 has been so rapid compared to historical levels that trends between 1990 and 2000 do not adequately reflect current conditions.  The profiles should therefore be interpreted with the information on changes since 2003 contained in the main report.

Sources and Methodology 

This study incorporates information obtained from more than 50 key informant interviews and the following sources: 

·    1990 and 2000 Census, plus CHAS special tabulations and 2003 Census population estimates for both counties and all municipalities; 

·    2005 Idaho Power population estimates for Adams and Valley counties; 

·    2005 Area Median Income estimates for Adams and Valley counties published by the Department of Housing and Urban Development; 

·    Employment estimates and forecasts provided by the Idaho Department of Commerce and Labor; 

·    Job and labor force estimates from the US Bureau of Economic Analysis; 

·    Building permit data from the Adams County and Valley County building departments; 

·    Subdivision data from the County Assessors in both counties; 

·    Real estate sales data from the Mountain Central MLS; 

·    Rental notice records from the Star News in McCall; and, 

·    Data bases on commercial and residential job generation rates created by The Housing Collaborative, of which Rees Consulting, Inc. is a member. 

A list of the persons interviewed as part of this study is contained in the appendix. 

Terminology 

·    Community Housing -- This general term is used to describe residential units that are occupied by employees and other residents as their primary home, are affordable for low- to moderate-income households and have restrictions that will preserve affordability into the future.   As specific housing policies and programs are developed, the term should be more defined to target specific income levels measured as a percentage of the AMI Occupant eligibility and deed restrictions will be required to ensure affordability over time. 

·    Affordable Housing – Housing is affordable when the rent or mortgage payment does not exceed 30% of the households’ gross income. 

·    Disability -- A long-lasting physical, mental, or emotional condition. This condition can make it difficult for a person to do activities such as walking, climbing stairs, dressing, bathing, learning, or remembering. This condition can also impede a person from being able to go outside the home alone or to work at a job or business. 

·    AMI – An abbreviation for the area median income, which is estimated annually by the Department of Housing and Urban Development (HUD) for each county.  HUD publishes income estimates as a percentage of the median by household size.
 

I. Key Findings 

There is clearly a shortage of both rental housing and homes available for purchase in Valley and Adams counties at prices affordable for housing for low- to moderate- income households and an inadequate supply of units available for middle-income families.  This deficiency is resulting in a labor shortage that reduces the economic benefits the region is receiving from growth.  The lack of housing will be an impediment to economic sustainability unless development of affordable units catches up and keeps up with job-generating growth. 

Evidence of the housing shortage includes:
 

·    Rapidly increasing housing prices.  Rents have increased roughly 35% to 50% since 2000.   The median prices of homes currently listed for sale are 48% to 116% higher than the median prices of homes sold in 2004.   

·    Limited availability.  Rental vacancies are negligible.  All apartment projects are maintaining wait lists for units as they become available.  The inventory of homes available for purchase is small; it is a seller’s market where purchase prices are close to, equal or even exceed list prices. 

·    Unfilled jobs.  Most of the employers that were interviewed report that they have been unable to fill jobs directly as a result of housing.  Employers are finding it necessary to provide housing for employees in order to attract and retain employees. 

·    Housing is not affordable for many residents.  Approximately 1,470 households in the two-county region spend more than 30% of their gross income on their housing payment. 

·    Housing costs that are higher than affordable for the typical household.   Purchase prices are generally above $150,000, which is the most that households with incomes at 100% of the median (AMI) can afford.  The median price in 2004 was close to $200,000 in McCall and New Meadows and over $150,000 in all areas except Cascade and Council.  While rents are now generally affordable for households with incomes at or below 80% AMI, they are too high for renters with incomes at 50% AMI.    

·    Mobile home parks are disappearing and RV parks are being used to house employees. 

Changing demographic characteristics will impact housing needs in the future.   

·    There will be an increase in unrelated roommate households. 

·    The Hispanic population will grow creating a need for rental housing with three or more bedrooms priced to be affordable for families with extremely low incomes.

 ·    The relatively large senior population will also grow in the future generating high levels of demand for services and housing for employees that provide those services.   At the same time, seniors will compete with employees for housing. 

·    Incomes will increase but the percentage of households with low incomes (approximately 40% of all households in 2000 or an estimated 2,080 households in 2005) will probably not decrease.   

·    The homeownership rate will likely decrease as proportionately more households are unable to purchase and therefore must rent. 

Job-generating development, both residential and commercial, that started in early 2004 is fueling the demand for housing yet the private market has not responded by producing a sufficient supply of units priced to be affordable for employees.   

·    Building permits were issued for nearly 1,800 new residential units between 2000 and May 2005.  This equates to an increase in housing units of approximately 18% since the 2000 Census was conducted.   

·    In 2004, permits were issued for 531 new residential units in Valley County, which is more than three times the number issued in 2000.   

·    The labor shortage is impacting all sectors, from restaurants and retail to education and medical care.  Employers report that all types of employees at all levels are having difficulty finding housing. 

·    The greatest increase in employment has been in the construction industry with roughly 700 to 1,000 construction workers in the region during the peak summer season.  Roughly 80% to 90% are from outside of the region and compete with lower-wage employees for housing.   

·    Growth and construction will not end when Tamarack is fully built out.  Ample land is available in the rest of the region for development to continue into the foreseeable future.  The total number of lots approved but vacant and available for development in Valley County could easily exceed 10,000 before the end of the year. 

In order to address the housing shortage, construction of new units specifically targeting low- to middle-income households will be required.   

·    Based on development that has occurred since 2003, new permanent jobs have generated demand for approximately 210 housing units.  Of these, 145 units or 69% should be affordable for low- and moderate-income households and 65 units or 31% should be target households with incomes at or above the median.  These estimates do not include permanent or temporary housing needed for construction workers. 

·    If growth continues at the same level as in 2004 and the first five months of 2005, approximately 200 additional units will be needed in the next two years.  

·    Based solely on the number of applications on wait lists the number of seniors occupying low-income family apartments, 35 to 40 additional rental units for low-income seniors are needed at this time.   

·    At least 45% of the new residential units in Valley County and 60% of the homes that will be constructed in Adams County should be occupied by residents rather than used as seasonal/vacation homes. 

·    Of these primary homes, 40% of new units should be affordable for low-income households ( 80% AMI) and 21% should be affordable for moderate- to middle-income households (80% to 120% AMI).   

Barriers to the development of community housing will be encountered including: 

·    Zoning which does not allow densities greater than four units per acre on most land served by central water and sewer systems and makes construction of housing other than single-family homes difficult;

·    Public perceptions that government should not be involved in housing and that community housing will have negative impacts on property values andneighborhoods; 

·    Limited sewage treatment capacity; and, 

·    Lack of local funding, expertise and capacity to coordinate and implement community housing efforts.

In order to provide a variety of housing opportunities affordable for low- to middle-income employees and persons with special needs including seniors, a combination of tools and techniques will be required.  A multi-faceted strategy is needed to address affordable housing comprehensively and equitably in a manner that is both legally defensible and acceptable to the community.  Highly effective affordable housing strategies depend upon the involvement and cooperation of the private sector, local and county governments, employers, non-profit agencies, a local housing authority and residents themselves.  The responsibility and burden for providing affordable housing should be widely shared.  The following specific recommendations are offered:

·    Create local capacity possibly through a housing authority to address current and ongoing housing needs.

·    Implement inclusionary zoning requirements requiring new subdivisions to provide for a range of housing types and prices.

·    Implement commercial and residential linkage programs that make new development responsible for at least partially addressing the need for housing directly generated by it.

·    Facilitate/encourage the development of permanently-affordable, mixed-income rental housing for year-round residents in small projects, first in Donnelly and McCall then in other communities as growth continues.

·    Work with Tamarack and construction contractors to provide housing that is designed specifically for seasonal employees including resort and construction workers.

·    Facilitate/encourage the development of entry-level homeownership opportunities in both Adams and Valley counties that is deed restricted for permanent affordability.

·    Encourage non-profit housing organizations to develop housing and expand housing programs in the area.

·    Provide City and County general funds for housing or establish a local source of revenue specifically for community housing since new development can not be required to address existing housing deficiencies.

·    Provide publicly-owned land for community housing projects.

·    Improve local record keeping systems to monitor development activity, calculate the housing demand generated by this development, assess changes in the housing supply, identify trends and evaluate progress toward meeting housing-related goals. 

·    Modify Comprehensive Plans to provide vision, explicit goals and quantitative objectives for community housing.  Amend zoning and development codes to include incentives for community housing development. 

·    Address public perceptions about community housing in a proactive manner. 

·    Require that community housing be provided as part of all annexations.

·    Provide permanent housing for construction workers and their families to more fully reap the economic benefits of the construction boom.

·    Develop mobile home parks since additional residents of existing parks will likely be displaced in the future.  

·    Develop a homebuyer education/counseling program so that employees can qualify to purchase homes that are developed.

·    Assist non-profits to provide emergency shelter and transitional housing for victims of domestic violence, and include units targeted for persons with special needs in all community housing projects.

·    Develop rental housing for low-income seniors and explore other housing options for retirees that will reduce the extent to which they compete with employees for housing.

II. Demographic Overview

This section of the report examines the household population in the two-county region and demographic characteristics relevant to the understanding of housing needs in the area.  It introduces key measurements that are used throughout the remainder of the report to qualify housing needs and examine how they might change in the future.

Population estimates have been generated for 2005 using a combination of sources.   The 2000 Census is the data source for demographic characteristics since there are no sources of more up-to-date information.  These characteristics tend to change slowly.  For example, the age distribution of the population shifts over time but in small increments.  As such, the data from 2000 should still well represent the residents of Valley and Adams counties.

Number of Persons

At least 12,125 persons now reside in the two counties.  Just over 70% of the region’s population lives in Valley County.  In both counties, the majority of the population lives in rural unincorporated areas.  Only 21% of Adams County’s residents and 43% of Valley County’s citizens live in one of the incorporated municipalities.  The region’s two largest cities are in Valley County -- McCall is the largest with nearly 21% of the region’s population followed by Cascade where about 9% of the region’s residents live.   Donnelly is the smallest with fewer than 150 residents. 

Population Estimates

Sources:  1990 and 2000 Census; Idaho Power (2005 estimates for Adams and Valley County); 2005 estimates for cities projected forward from 2003 Census estimates and correlated with 2005 Idaho Power county estimates.

It should be noted that there are no recent estimates available on the number of persons residing in each city.  None of the municipal governments or the State of Idaho publishes up-to-date population estimates at the city level.  In order to generate the population estimates for 2005 provided in the preceding table, a combination of Census and Idaho Power data were used.  This methodology likely understates the number of persons now residing in the region.  It will take time for the Census and Idaho Power to adjust their estimates given the surge in building activity in the area since 1993.  It is acknowledged that these estimates are not accurate, particularly in the case of Council and New Meadows where the Census estimates for 2003 showed a decline from 2000.

Even though it is likely that the population estimates are low since they do not take into account the very recent growth that has occurred in the region, it is still appropriate to use them for certain purposes provided that it is recognized that the resulting figures probably understate the situation.  The analysis of unmet housing demand contained later in this report is not based in any way on these population figures but rather is calculated by using job generation rates applied to development since 2003.. 

Number of Households

Analysis of housing demand and needs is not based on individuals but rather households.  While some of these households consist of only one person living alone, most have multiple members.  There are at least 5,266 households in the two-county region, with 71% residing in Valley County. 

Household Population Estimates

Sources:  1990 and 2000 Census; 2005 estimates equal the population in 2005 divided by the projected 2005 household size.

Household Size

The average size of households declined throughout the two-county region between 1990 and 2000 as was generally the case throughout the nation.  Households in the McCall area are smaller than in the rest of the region while Donnelly and New Meadows, the closest communities to McCall, have the largest households, on average.   This suggests that singles are attracted to McCall whereas most of the households in its neighboring communities are families.

Average Household Size Estimates

Sources:  1990 and 2000 Census; 2005 estimates assume that the average household size changed at the same yearly rate between 2000 and 2005 as between 1990 and 2000.

Renter households are often smaller than owner households since many young, single persons rent then purchase a home when they start a family.  This is the situation in McCall, Cascade and Council but, in New Meadows, Donnelly and Adams County as a whole, the average size of renter households is larger than owner households.   This is an indication that many renters are families.

Household Size by Own/Rent

Source: 2000 Census

In communities where rental availability is limited and rents are high, unrelated roommates are forced to live together and the size of renter households increases.  By the time that the 2010 Census is conducted, the average size of renter households will likely be larger.

Household Composition

Most of the households in the two-county region are related families.  In most communities except Donnelly and McCall, more than half of all households are married couples, both with and without children.  In Adams County and Valley County, 9.2% of the households are single-parent families.  The percentage of single-parent families is higher in all of the incorporated communities.  It is highest in Cascade where nearly 16% of all households have children and only one parent present.  Single-parent families tend to have the greatest difficulty of all types of households finding housing that is affordable given their income.

Household Composition

Source: 2000 Census

There are relatively few roommate households in the region – 4% in Adams County and 5% in Valley County.  The percentage is only slightly higher among renter households (8% in 2000) even though most roommate households rent.  This will change, however, as limited housing availability and rising costs force unrelated individuals to live together.  The percentage of persons who live alone should decrease over time.

Household Composition, Renter Households

Source: 2000 Census

Race/Ethnicity 

There were few racial/ethnic minorities living in the region in 2000.  Less than 2% of households had a Hispanic or Latino householder.  The percentage was slightly higher in Valley County than in Adams County.  The remodeling of the Whitetail Lodge in the late 1990’s was the first large project to import Hispanic workers from outside of the region.  Since then, the number of jobs held by Hispanics has been increasing according to the Job Service Office but is still probably under 5%.  Obtaining accurate estimates in the future on the Hispanic population will be difficult due to the immigration status of some workers.

 Households by Race/Ethnicity 

Source: 2000 Census 

The percentage of households with a Hispanic/Latino householder will likely continue to increase based on trends in other western mountain resort counties.  For example, the percentage of Hispanic households is 6.5% in Blaine County, Idaho and 14.4% in Eagle County, Colorado (where Vail is located).  This increase will affect the type of housing needed to accommodate the workforce.  Since Hispanics have larger families, they need units with multiple bedrooms; however, since they typically hold the lowest-wage positions, they are only able to afford very low cost housing and will sacrifice size in order to pay less in rent.  The overcrowding that results negatively impacts neighbors, particularly in high-density developments.  Rental housing with three or more bedrooms with townhome-style designs and priced to be affordable for families with incomes at or below 30% AMI have been very successful in other communities.

Age

Valley County has a younger population than Adams County.  Approximately 59% of the households in Valley County have a householder age 54 or younger whereas 53% of the households in Adams County are headed by a householder in this age group. 

Age Distribution – Adams and Valley Counties Compared

Source: 2000 Census

Both counties have a relatively high proportion of seniors.  Nearly 26% of the households in Adams County and 23% in Valley County have a householder age 65 or older.  This compares with 20% for the state of Idaho and 12% for Blaine County.  Having a high percentage of seniors relative to employee households has implications on the need for community housing, which are presented in the Special Needs section of this report.

Age Distribution by Location

Source: 2000 Census

Income

The 2000 Census measured household incomes in 1999.  At that time, the median household income ranged from around $24,000 in Council to nearly $37,000 per year in McCall and Valley County as a whole.

Median Incomes in 1999

Source: 2000 Census

Every year, the US Department of Housing and Urban Development (HUD) publishes county level median income estimates for four-person families.  These estimates are then used to adjust the income levels that can be served by Federal housing subsidy programs.  According to HUD, the median family income in Valley County increased nearly 40% between 1999 and 2005. It increased at a higher rate in Adams County – over 42%.

Change in Median Family Income, 1999 – 2005

Source: 2000 Census and HUD

Incomes will likely continue to rise in the area due to a combination of factors:

·    Wages increase because of labor shortages;

·    In migration of upper-income households seeking a resort lifestyle; and,

·    Increases in incomes of persons employed in real estate development and sales.

As shown on the following table, western mountain counties with destination ski resorts typically have very high median family incomes, typically above $70,000 in 2005.

Median Family Income Comparison

Source: HUD

Incomes are higher in Valley County than in Adams County.  Households living in unincorporated Valley County and in McCall have the highest median incomes in the region.  Households in Council have the lowest incomes.  The difference between the two counties is decreasing, however, based on HUD median family income estimates.

Median Household Income in 1999

Source: 2000 Census

The following graph illustrates the distribution of incomes in both counties.  There are more households in the middle of the range than at either end.  Over time, the middle class should decline relative to both lower-income and higher-income households.  With the creation of new low-wage retail and service positions, there will be proportionately more low-income households.  Although wages will rise at all levels due to the labor shortage causing the median income to increase, the percentage of households with incomes below 80% AMI will probably also increase.  The percentage of upper-income households is also likely to increase with wealthy retirees and investors attracted to the region for the resort lifestyle, and increased business opportunities in the area, particularly in real estate investment and development.

Income Distribution, 2000

Source: 2000 Census

Homeowners have considerably higher incomes than renters.  In 1999, approximately one-third of renter households had annual gross incomes of $15,000 or less.  Nearly 30%, however, had incomes of $35,000 or more.  This indicates that mixed income rental housing would be more appropriate than rentals serving only very low income households. 
 

Income Distribution by Own/Rent

Source: 2000 Census

Community housing programs typically base their income targets on a percentage of the area median income (AMI).  These percentages are used to segment the market by income into categories or classifications that are used to finance and deed restrict units for the populations most in need or least served by the free market.   While incomes change each year in absolute terms, the relative distribution within each percentile of the AMI tends to change slowly. 

Income Classifications

 Households with incomes equal to or less than 80% AMI are considered to have low incomes and are typically the target of publicly-provided housing subsidies.  In high cost communities, however, households with incomes in the moderate and middle income ranges are often not able to afford to purchase homes and may not even be able to afford market rents. 

The AMI estimates published each year by the Department of Housing and Urban Development (HUD) are adjusted for household size.   For example, the low income maximums (≤80% AMI) in Valley County equal $31,950 for two-person households and $39,900 for a household with four members.

Income Amounts by Percentage of Area Median Income

Source: HUD

In the two counties combined, approximately 40% of all households have low incomes.  This equates to a 2005 estimate of 2,080 households with incomes equal to or less than 80% AMI.  Just over half of these households have very low or extremely low incomes.

Income by AMI, Valley and Adams Counties Combined

Source: 2000 Census

Adams County has proportionately more low-income households than Valley County (48% compared to 36%) although in absolute terms, there are more low-income households in Valley County (1,359) than in Adams County (719).

Households by AMI, Adams and Valley Counties Compared

Source: 2000 Census

The following table provides detailed estimates on households by AMI and own/rent for each county.  This information will be needed to plan community housing projects and programs that target specific income groups. 

Households by AMI

Source: 2000 Census and Rees Consulting, Inc. calculations

Income figures can be translated into affordable rents and purchase prices.  First, the amount that is affordable for each income category is determined based on 30% of gross income equaling the monthly affordable housing payment.  For example, in Valley County, a low-income family of three can afford a housing payment of up to $899 per month. 

Affordable Housing Payment