WEST PLAINS — According to several local officials, housing availability in the area — and particularly the West Plains — ranges from “grossly inadequate” to even worse.
“We have a housing crisis,” Tom Hormel, president of the Washington Association of Realtors told an audience of about 100 attendees at a virtual West Plains Chamber of Commerce update on housing last Wednesday.
Hormel contrasted his assessment of the current situation with the last time the country faced a similar economic crisis in 2007, when questionable mortgage financing helped lead to a recession. Back then, Hormel said the county was able to weather the lack of housing sales through adequate vacancies rates among rental units — a sort of relief valve.
“We don’t even have that now,” he added. “A crisis to me is when, you know, we don’t even have any relief valve.”
Hormel said in 2018 – 2019, weekly listings for new homes in the county ranged between 1,200 – 1,500. Prior to coming on the meeting, he said he had checked listing services and found 203 in the entire county.
Hormel and the other two officials on the panel, Spokane County District 3 Commissioner Al French and Spokane Home Builders Association immediate past-president Ben McGerty, attributed the situation to several needs, including land to build on and opening existing land to housing developments. Hormel also noted new housing costs have almost priced many people in the area out of home ownership, with median sale prices now topping $300,000 as opposed to $167,000 just four years ago.
McGerty, who is also Hayden Homes’ regional director for the Inland Northwest and North Idaho, pointed to increases in the cost of land and lumber along with new state energy codes as several reasons why homes are more expensive. He noted that every $1 in costs of construction equates to about $2.50 increase to the customer due to carrying costs, construction financing, commissions, insurance and other elements.
For instance, McGerty said land value should be about 20% of a home’s sale price. For a $250,000 home, that’s about $50,000, but on the West Plains, land costs are averaging about $75,000.
Increases in lumber costs from COVID-19 restrictions, Canadian lumber tariffs and slow production from Northwest lumber manufacturers have added another $5,000 to costs of a 1,500-square-foot home — equating to $12,500 on home sticker prices. Adhering to state energy codes that became effective Feb. 1 on the same home adds another $8,000 in costs — $20,000 to the buyers.
“Total these costs together, and you’re at over $90,000 before you take into account any inventory issues, supply and demand in the market,” McGerty said.
Hayden Homes, which currently has homes in West Plains developments’ Aspen Park and Traditions in Airway Heights, focuses its business model on homes that meet median income thresholds in the cities where they are built. McGerty said Spokane’s median household income of $52,000 a year allows the affordability of a $253,000 home. Right now, because of the increase in costs, the median price for a new home is $416,000, with houses in Aspen Park starting at $305,000.
“It is impossible right now to bring a home to market that meets their median income threshold,” he added.
And then there’s land — or in the panel’s estimation, a lack of it. French said part of this stemmed from the county’s 2013 comprehensive plan updates that became the subject of litigation between it and the state departments of Commerce and Transportation — who objected to the amount of land allocated to housing on the West Plains.
“So we ended up having to reduce it and guess what, now we have a housing shortage,” French said.
An agreement does allow the county to swap land in its Urban Growth Area with land that might be suitable for housing outside of the UGA boundaries, and French said they are working on arrangements to swap outside land owned by a developer with the county’s ORV park north of Airway Heights. It’s critical because housing on the West Plains should go hand-in-hand with the booming commercial and industrial growth in order to minimize other impacts.
To illustrate this, French pointed to the new Amazon Fulfillment Center near the Medical Lake/Interstate 90 interchange. Ridership data from the Spokane Transit Authority indicates that about 1,100 of the 3,000 employees at the center ride the bus to and from Spokane.
“Put those people in cars and you can see the kind of congestion that that would add to an already crowded I-90, especially as you climb Sunset Hill,” French said. “We need to move workers closer to work, and that means more housing.”
In December 2020, National Association of Realtors economists predicted the Spokane metro area would be among the nation’s top-10 performing housing markets post-COVID-19 — one of two in the top 10 on the West Coast, the other being Boise, Idaho. With the region continuing to attract commercial and industrial construction, the prediction adds urgency to the need for housing for the Chamber panel.
“We can’t keep the closed-minded approach that says we don’t want people moving to the area,” Hormel said. “Businesses won’t move here if they can’t house their workforce.”
John McCallum can be reached at jmac@cheneyfreepress.com.
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