September 15, 2020
RE: University Park Development
To City of Sandpoint:
Bonner Community Housing Agency (BCHA) is a local nonprofit housing developer whose mission is to develop and advocate for local workforce housing. Over the past 10 years, BCHA has assisted over 20 families in participating in the foundation of the American dream, homeownership. BCHA has focused its energies on assisting those families in our county that make less than 80% of the Area Median Income.
We believe that there must be a laser focus on building and providing ways for homes to be purchased that meet the livable wages here in Sandpoint. We know that there are many moving pieces, and we hope that the city would consider a strong focus on housing that can be purchased by local families that live and work here but are unable to buy at this time. When homeownership is forgotten in how a city is planning to grow, only rental housing growth can supplement those needs, and families are effectively locked out of the opportunity to take that critical first step in generating a legacy in our community.
Based on the most recent US Census Bureau data for the City of Sandpoint, the median income is $41,385. According to HUD’s income guidelines, over half of the city’s population qualifies for federal and state-sponsored affordable housing assistance. With the increase of retirees with investment income coming into the community in large numbers, the actual income totals are decreasing regionally.
Principles like supply and demand promote an increased need for housing supply in the City of Sandpoint. Without an increased supply of affordable units to buy, the trend toward high-end resort living will continue to multiply. Local workers like teachers, manufacturing and retail workers, and service industry professionals will no longer be able to afford to own their home near their work or local services.
This need has been on the horizon for well over 20 years, and there have been some efforts from the city to help, but concepts like NIMBY (not in my backyard) and a lack of long-term planning have made homeownership out of reach for many. Actions like Accessory Dwelling Unit increases as well as reducing lot sizes have helped, yet these efforts mostly benefit current homeowners. For there to be a sizable shift in affordability, more units must become available for purchase to push against the high-pressured real estate market, specifically to benefit local first-time and primary-residence homeownership.
Where are we now?
Based on a year-to-year comparison of the Selkirk MLS data for Sandpoint (including all housing types), from August 2019 to August 2020, the average sale price increased 12%, from $403,652 to $450,623. The Median Sale price jumped 14% from $330,000 to $375,000. Currently, according to HUD’s price limits for families earning less than 80% of the Area Median Income, more than 50% of the City of Sandpoint population qualifies for a maximum of $256,000 in home purchase capacity.
According to HUD, the median price in Sandpoint is $119,000 greater than the most affordable price. The average sales price is nearly $200,000 higher than an affordable price. Translated into a monthly payment, the affordable mortgage is roughly $1,400/month for working families vs. $2,100/month for the average home.
The people that are priced out of the market now are people that currently live and work in our community and are unable to purchase homes. Currently, there are no listings in the Selkirk MLS for the City of Sandpoint that would qualify for a family that meets affordability criteria based on income.
The University Park Development
Considering the current environment, we strongly support the addition of the proposed units at the University Park property based on the fact that nearly one-fourth of the units are geared to be as low cost as possible in reduced lot sizes. Those lots very well may not qualify for HUD affordability considering the fees, infrastructure costs, and other items the city has proposed this project absorb. According to the developer, those units are currently aimed to reach a price point between $280,000 and $300,000. Since the city has made workforce housing a priority, projects like this should require less financial demand than more.
In order to provide affordable units for local families, BCHA strongly recommends that the city of Sandpoint not add more infrastructure costs to projects like the University Park Development. Those additional costs unfairly pressure the per-unit price of each home higher than it already is. We also advocate for a reduction in New User Facility Fees and Impact Fees for homes that are built and priced specifically to serve first-time home buyers and primary-residence families who fall below the HUD’s HOME Program income limits for our region.
What can we do?
For those houses that are close to making the affordability mark, the City could be the deciding factor for families working at Litehouse, Kochava, LPOSD, and our many great retail shops and restaurants. We ask that the city consider developing language and benchmarks with benefits for those developers that are willing to assist in creating and implementing affordable home ownership initiatives.
Partnerships with organizations like BCHA, who are part of HUD’s Community Planning and Development, and an Idaho Housing and Finance Association designated Community Housing Development Organization, can help bring clarity to the development process. BCHA can assist the city and the developer to ensure the best products and pricing within the desired criteria for affordability.
We know that as the city nears its closure of the Comprehensive Planning process many things are shifting and may change soon. We want to make sure that the City of Sandpoint is assisting in affordable housing and encourages more affordable home ownership. We ask that the Planning and Zoning Commission take relevant steps to further opportunities allowing the City of Sandpoint return to a vibrant town for young families to own their homes and build their legacy here.
BCHA supports the proposed University Park Development and we ask that the process be streamlined without adding any unnecessary infrastructure costs that can increase pricing. We hope that the process can move quickly. We have moved past the point of providing any units for purchase to over half the population who live, work, and raise their families here. We need more supply for those who cannot currently afford to own here.