The Last Word
Housing Crisis Looms in the Midst of Prosperity
The economies of Utah and Idaho are arguably the strongest in the country — not bad for a couple of landlocked western states with relatively small populations. Both states are great places for anyone looking for a job, seeking to upgrade employment, start a business or support a family.
Part of their economic strength comes from the robust population growth in both places. The states have ranked Nos. 1 and 2 in the nation, sometimes alternating, in job and population growth.
Both have expansive rural areas that unfortunately aren’t fully sharing in the economic boom. The metro areas are booming; however, including Utah’s Wasatch Front, Wasatch Back and Washington County, and Idaho’s Boise, Idaho Falls and Twin Falls areas, plus Coeur d’Alene.
Some challenges of rapid growth and strong economies are that housing is in short supply in the metro areas of both states and prices are rising for renters and homebuyers.
One interesting indication of Idaho’s hot housing market is that Nampa and Boise are the No. 2 and 3 best cities in the nation to flip houses, according to a recent study by WalletHub. The study included 172 cities, including the 150 most populated cities in the U.S. A hot “flipping” market means that housing is in great demand, and prices are rising.
Huffington Post recently noted that “Boise is, by some measures, the fastest-growing city in America. It added 3 percent to its population last year ... driven by a booming, diversified economy and an influx of skilled, educated young people. But Boise isn’t adding homes fast enough to keep up.” And when shortages occur, prices go up.
In Utah, a Gardner Policy Institute study showed dramatic population growth with home prices rising rapidly and a large housing deficit.
The Salt Lake County median home sale price was $210,000 in 2011, compared to $325,000 in 2017. The homeownership rate dropped 5 percentage points from 2008 to 2016, and shortages are expected to continue for at least three to four years.
Economic development experts worry that housing shortages and high costs could slow the region’s robust economies. If employees can’t find affordable housing, they will go elsewhere.
Commuting from more rural areas isn’t the solution because it creates sprawl and transportation congestion. Policymakers in both Utah and Idaho are concerned about housing and looking for solutions. Low-income housing is especially a problem. Subsidies are critical or low-wage workers cannot afford apartments.
Adding to the problem is the high price of construction costs. Both states enjoy low unemployment rates, which means homebuilders are struggling to find skilled workers.
Some local governments are boosting permits and impact fees so that utilities and other services can keep up with growth. Some zoning regulations discourage multifamily and high-density housing, which also contributes to the problem.
We won’t solve the housing crisis quickly. But we need to take action to improve housing availability and affordability over the long term.
Our education and training systems must encourage more young people to engage in training programs that qualify them for good construction industry jobs.
Local housing policies, including zoning, ordinances and impact fees, must be updated to allow diversity of housing projects and prices.
Our citizens love living in Idaho and Utah, and enjoy a great quality of life. But we must work hard to ensure the dream of home ownership remains attainable.