ISSUE #20: A Community Approach for Workforce Housing

WRCHT: local non-profit building WORKFORCE housing

Jun 19, 2024

In today’s issue, I want to highlight a solution to Ketchum’s workforce housing challenge. This solution isn’t coming out of City Hall. Sadly, some of our elected officials have chosen a path that adds to our woes, while some of the best solutions are coming from the community itself.

The City Is Working Hard to Destroy Our Downtown

In previous issues, I have highlighted the Bradshaw/Breen/Hamilton Troika plan for building more Bluebirds in central Ketchum and the single biggest flaw in Ketchum’s Housing Action Plan1—it’s not workforce housing. If it were, the City wouldn’t have changed the definition of “worker” to include people who don’t work as they did in the Housing Action Plan. Given the City’s choice of financing format, they can’t require tenants to work at all. Their “preference” for locals is just that, a non-binding preference. And the City has adopted a “priority” for retirees for Bluebird 1.

This is the same financing structure that was used for Northwood Place and is intended to be used for Bluebird 3 (Lift Tower Lodge), 4 (YMCA parking lot), and 5 (6th Street). It will result in approximately 250 low-income housing units that don’t require tenants to work, have income caps above the level that most of our essential workers earn, and come in massive buildings with inadequate parking. Who is this housing for?

If Ketchum’s Housing Director has her way, she will destroy Ketchum as we know it, closing the gap between Ketchum and every ruined mountain town.

To add Troika insult to our injury, the City’s favored low-income housing developer, GMD, is not a local company. It is a Seattle-based, for-profit company that takes its profits from Northwood Place and Bluebird 1 out of Ketchum.

Contrary to the City’s propaganda campaign narrative (see the last issue), there is a better way. A way that can accommodate both parking and people. A way that can utilize our limited taxpayer resources to provide housing for our essential workers.

WRCHT: The Right Way for Ketchum and the WRV

In previous issues, I have been critical of KURA and its plans for the Washington Lot. In my opinion, it is the wrong allocation of our resources in terms of money, space, and town character.

That being said, I think the Washington project is the right project (in the wrong location).

Why the right project? Instead of being developed by the City in its Bluebird format, it is being developed by the Wood River Community Housing Trust using a ground-breaking financial structure that assures that the building will be affordable workforce housing for essential community workers. It is an approach that serves the needs of the community.

Who is WRCHT?

WRCHT is a non-profit founded by WRV locals Steve Shafran, Mary Wilson and Tim Wolff to address Ketchum’s lack of affordable workforce housing. The founders have decades of experience in the housing, finance, and construction industries. They are people with long track records of success and of giving back to the WRV. They have been joined in their efforts by housing expert Mark Edlen and Mary Wilson, President of Spur Community Foundation.

What is WRCHT’s Approach?

As a local non-profit, WRCHT has devised a novel financing format for workforce housing that reduces the cost per unit by about one-third. They do that by:

Issuing tax-exempt bonds instead of depending on higher-cost taxable bank debt
Instead of using expensive equity in their projects, they issue low-interest housing bonds to local not-for-profits (a form of subordinated debt), who get a right to a unit for their workforce housing.
As a non-profit, WRCHT is exempt from property taxes.

In contrast to a rent level set based on government regulations, WRCHT charges tenants a rent set at not more than 30% of their income. 30% is the government’s definition of “affordable” housing. If the tenant’s income goes up, rent goes up. If it goes down, rent goes down. As long as it generates enough cash flow to cover its costs, WRCHT, as a non-profit, is indifferent to how much a tenant pays.

WRCHT is outside of BCHA/City of Ketchum control. As a non-profit providing housing to essential workers, WRCHT provides housing to people who work in the community. They do not have to use Federal income cap limits, so they can provide housing to the teachers, health care workers, first responders, City/County employees, Federal/State employees, and non-profit workers that the City’s Bluebird system won’t accommodate because they make too much money. THIS IS A CRITICAL POINT.

This approach is a win/win/win/win

· It is a win for employers. They get housing for their workers by putting up a bond. They can redeem that bond and receive 100% of their money back, with interest, if they no longer have the housing need.

· It is a win for essential workers who will have access to stable, affordable housing in the community they serve.

· It is a win for our community to have these essential workers living in the community.

· It is a win for other community workers, as it reduces competition for scarce housing resources.

A Unique Local Solution to Our Unique Local Challenge

With WRCHT, we have locals doing this as a non-profit, working to create truly affordable, truly workforce housing.

This approach stands in stark contrast to the approach of the Troika of Bradshaw/Breen/Hamilton and Ketchum Housing Director Connelly. On the one hand, WRCHT has an approach that addresses the needs of the community. On the other hand, we have an approach that will destroy Ketchum as a special mountain town.

While I remain critical of the KURA project's location, I applaud WRCHT for stepping up with a local, non-profit, and, most importantly, an essential workforce solution for Ketchum and the WRV.

Points of Disagreement: Location and Parking

The WRCHT principals and I disagree about the Washington lot as an appropriate location for one of their projects. They make a solid point. In their way of thinking, people should live close to where they work. I don’t disagree in principle. But I don’t think the Light Industrial Park or the south end of town are all that far away from the town center. Their counter to that is that the City hasn’t offered them land in those locations. It begs the question of the City—why not?

My concern is that we have scarce resources in terms of money, land, and town character and that we should allocate those resources to maximize their benefit to the residents of Ketchum. In my calculus, KURA isn’t doing that, but I recognize other Ketchumites may give these factors different weightings.

WRCHT also thinks their project won’t have as big an impact on parking in the retail core as I estimate it will. While they acknowledge the reduction in parking spots from 65 to 47, they think most of those spots will be available to shoppers during the day when they are needed.

I disagree. Isn’t the point of putting workers in the retail core so they can walk to work? If they aren’t walking to work, why does a large-scale apartment building need to be in the retail core? If they do work in the core, that means their cars will sit parked during the day.

Also, parking is needed in that area not just during the day; it is also needed in the evening for restaurants, events at the Limelight, and events at The Argyros. And it will probably be needed for events at the new hotel going up across the street from the Limelight and at the Marriott when PEG gets that monster built.

WRCHT and others have suggested that the City could do a better job optimizing its parking spots. I agree (see our post on parking). They also note that there are dozens of privately owned, underutilized parking spots in the retail core and think the City could be proactive in loosening up some of that supply. That is a creative thought that is worth looking into.

All that said, I don’t think it is incumbent on WRCHT to solve Ketchum’s parking challenges. The City and KURA are supposed to do that. Yet they continually make the parking situation worse. All indicators are that demand for parking in Ketchum is going up while the City and KURA are permanently eliminating dozens of parking spots in the retail core.

Sign the Petition

There is a petition circulating to stop KURA’s permanent parking restriction plan. Here it is:

https://www.change.org/p/pause-washington-street-lot-development

The City Should Get Out of The Housing Business

The City should shut down its Housing Department and outsource its housing program to WRCHT and ARCH (more on ARCH in a later issue).

It would be a win-win for almost everyone (except the Troika and City staff). Eliminating an expensive bureaucracy would save us a fortune, and the combo of WRCHT/ARCH would generate the kind of housing we need rather than the kind that will destroy our mountain town. Employers would be better off, and employees would be better off.

We would be better off.