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Low-income rentals are missing in the Treasure Valley

The tight Treasure Valley rental market

Apartments are becoming more expensive and harder to find in Boise and the rest of the Valley.
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Apartments are becoming more expensive and harder to find in Boise and the rest of the Valley.

Nesha Jennings said her problem wasn’t that she couldn’t afford to pay $900 a month for a Boise rental for herself, her husband and their teenage daughter. She could.

But when she searched for a place to live in May, she did not have the $3,000 needed to cover the last month’s rent, deposit and pet fees to sign a lease for an apartment at that price.

And there were the application fees charged by many property managers. Combined with the rents, they were more than Jennings could afford.

She looked first in Southwest Boise, where the family previously rented before the landlord decided to move into it himself.

“There was almost nothing in the same area, so I had to look further and further into Boise,” Jennings said. “A lot of the places I came across were already rented out, or I couldn’t afford to take $100 for an application fee out of the rest of my move-in costs.”

Jennings, 39, said she caught a break when the landlord of a rental near the intersection of Fairview Avenue and Allumbaugh Street allowed her to spread those move-in costs over three months. She signed a $900-per-month lease, and her family moved in.

Jennings said she supports the family on her $30,000-a-year salary as a psychiatric technician at Allumbaugh House, which offers detoxification and short-term crisis and mental health care services. Her commute is shorter, and she said she’s starting to financially catch up.

“Gas to and from work was a stretch,” she said. “My car payments fell behind. Groceries each month were a stretch.”

There’s not enough housing for low-income people in Boise. I love this town, and that’s the only fault I have with it.

Disabled apartment tenant Richard Williams

RENTS UP, RENTERS TOO

The Valley faces nothing as severe as the affordable housing crisis found in places such as San Francisco, where the average apartment rented for $3,458 in the first quarter of 2015. But rent rates here have far outpaced stagnant wage growth.

According to a report by the Southwest Idaho Chapter of the National Association of Rental Property Managers, one-bedroom apartments in Ada County increased 30.6 percent to $606 a month on average from 2009 to 2015, the report said. Three-bedroom units increased nearly 21 percent, to $867.

Since 2012, the first year the association surveyed rentals in Canyon County, rents rose nearly 20 percent for both one-bedroom units (to $500 per month) and three-bedroom units ($750).

A person earning Ada County’s median single-person-household income of $32,000 a year could afford to pay $800 a month, following the rule of thumb that no more than 30 percent of income should go to rent. A family earning Ada County’s $55,000 median-household income could pay $1,380.

The thing is, it’s better around here than it is in many other markets around the country. So that gives you an idea of how big of a problem this is, nationally.

Ellen Campfield Nelson, managing associate of consultant agency Agnew Beck

The share of households renting in the Boise-Nampa area, which includes all of Ada, Canyon, Boise, Gem and Owyhee counties, increased from 28.2 percent in 2000 to 32.3 percent in 2014, according to the U.S. Department of Housing and Urban Development.

Vacancy rates in Ada County fall between 3 and 4.2 percent, depending on the source, down from 9 percent in 2009 and below the 5 or 6 percent historic norm.

Boise City Councilwoman Lauren McLean said the tight market is a result of more residents either opting to rent or lacking credit to buy homes since the Great Recession.

McLean is also a board member for the city’s urban renewal agency, the Capitol City Development Corp., which also wants to encourage housing development Downtown.

“The rental market is practically full,” McLean said. “The vacancy rates are negligible, and rates are going higher because there are more people in the marketplace. That creates a downward pressure on everybody looking for housing. It becomes very difficult.”

And some Boise complexes are drastically increasing rents. New owners of the Glenbrook Apartments at Cassia and Curtis streets gave 30-day notices to vacate to tenants of most of the 112 units to renovate before increasing rates. Most of the tenants were refugees. The rents are rising from $575 for one-bedroom apartments and $650 for two-bedroom units to about $900 and $1,000, respectively.

Whitewater Park Apartments near Whittier Elementary School recently told tenants that rates would increase, in some cases by more than 50 percent. A one-bedroom apartment facing Quinn’s Pond will increase from $777 to $1,176.

LITTLE HOUSING FOR THE POOR

Ada County has an affordable housing problem, said Deanna Watson, executive director of Boise City Ada County Housing Authority. Watson’s office administers programs such as Section 8, which provides vouchers to 2,000 households in the county.

In 2012, 76 percent of voucher holders were able to find housing in 60 days, she said. Today, only 60 percent do, and some people turn in unused vouchers after being unable to find housing after another 60 days, she said.

Rental competition hurts chances for low-income people such as refugees, felons, veterans and tenants with disabilities from landing leases, said Zoe Ann Olson, executive director of the Intermountain Fair Housing Council, a nonprofit.

Tenants in the lower-middle income range, who earn too much to receive housing subsidies, struggle to find rentals at the $650 to $750 range that the families she works with can afford.

“If you don’t make $35,000 a year, it’s hard to find affordable housing in our area,” Olson said. “We have a hard time finding housing that the families we work with can afford anywhere under $900 a month.”

Boise resident Richard Williams feels the squeeze. Williams, 58, lives alone in the Hillcrest View Apartments on the corner of South Orchard and West Cassia streets. Since a spinal injury in 1989, he has lived on Social Security, which pays about $760 a month. He depends on the federal Section 8 Housing Voucher Program to pay most of his $650 rent.

Verity Property Management, which manages Williams’ complex, told him nearly two years ago that it would no longer accept the vouchers and gave him a year to move out. After a year passed, Verity extended the deadline by another year but said the new deadline was final.

Williams becomes fatigued after walking a lap around the complex, which he does three times a week during warm weather. He started house hunting last week and said he found few prospects for rentals in his price range that accept vouchers.

He said he is lucky that he just secured an apartment at Civic Plaza in Downtown Boise that accepts housing vouchers. “It would have been a lot harder to find a place if I had family,” he said.

Using the 30 percent rule of thumb, an Ada County minimum-wage earner can afford $375 per month for housing.

NO PROFIT MEANS NO PROJECT

In 2011, a group of investors led by David Wali bought the old Macy’s building at the corner of 10th and Main streets for $1 million with plans to convert it into affordable apartments. Wali said his group planned retail space on the ground floor and 64 apartments that would rent in the $700 to $800 range on the second floor.

The partners looked at federal tax incentives for affordable housing projects and at opening the units to renters with vouchers. But that would have meant restricting potential renters who were students or who earned too much to qualify for subsidized housing.

Wali and his partners scrapped the plan after determining it could not turn a profit, even if they secured affordable housing tax credits.

“It just didn’t pencil out,” Wali said. “We found there’s a gap between those who qualify for housing subsidies and those who can pay for the market rate.”

Apartment building of any kind stopped during the recession.

Boise approved permits for eight multifamily units in 2009 and zero in 2010. That number grew to731 in 2014 and 907 so far in 2015. Agents say the units are leasing well, but more are needed.

TRAILWINDS: AN AFFORDABLE RARITY

Valley housing experts pointed to a recent project that has managed to thread the affordable-rental needle: Trailwinds Apartments in Garden City.

Located between Veterans Memorial Parkway and 42nd Street, the 64-unit complex is owned by Northwest Real Estate Capital Corp., a mission-driven nonprofit that offers affordable housing. The nonprofit manages more than 600 units in the Valley, including 390 it owns. It took a swing at developing the Macy’s building into affordable housing before selling to Wali’s group.

Seven of the Trailwinds apartments rent for market rates, ranging from $690 per month for a one-bedroom, one-bathroom unit to $1,000 per month for a three-bed, two-bath apartment.

The rest are available only for tenants earning 60 percent or less of the Ada County median household income, adjusted based on the size of the household. The units range from $413 to $637 per month, based on income, for one-bed, one-bath units. They top out at $570 to $805 per month for three-bedroom, two-bath apartments.

While the Valley could use more developments like Trailwinds, the area also needs more housing affordable for tenants earning between 60 percent and 80 percent of the area’s median household income, she said. Land and construction costs are simply too high to provide those housing options, Northwest Vice President Julie Marple said.

“A lot of the new apartments coming in Downtown are not going to serve these families,” Marple said. “Idaho has a lot of lower-income people because we have a lot of low-paying jobs.”

SOLUTIONS?

Building the $11 million Trailwinds was possible only because the nonprofit will recover $8 million in federal tax credits that it will pass on to its partner developer, VCD, Marple said. VCD, of Boise, specializes in housing projects supported by low-income housing tax credits.

“It wouldn’t work otherwise, and that’s why tax credits are so critical,” Marple said. “It’s the most successful method the federal government has provided to assist in housing folks who have less-than-average incomes.”

All of the housing experts the Statesman spoke to agreed that affordable housing projects will remain a financial loser in the for-profit world unless new incentives improve their margins.

Opinions varies on incentive types and sources.

Watson said Idaho should follow other states’ lead and devote money for bridge funding, difference between a project’s value for developers and the amount needed to make it profitable for them. Many states either pay into funds with state taxes, or they allow for local-option taxes, an idea repeatedly shot down in Idaho.

Transaction fees on permits could also support a fund, she said.

The surrounding states and probably 40-plus states have a housing trust fund that has money for bridge funding for developing affordable housing.

Deanna Watson, executive director of Boise City Ada County Housing Authority

McLean said Boise has taken a first step with its $1,000-per-unit program for affordable housing developments.

DOWNTOWN: A DIFFERENT ANIMAL

In 2014, Boise officials set a goal to add 1,000 housing units Downtown over the next five years. To encourage building, the city offered to pay developers up to $2,000 per Downtown unit that meet sustainability and affordability criteria. The city offered up to $1,000 per unit for apartments meeting all but affordability criteria.

Two developers have applied for payments based on sustainability, and the city expects a third to do so. None has applied for the payment based on supplying affordable housing.

McLean, the city councilwoman, said 500 units have either been built Downtown or are in the planning stages. Plans for projects underway fall in line with upscale units leased last year at The Owyhee and the 951, both renting for more than $1,000 per month for units bigger than a studio.

Wali said only high rents will cover rising costs for Downtown property, making affordable housing projects unlikely even for companies that claim they want to see a greater socioeconomic mix Downtown.

“I wouldn’t say it’s impossible, but it’s challenging,” Wali said. “It’s hard to buy a market-rate piece of ground, pay elevated construction costs and provide a lease rate that fits into the support services side of the market — the bank teller, the support services professional within a law firm — that kind of person.”

Wali said cities and other entities that collect impact fees, such as the Ada County Highway District, could sweeten the pot for Downtown developers by waiving fees.

Downtown workers who cannot afford to live in the city core will increase their impact elsewhere, he said.

“All actions have a reaction,” he said. “It’s more traffic on I-84 and more traffic on State Street. If you live closer to work, you have less impact.”

The Downtown urban renewal agency, CCDC, has partnered with Los Angeles developer Local Construct on two projects to encourage housing projects.

The agency solicited bids for developers to build apartments at the intersection of 14th and Idaho streets that is now home to The WaterCooler business incubator. CCDC chose Local Construct’s bid to build a mixed-use project with retail and 39 units.

The agency also agreed to pay for an incentive worth $2.8 million for 159-unit The Fowler on Fifth and Broad streets in the Central Division. The agency paid to move historic homes at the site and agreed to pay for street and landscaping improvements, and buy one floor of the parking garage located in the project, said John Brunnelle, executive director of the renewal agency.

“We wouldn’t do that every time,” he said. “We’re trying to get the snowball effect going for rental housing in the Downtown area.”

Most units at both sites would rent for more than $1,000 per month, doing little for low-income or even median-wage earners.

Zach Kyle: 377-6464;

Twitter: @IDS_ZachKyle

Goodbye, paycheck...

As a rule of thumb, housing experts say most renters can afford to spend 30 percent of their earnings on housing. More than 40 percent of renters in the Treasure Valley are either moderately burdened by rent — paying between 30 and 50 percent of their earnings — or severely burdened, meaning more than half of their paycheck goes to rent.

Ada County

2008

2011

2014

Share of moderately burdened renters

26.50%

22.20%

22%

Share of severely burdened renters

16.30%

27.20%

23.80%

Median renter income

$3,071

$2,440

$2,966

Median rent

$809

$781

$837

Canyon County

2008

2011

2014

Share of moderately burdened renters

27%

22.30%

25.10%

Share of severely burdened renters

17.60%

26.60%

19.50%

Median renter income

$2,340

$2,098

$2,371

Median rent

$693

$669

$768

Source: Apartment List, using U.S. Census data

ZACH KYLE

As one of the Statesman’s two business reporters, Zach covers real estate, technology, agriculture and whatever else comes along. He and his wife, Catherine, rent a small duplex in Boise.

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