The cost of housing didn’t shock Peter Ohm when he moved to Pullman four years ago.Ryan Bentley could have also addressed how property taxes make home ownership expensive on the Palouse as well. Pullman is #1 and Moscow is #2 in proportional real estate taxes among all "micropolitan" areas in the West. This is caused by a couple of factors: a hot real estate market resulting in high property tax evaluations and an underdeveloped retail sector, which makes local governments more reliant on property taxes versus sales taxes.
Ohm came to the Palouse from Orange County, Calif., and lived in an apartment like other college students. He thought prices in the area were cheap compared to Southern California.
Now that he owns Advance Tech, a computer consulting company, is married and has a young son, he’s started to look for a house.
His initial view of home prices in the area has changed.
“I think prices are a little high,” Ohm said. “We were planning on waiting to buy a home next year, but with prices going up, we don’t want them to go any higher.
“I don’t want to be trapped.”
Dale Miller, manager of the housing program for the Community Action Center in Pullman, said Ohm’s instincts are right on.
Miller said the cost of housing in the area probably won’t be dropping soon. Half of the county’s homeowners pay more than 30 percent of their monthly income on housing. Thirty percent is generally considered affordable by government standards.
“Those statistics are getting a little old,” Miller said. “Around here, rent and utilities have crept up and housing prices have jumped.”
Tammy Lewis, with the Palouse Economic Development Council, said the area has some housing problems. Most of the homes on the market are too expensive for first-time homebuyers, and ones that are reasonably priced are hard to find.
Lewis said most of the houses available in Pullman and Moscow are priced around $200,000 or more. Property in Palouse, Colton and Potlatch is cheaper, but it only pops up once in a while.
Miller said the average home cost $170,000 in Whitman County in 2005. That figure jumped 20 percent this year and is hovering around $200,000.
Debbie Loaiza, broker and co-owner of Bennett and Associates, said the average home in Latah County sold for $179,280 from January to July of 2005. The average price jumped to $194,737 a year later.
Miller said the area isn’t seeing the real estate slowdown that has become common in other parts of the country largely because of the two universities, a growing high-tech field and overall increased interest in the area.
Whitman County has the fifth-highest housing prices in the state of Washington, Miller said. San Juan county is the most expensive, followed by King, Jefferson and Whatcom counties.
“We have an agricultural industry like Garfield or Asotin counties, but we have the two universities that provide the biggest economic engine,” Miller said. “They provide higher wages, and those people can afford a $300,000 house and keep the price up.”
Loaiza said the increased prices don’t just reflect expensive homes bloating the average. Twenty-one homes in Latah County sold for less than $100,000 from January 2005 to July 2005. Nine sold for less than $100,000 during the same span this year.
Loaiza said the lowest-priced new homes in Latah County start about $170,000. Seventeen were built this summer, and all of them sold before construction wrapped up.
Loaiza said converting duplexes into condos is a growing trend on the Palouse, and throughout the United States.
People want to own a home, but the traditional lot and white-picket fence aren’t realistic for many first-time homebuyers. The duplexes are broken into two separate properties, and the air between the studs becomes the property line. Buyers can purchase one side for about half the price of the whole property.
“This is something we really haven’t seen before,” Loaiza said. “It’s really just started this year.”
Loaiza said people migrating from California comprise most of her business.
“They’re not buying two homes at a time; I haven’t seen that,” Loaiza said. “But we have seen good appreciation.”
Loaiza said commuter communities like Troy and Palouse provide the affordable aspect people are searching for, and potential owners also can pick up a little acreage.
Paul Hendrickson, who farms near Garfield, recently annexed 150 acres into the city. He plans to build 35 or 40 three- to seven-acre plots that will cost between $30,000 and $70,000.
Hendrickson said he tried to price the plots at a little more than half of what lots are going for in Pullman. Each site will have city water and garbage, and its own septic system.
Hendrickson said he feels like Cpt. Kirk commanding the Enterprise — boldly going where no man has gone before.
“The area needs more housing with options,” Hendrickson said. “People can have a horse and still be near town. And it is affordable.”
Garfield Mayor Jarrod Pfaff said most residents don’t mind commuting 50 miles a day to and from Pullman.
“It gives people an option to get something for their money,” he said. “Not just a 50-foot-by-100-foot lot.”
Margaret Howlett, Latah Economic Development Council executive director, said she used to rent an apartment that was for sale for $140,000. People flooded through looking at it because of the relatively cheap price, but were disappointed by the lack of space.
Miller said other towns are annexing property to develop, but have run into infrastructure problems when they try to find funding to install sewer and water systems.
Other problems exist for those who want to build homes.
Miller said the primary developer in the area is Copper Basin. He said most areas have at least two developers.
“There’s not a lot of incentive to take a lower profit margin,” Miller said. “They still want to make some money.”
Contractors can’t seem to build fast enough. Hendrickson said there’s a year-and-a-half-long waiting list before he can start construction on his lots.
Susan Fagan, director of government relations at Schweitzer Engineering Laboratories, said the company currently has 80 job openings. Part of the reason SEL can’t fill the positions is because people can’t find homes to fit their budget or lifestyle.
Whitman County is creating new rural residence laws that are being reviewed by the county commissioners. The county currently has a three-year waiting period to build, although that law is on the cutting board. Without a waiting period, a lot of ground would be available for development.
Whitman County Commissioner Jerry Finch said the county can’t give developers or landowners any tax breaks, but it might be able to help expedite the permit process. He said private business, not the government, can solve the problem.
“Government is ineffective at best,” he said. “We can provide a few incentives, but you don’t want government running housing.” [That's why we need to dump the proposed changes ot the rural housing ordinance. Government doesn't need to be involved in figuring out what color someone's house needs to be.]
Howlett believes government can help. She said it can dangle the carrot for developers to build affordable homes.
She said this is not the first area to have problems with housing.
“Plagiarize, borrow — there are a lot of good ideas out there; we need to use them,” she said.
Lewis said she has started meeting with the Associated Development Organization and surrounding communities to work on the housing issue.
“We have to get all the towns together and figure out their strengths and see what they offer,” Lewis said. “Rural lifestyle isn’t for anyone, but the towns can benefit.”
Potential homebuyers can come out ahead in the long run. Ohm said he could continue to rent, but he sees the possibility for values continuing to climb.
“If prices stay the same in other places and keep going up around here, when we leave, we could make some money,” he said.
Young families with children are the lifeblood of any community. Just ask Colfax and Palouse, which are both experiencing declining school enrollments.
Are duplexes all Moscow and Pullman can offer young families? Duplexes that they may have to share with a bunch of rowdy college kids?
What could be more pivotal to our quality of life than affordable housing? Yet all we hear about are "viewsheds," "ugly hilltop development," and "preserving our rural character." Of course, the people saying those things are college professors and retirees that already have homes, or college students who are only renting here for a short time. It's the classic "I've got mine, now pull up the drawbridge" attitude.
Zoning and the development process must be liberalized, as Ed Schweitzer has called for. That's the only thing that will attract more developers and development, not tax breaks or "dangling carrots." If you're looking to borrow an idea, that's a good place to start.