Teton County, Idaho Archives - Page 12 of 27

Affordable Housing Crisis

February 12, 2019 By Tayson Rockefeller Leave a Comment

After attending a routine affordable housing meeting at the Teton County courthouse yesterday, I thought I would follow up and share my view with my readers.

Back in 2014 a survey was taken to determine the extent of affordability problems for housing and the local workforce. It of course showed that housing is difficult to find, is too expensive for the workforce, and that overall living conditions were crowded and less than ideal (all true). Regardless, at the time, I felt like the information was retrieved with a small portion of frustrated tenants. I now feel like the information is probably outdated. I would anticipate the average income has increased, but so have rents. The report also seems to mesh affordable home ownership and lack of affordable rentals, a big difference as pointed out by a commenter in yesterday’s meeting.

Now that you have an overview and understanding of the problem, the question becomes, what is the solution? Build affordable homes both for rent, and for sale. There are two problems that I can see with this tactic.

1) Obvious. Who pays for it? Construction costs exceed the necessary cost to complete a home that will ultimately be affordable, and if it were affordable, who pays for it? I suppose it would be an easier proposition for a developer and investor at that point, however.

2) At the meeting, I played devil’s advocate and brought up the second concern. What is the housing crisis is not as bad as we think it is, we find a way to build the necessary supply ***side note, one commenter mentioned the number of needed units to be in excess of SIX HUNDRED units*** at which point we create a localized bubble and oversupply of homes for purchase and homes for rent. This could have a lasting negative impact on existing homeowners who rely on rental income for their investment. I also mentioned that being in both the real estate and property management business, I did not believe that this number was accurate based on the business that comes through my door. This comment was brushed aside as inaccurate data that could not be measured based on my experience as a business owner, and that they would rather rely on the 5 year old report.

I should note that despite the problems, there was also another issue being discussed during the meeting that according to their analysis was exacerbating the problem. That is short-term rentals. They said that because of the increasing number of short-term rentals, we are taking away from affordable housing supply. I commented that I felt short-term rentals, or even higher quality long-term rentals have very little to do with affordable housing. Affordable housing does not make a great short-term rental, and a second homeowner or investor (or someone who owns a home and moved out of the area) are not going to forego higher rents to help solve an affordable housing crisis. I mentioned this, because it was brought up as part of the solution, which is what I’ll discuss next.

SOLUTIONS: No one at the meeting was threatening to restrict short-term rentals to strong-arm homeowners into renting on a long-term basis, hopefully an affordable one. I believe it was being discussed because of the lack of owners not operating a legitimate rental and paying their proportionate share of local city taxes. I suppose it could be argued that these taxes could help support a housing authority for low-income housing, but I believe this is a totally separate issue that should not be a part of the discussion at hand because it’s simply creates tension with those who are pro-property right and or own a short-term rental, further convoluting the issue at hand.

Even if the local government were to capitalize on tax income to help support the problem, it certainly doesn’t solve it. Another potential solution was to create deed restricted housing that could only be used for low-income purposes. This does help solve one of my two concerns above, that it could create an oversupply problem. If the units are restricted to a certain group of people who actually need the product, both for sale and for rent, it isolates itself and will likely have less impact on market priced homes. It may, in part, help with the second major problem, funding. If these units are restricted to low-income use, it may be feasible that there are available grants to help fund the project.

With the above being said, taxation and grants don’t solve the elephant in the room of funding a project like this in a market where construction costs are exceedingly high. However, discussions are a start. I just think it needs to be an approach that addresses all of the issues, including potential negative impacts. It also needs to be a solution that can be bipartisan from a political standpoint. That may seem silly in a small community like this, but I heard two very clear voices during the meeting. One stated that regulation of short-term rentals, of property rights, and taxation are not the solution to the problem. Another stated that we live in a community with many second homeowners, and even multiple homeowners. I believe the commenter’s exact words were that a person who owns their 7th home needs to participate in funding the problem. While I have no political agenda, I can see the handwriting on the wall. One commenter got it right, he said that both locals who have been here for generations, second homeowners, and even the workforce are here for one primary reason, and that is the opportunity to live in one of the most beautiful places on Earth, with it’s unique sense of community. We all want to preserve that. However, it relies, in part, on the workforce who needs this housing. The 7th homeowner needs those services, and the commenter believes that many of them will take steps to help ensure it remains this ways for generations to come, even if that means providing financial assistance.

If we can find a way to approach this without battling conservative State legislature which is in place to promote property rights, and without creating future problems for ourselves, while supporting a problem that we all can recognize, we should absolutely try. It to happen efficiently, effectively, and it needs to be based on real time, accurate data.

November ’18 Market Stats

December 16, 2018 By Tayson Rockefeller Leave a Comment

For November 2018’s Teton Market Update, I compared Teton Valley sales stats compared to November of 2017. In a nutshell, sales are down 24% from one year ago, while dollar volume is only down 18%. My interpretation of this was that supply remains low, which is driving prices up. This is consistent with the data for 2018 vs 2017, the average sales price in Nov. ’18 was around 350k, while Nov. ’17 was about 5% less. Sales volume is down due to inventory levels (as mentioned) which is likely because of high construction costs, which has been the trend for the past few years.

Victor, ID seems to be building a healthy supply, so we’ll see if these numbers switch places in the coming months.

Where are we relative to 2007?

November 1, 2018 By Tayson Rockefeller Leave a Comment

Being a real estate agent and a small-time real estate investor, not only do I closely watch localized trends, but also pay attention to National trends. I pay attention to articles about things that can impact the housing market, and I try to interpret how they will trickle down to my local market. Lately I have began seeing comparisons of home prices at the peak of our last boom compared to now, as an analytical point to understand where we are in our “expansion” cycle.

The general consensus of these articles is that we are on par with home prices in 2007. However, there are a couple of sticking points with this train of thought in my opinion.

First, this does not take inflation into account. While it has only been 10 years; with an average inflation rate of about 2.25% over the past 10 years, current prices are (arguably) about 21.75% higher than prices in 2007 according to the Bureau of Labor Statistics Consumer Price Index. I would interpret that to mean that a $100,000 home in 2007 would be $122,000 today not considering other Market factors, which these other analyses are also not considering. All things being equal, this should mean that prices are about 22% less today than they were in 2007, (assuming actual dollar amounts are similar) and that’s a big number.

Second, it does not consider difference in interest rates. Speaking in generalities, 30 year rates are about a full point less today than they were in 2007. While 1% doesn’t seem like much, if you take an average sales price of around $350,000, that can equate to $3,500 is a year in interest at the beginning stages of a loan. That’s almost $300 a month.

Third, if history repeats itself, that would indicate that we are about halfway through our expansion cycle, not at the end of the supply cycle. Based on local indicators, this would seemed accurate. Supply is still low, construction is underway. Usually the phase that follows expansion is high supply or oversupply. While construction costs seem to be keeping construction rates at bay, it wouldn’t be far-fetched to believe that things could pick up substantially and create an oversupply in two years’ time. if we aren’t careful.

In short, I truly believe that while we will experience a housing adjustment in the future, (not necessarily the near future) but also that it will not be as deep or have as much impact as the historic, most recent recession. I also believe that a recession will be followed by a period of expansion, and the thought process will repeat itself time and again as it has in the past. Until then, I’ll continue to read articles about National trends and take them with a grain of salt, then come to my own conclusions based on facts, data, historic data and my own experience despite how accurate or inaccurate they may be.

Idaho Homeowner’s Exemption

October 15, 2018 By Tayson Rockefeller 2 Comments

I figured it was high time to write something about the Idaho homeowners exemption, what it is, and how to take advantage of it.

Like most States, you receive a discounted rate for your property taxes for your primary residence located in Idaho. If you are taking advantage of the Idaho homeowners exemption in Idaho, you obviously can’t take advantage of a tax exemption for a primary residence in another state, and vice versa.

How much will you save?

In a nutshell, you will not be taxed on either 50% of the total assessed value of your home, or $100,000, whichever is less. No, this does not mean you will save $100,000 worth of property taxes.

How much you will save specifically depends on the rate of Taxation (the Mill Levy) in your area. Teton County Idaho has 16 Districts that range from about .6% to about 1% depending where you live for the most recent year and at the time of this article.

So, let’s assume that you have a home that is assessed at $300,000 (the County’s value, not what you paid ie. the market value) and you live in an area where the Mill Levy is 1%. Since $100,000 of the total value is less than 50% of the total value (or $150,000), you are going to save 1% of $100,000, or about $1,000.00 worth of property taxes for that year. Remember, if your home has a higher assessed value, you aren’t going to save any more than that $1,000.

When is the deadline for me to file the exemption to receive the discount for that year?

On existing construction it’s April 15th. For new construction, that deadline is moved to sometime towards the end of November, this year it’s November 26th.

What if there are multiple owners of the house?

An example here would be two people who live together that are not married. As long as both of the occupants can prove residency, they will receive 100% of the exemption allowance. If only one can prove occupancy, you’ll get half.

How do I prove residency?

The county used to accept different forms of proof of ownership such as a utility bill. That requirement has recently changed, you actually have to have the address of the home where you are claiming the exemption printed on your Idaho license.

How do I file for the exemption?

After updating your license with the new address, bring your license or licenses in to the assessor’s office which is located at the second floor of the County Courthouse next to the DMV. Don’t be fooled, you update your license at the Sheriff’s Office, not the DMV!

Recent Testimonials