ULI Idaho Blog

Multifamily housing: More choices lead to stronger communities

Written by Scot Oliver, executive director of Idaho Smart Growth, a statewide nonprofit organization based in Boise. Published in the Idaho Business Review June 5, 2017.

A bumper sticker from the ‘70s reads, “Houses: everybody gets one before anybody gets two.” Many people are lucky enough to take housing for granted, even two or three of them. But as communities grow and become more desirable, the shortage of land available for housing drives up costs and drives more people out of the market. This can have widespread negative consequences on everyone in the community.

Population growth continues at high rates. By the year 2030, the U.S. Census estimates the U.S. will grow by 38 million people, to 359 million—an increase of nearly 12 percent over 2015. Idaho’s rate is higher—last year we were third in the nation in population growth. Idaho will add 294,000 people by 2030, totaling 1.97 million—an increase of over 17 percent. The Boise metro is growing even faster. COMPASS predicts an increase of 184,000 people by 2030, for a total of 830,000 people and a growth rate of 28 percent.

Where will these people live? Housing demand is not spread evenly across the landscape. People are primarily moving to urban areas. In spite of Idaho’s image as a rural state, the vast majority of us—over 70 percent—live in urban areas. From 2010 to 2014 half of Idaho’s counties actually lost population; only five had growth rates above 4 percent. People are following jobs and other opportunities that tend to cluster around vibrant downtowns.

New residential construction is booming in the market, but is it enough? And are we building what people want, and can afford? Historically, Idahoans prefer single-family detached homes—over 73 percent, according to last year’s census. (The next closest category was mobile homes, at 8.7 percent.) Much of the current construction is the same single-family style we’ve been building ever since we started subsidizing suburbia through the G.I. Bill and post-war road-building spree. But increasingly the new construction also includes multifamily apartments and condominiums, which are in high demand.

Last year in the Boise region, 67.7 percent of households were owner-occupied homes, down 2.6 percent since 2010. U.S. home ownership reached the lowest point (62.9 percent) since the census started tracking it in 1965. There are many factors behind the rise in renting, most having to do with demographics and the painful memory of the housing bubble collapse. Millenials currently have the lowest rate of home ownership for their cohort in history, but people of all generations are opting to “downsize” and to rent.

Another shift affecting the residential market is the change in household composition. In 1850, the average American household was six people. A century later it was down to 3.67, now it’s 2.69. More remarkable is the increase in households comprising just one or two people: in 1850 it was 32 percent, today in Idaho it’s over 61 percent and projected to continue rising. Many of these one- or two-person households are looking for homes that better fit their lifestyles; they have no interest in a four-bedroom house with a large yard to maintain.

As demand for rental options increases faster than the supply, prices go up. Existing renters are being pushed out by dramatic rent hikes, for both houses and apartments. Most of the new apartments under construction are in the upper range, unaffordable to the “workforce” of service and office workers who keep the local economies going. It used to be that people who wanted to rent fairly close to downtown could find something acceptable in their price range. Now, renters are joining homebuyers who are forced to “drive ‘til they qualify.” This in turn drives down the quality of life for everyone in the community: farms and forests disappear, traffic congestion and air pollution get worse, worker productivity and satisfaction go down, obesity rates and health care costs go up.

The solution to the housing conundrum is to build more units, of all prices, near where people want to be. Well-designed multifamily development, in infill locations, has to be among the tools available. Having options for people to live near their work, shopping and schools is good for the community as a whole, and will take the commitment of the whole community to bring about.

One barrier to multifamily infill development comes from neighbors who say, “I’m OK with this, just not in my back yard.” The problem is, our back yard is our community. If we kick the can down the road we end up diminishing the quality of life for everyone—including ourselves.

In our report, “Quality Infill,” Idaho Smart Growth and Urban Land Institute Idaho District Council researched the pros and cons of infill development. The report, which is available for download at the ISG website, discusses the consequences of infill—real and perceived, positive and negative—and offers recommendations to help create high-quality infill.

The best thing a community can offer is choices—like where to live, what kind of home, how much to spend. The desirable neighborhoods with the highest property values, best schools and safest streets are those with a historic mix of housing, including a range of multifamily options, which make it possible for a range of people to live there. We need to encourage these choices again.

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