Business
Where Has All The Money Gone?
June 15, 2007 
THIS PLEA COMES FROM A YOUNG BOISE BANKER
I think you should post an article on how the generation that currently runs the state (30+ years old) has all but wiped out any chance for the younger generations to live in Idaho. Housing is ridiculously expensive, and is continuing to rise rapidly.
Most new construction for poorly to average built homes on the outskirts of town is $145+ per sq ft. It is unaffordable to nearly everyone of my generation. $80k per year as a salary to get into “entry level” housing is ridiculous and unobtainable for most people regardless of education or years of work experience. The average
household income for the area is only around $50k.
Imagine how our “vibrant” economy will fare when the old retire and there is no young, educated labor force to take their place because they moved to the mid-west where home prices are half of those here and the jobs pay 10-20% more.
This is just a concern from a young, educated Idaho citizen, expressing the views of his generation.
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Comments & Discussion
Comments are closed for this post.
Jun 15, 2007, 6:47 pm
I feel for the kid. I could have written the same article when I was first entering the job market post-law school, saddled with debts and job that paid less than my friends who never went to school were making at the time.
I think about every new generation entering the job market feels this way.
When you are young, you NEED a lot–a car, a house, work clothes, etc. When you get older, you’ve already acquired all that stuff and you start to forget what it was like when you were 25.
Jun 15, 2007, 7:57 pm
When enough out-of-staters move here and the air quality continues to decline I guess I’ll move to Kentucky where I can buy the equivalent of my Eagle home for about $136,000. I’m retired and don’t have to worry about there being no work in western Kentucky (where I have family.)
I feel for the youth of our communities. Unfortunately it has been this way in Idaho for many years. Many from my generation left because there was no work here. My children’s generation – early 80’s – also could find no work here. Now young people may have work but it doesn’t pay enough for the over-inflated housing prices. (Thanks to out-of-state pressure.)
I worry about the overall economy. We have so many McMansions bought by people who had great amounts of money from selling in Arizona, Nevada or California (and other places, I’m sure). When large numbers of these people lose their jobs, get transferred or get divorced there will be large numbers of big homes on the market that the locals just won’t be able to buy.
I spent 35+ years in the real estate business and I am concerned that our economy could collapse unless the middle class and the young people entering the job market start getting to share in the overall wealth that has been created in recent years.
When you look at the greed in the management end of local businesses you can see what the trend has been. Until those people recognize they are starving their customer base I guess we will keep going down the current path.
EDITOR NOTE–Treva, if you go to Kentucky you will be just like the KALIFORNIANS in Idaho. They come here because they can’t afford to buy or build there and they can get twice as much bang for the buck in Idaho…we will be offering a post soon on this.
Jun 15, 2007, 10:48 pm
Like many, this is something that concerns me. I am especially sensitive to the Editor’s Note to Treva, and I agree wholeheartedly.
I want to raise a fairly controversial point, though I don’t want to sound like I’m picking on anyone in particular. Most of us here are not happy with the circumstances, especially as concerns growth, that face Idaho. Yet how many of us are complicit in it? Do me (and yourselves) a favor and take a personal inventory at how you may be contributing to the problem though your career and/or lifestyle choices. It might startle you.
My point is that the problem is never viewed in the particular but in the aggregate: my Californian neighbors are nice, great, modest people, yet we loathe “Californians” that move here and create/add-to the problems we face. We loathe the developers that want to build super-communities on sacred foothill land, yet I may have been in real-estate for 30 years of my life.
Obviously the only thing we can effectively change is our own personal habits and choices. This includes your careers. Does your job in any way make you complicit in the problems we face, and those that you might detest? If so, perhaps it might be time for a career change.
Jun 16, 2007, 8:53 am
Right on Tj, and while we’re at it we should all take a look at what we really “need”. The lifestyle that I see many young (20-30ish) people lead is one of complete slavery to consumerism.
I’m, well, older than that, and have never had a new car, custom built home, or been able to eat in restaurants 5 night a week (not that I want to) that seems to be the norm for young folks expectations.
I’m not saying that the author of this post has these expectations, but it sure seems that a majority of us want bigger, better, faster, more, just like those darn Californians. Where does it stop?
I have no idea how a young family gets by these days without living like Spartans, or working so much that you never get to spend time with your family anyway. There needs to be some way to curb real estate speculation and the use of houses as investment vehicles, rather than homes for people that actually live in them more than a few weeks a year. Empty vacation homes and gates do not build communities. This boom and bust system has to be sidetracked, I’m not looking forward to the next bust.
I say give big tax breaks for primary residences, strong disincentives for 2nd homes and speculation in the residential market. Oh yeah, and if everyone was paid a living wage, maybe we could all afford decent housing? Or even limitation on square footage and meaningful impact fees for developers? Certainly not new ideas but …. Hmmmmm….
Jun 17, 2007, 1:18 am
I agree with Idagreen about the tax breaks for primary residences, disincentives for 2nd homes and speculation, and oh yes, a living wage for all would be nice. As we move into and near retirement, we realize that we have paid dearly for living some place we used to like despite the pay level.
We moved to Idaho more than 40 years ago from Arizona; my husband took a job at a company that had an opening because someone moved to Arizona. Even trade. We have never bought a new home or had one built. We have lived in two different homes built several years before we bought them. Neither was a McMansion but they are not tiny — there is a middle ground.
I cannot imagine that two people need a 12,000-square-foot home as at least one couple recently has had built in the Treasure Valley. Not sure how you deal with size/square footage — Ketchum tried but got shot down — however, energy costs may in time limit that.
One of the things we should be looking at is water use in new homes especially in the foothills and to the southeast. How much watered yard is there? Is it xeroscaped? How many shower heads per shower (it can be as many as five to seven)? Limiting water use per person is something that could be considered.
Most of the new homes of any size are being built in such a way that they require air conditioning. There are many design and building methods and materials that can reduce the need for air conditioning and will save on fuel in the winter also. New construction could be required to conform to energy saving standards.
That said, I really don’t want to see any more new construction until it is needed somewhere. Currently, there is way too much speculative zoning and construction for both residential and commercial.
When you see an old lady shaking her fist at earth-moving equipment in her favorite pastures, it’s me.
Jun 17, 2007, 7:49 am
My daughter, third generation born in Boise, has three children and is just starting a teaching career. She cannot afford a home in Boise. She can hardly afford rent – not with student loans to pay off.
So what is going on here? I have read that affordable housing (being built on Grove Street) is $200,000. I am sorry, but for Idaho grown kids on Idaho salaries $200,000 is NOT affordable.
Jun 18, 2007, 8:58 am
I hate to bring politics into this discussion, but this needs to be said: If Idaho wasn’t such a Republican dominated state, then maybe working people would be paid a fair wage and health insurance would be affordable, wealth would be more equitably distributed, and more of us could have a retirement worth working 40 years for.
But I guess Idahoans will keep voting Republican as long as most of them believe it is more important to wage war on foreigners who don’t look like us than it is to take care of our own people.
Jun 20, 2007, 9:50 am
Rod in SE,
Hate to inform you, but most Idahoans vote Republican because they think the Dems will take their guns which they worship on a higher altar than GOD. Also there is a anti-government feeling even though many of the very rich in this state have benefited mightily from government largess. Agriculture is the biggest beneficiarey of goverment welfare. As a matter of fact, the welfare from farm subsidies is the guaranteed profit the farms and ranches make. A spike in commodity prices is icing on the cake. They like to scream how they hate the government but they will cry like babies if you take away the government hind tit they nurse on. I’m not talking about “family farms ” here.
The other big lie is the illegal labor problem. It’s fun watching how they try and blame the middle class and liberals for a problem they created. If you have a steady stream of poverty wage workers you can become very wealthy.
Jun 20, 2007, 4:28 pm
I’m not sure which generation some of our readers come from, but in case you weren’t born early enough to realize this, the “American Dream” has long been lost. What I’m hearing here, basically, is people complaining about capitalism and free markets!
Indeed, our newer generation may not be able to afford a home of their own until they collect an inheritance from mom and dad (and perhaps from both sides of the family)… providing mom and dad knew anything about savings and investing.
Today’s generation is so saddled with unproductive (note the qualification) debt that they’re too busy satiating their “want it now” egos to even think of saving for a down-payment on a home. So be it… let consumers decide how they want to spend their their hard-earned money. But let’s not, in the same breath, begin to complain that some things are too unaffordable as we squander our money into non-essentials.
Jun 22, 2007, 3:42 pm
I am happy to see that at least 10 people read what I had to say.
Just for reference I wanted to let those who posted comments know a few things about debt, finances and economics from someone who is educated in the field and works daily in those fields.
The typical maximum house debt a family can afford without putting them self into financial disarray is 3 times the gross household income. This means for a typical 1300-1400 sq ft entry level house in the Boise area, costing $200-225k, the family would need to have at least $70k per year in gross income.
So for our area, with $50k being the median income, their total house debt should not exceed $150k. Most people in the valley are actually hitting in the neighborhood of this figure. The problem lies in that they were able to either purchase homes 3-5 years ago when our property values started to skyrocket or they had equity value in the homes they have recently sold to bring them down to this same level.
My generation and any subsequent ones will not have the luxury of buying 5 years ago or having existing equity.
It has been suggested that we squander our money. Most young kids do. In my situation I own a used vehicle with no loan against it. I do not eat out more than once a month. I have not bought any new clothes totaling more than $100 in a year…..ever. I invest approximately 15% of my income towards retirement because I will never have social security and I do want to retire someday. I am what most call “thrifty, frugal, money savvy or cheap” yet I am unable to buy a home. Not because I waste my money on cars, food, bars, clothes or anything else that many young kids do.
I do not NEED, as some have pointed out, fancy cars or taking expensive trips. I would just like to have a place of my own, which is reasonably affordable, where I am paying myself some equity value instead of a landlord’s.
I don’t think being republican or democrat has anything to do. Free enterprise does. Unfortunately state’s cost of living (housing in this case) is not unlike multiple countries trying to via for market dominance. Enterprise races to where the money can be made with the least expenses. China building 70% of everything we have is an excellent example of this. The only problem is that free enterprise and social ethics do not often merge. Money is being made and those making it are very happy, however they do it at the expense of someone else. Free enterprise is quickly becoming a zero-sum game. In order for one to win someone else must lose. Europe has an excellent system for social equality to a certain degree. The quest for power and money for a few people isn’t the name of the game there. They choose to make everyone in the company a winner; they distribute profits far more equally, ensuring that everyone has a chance in life.
Perhaps it is time we try a similar system.