V2N25: Why Ketchum's Housing Approach Won't Work and How to Fix It

Yes, I know this is too long. You should have seen the first draft. But I didn't have time to write you a shorter blog post.

Apr 14, 2025

People want solutions to Ketchum’s “housing crisis.” I propose some here, but please bear with me as we first scope the problem we are trying to solve. As they say, “It’s complicated.” But maybe it's not as complicated as you have been led to believe.

What is the goal of the City of Ketchum housing policy? What problem are they trying to solve?

The answer depends on who you ask and the context in which you ask it. Sometimes, it is to make housing affordable for working people. Sometimes, it is to address Ketchum’s workforce shortage. Sometimes, it is “to create a wide range of housing options for various household incomes.”

Why is it so ambiguous?

WHAT THE CITY SAYS IT WANTS TO DO

Let’s look at the goals of Ketchum’s Housing Action Plan (HAP):1

VISION
Increase access, create, and preserve homes for residents at a range of income levels and life stages to maintain a thriving local community.
GUIDING PRINCIPLES
Support a collaborative, coordinated strategy to:
• Ensure every person has a safe, healthy home
• Ensure housing is affordable to our local workforce
• Sustain an inclusive, year-round community

GOALS
Goal 1: Produce + Preserve Housing
Act to create and preserve housing affordable for our local workforce and community housing.
Maintain a healthy balance of short-term/visitor lodging and resident-occupied housing.

Goal 2: Update Policy to Promote Housing
Build a regulatory and policy environment that strongly encourages housing development with an emphasis on community and workforce housing, and which is consistent with other community goals.
Goal 3: Expand + Improve Services to Create Housing Stability
Address immediate needs of unhoused and people at risk of displacement in our community.
Integrate, improve, and expand supportive services, rapidly rehouse, and prevent future displacement throughout the region.

Goal 4: Expand + Leverage Resources

Increase resources to support Action Plan Goals, including funding from a range of public and private sources.

Goal 5: Inform, Engage + Collaborate
Invest in building local capacity to make informed decisions about and execute on housing action.
Support regional partnerships and on-going communications to increase coordination and housing impacts.

This sounds… terrific. But read through this and think about it. Is it reasonable? Is all of this the proper function of a city government?

The ambiguity of the HAP is ideal for bureaucratic bloat. Based on this, the housing department can justify pretty much anything it wants to do.2 What does “affordable” mean? What does “balance” mean? What does “increase resources” mean? What does “invest” mean? What does “support” mean? What does “strongly encourage” mean? They mean whatever the Ketchum Housing Director wants them to mean. That is a big problem.

What is missing? Any reference to cost, who will pay for what, or prioritization for allocating scarce resources. My interpretation of the bureaucratese is that Ketchum’s policy is that anyone who wants to live in Ketchum should be able to, and if they can’t afford it, Ketchum taxpayers will help them out. My inference is reinforced by the definitions of “workforce” and “unhoused” in the HAP (on page 7).

Is that what the residents of Ketchum want? If so, put it to us plainly and let us vote on it.

ARBITRARY METRICS LEAD TO BAD OUTCOMES

How will we know if Ketchum is achieving these amorphous goals? That’s tough, but the HAP has some metrics.

10-YEAR PERFORMANCE MEASURES
Progress will be tracked against these measures at quarterly coordination meetings and each annual update of the HAP, and reported back to the community.
Secure a minimum of 660 housing units in Ketchum over the next 10 years for local, workforce housing (build new, unlock existing housing, convert existing to more affordable cost, preserve existing in perpetuity).
Ensure that at least 60% of Ketchum’s housing stock is owner- or long-term renter-occupied.
Ensure that 40% of Ketchum’s workforce can live in Ketchum.
Prevent displacement and assist 100 households annually who are cost-burdened, unstably housed or unhoused with supportive services and alternative housing options.
Secure a minimum $60M in direct, local investments in the next 10 years, to leverage up to 5x that amount in investments (includes 20% of City funds allocated to projects outside of Ketchum).
Allocate 20% of City housing funds for significant county-wide actions.
Through an annual survey, achieve a minimum of 51% satisfaction/public approval of housing action, coordination and results.

What do you think about these metrics? How do they align with the goals? With your goals?

I think they are…terrible. They are unrealistic (40% of workers live in Ketchum, and 60% of the housing stock is owner-occupied) and arbitrary, with no grounding in economic reality.

Let’s apply some common sense. There are about 1800 full-time households in Ketchum. Adding 660 increases the number of households by over one-third over 10 years. That doubles the “normal” rate of Ketchum population growth. What does that mean for traffic, parking, fire, police, etc.? Where does that 660 number come even from? In my analysis, it is pretty much just… made up. Read the HAP and see if you disagree.

WHAT’S THE REAL IMPACT OF THE CITY’S APPROACH?

A sham facade that incentivizes tourism development. Take the “big lie” about upzoning. The Mayor says building more condos at the Baldy bases will make housing more affordable in Ketchum. He knows that is not true. So, he has introduced the rationalization that “a portion” of the new condos will be affordable housing. This is my definition of lipstick on a pig.

A growing housing bureaucracy. The staff budget is approaching $500k per year. The Housing Director continually asks for more staff, citing how overworked they are. I don’t think they are overworked—I think they spend their time on the wrong things. They are my definition of the self-licking ice cream cone.

What are we not getting from the City with our resources? A solution to housing essential workers, such as teachers, first responders, healthcare workers, and city employees.

SOLUTIONS

Is there a better way to deal with our housing situation? Yes. Read on…

STEP 1: DEFINE THE PROBLEM

If we define the problem as “housing is unaffordable,” and our solution is to make housing affordable, that will never happen. We will never make housing affordable in Ketchum because tourists and second-home owners can always outbid someone working at the prevailing local wage for a unit of housing.

We have a workforce shortage problem, of which housing availability is a component. It follows that the housing solution should go to solve the workforce shortage. But which workforce? You could reasonably say any Ketchum worker who makes below the wage necessary to secure housing in Ketchum. How many people is that? We have no idea. But we could find out by asking them. We could do an annual survey of every business in Ketchum and find this out. I have suggested that to the City for years.

Then, we get to a philosophical issue. Should taxpayers subsidize workforce housing for for-profit businesses? I say no. Government handouts to for-profit entities are not the purpose of local government. You might disagree. You might reasonably argue that we do it all the time and should do it for housing. My response to that is, what is the consensus of the community? Do we, as a community, want to subsidize workforce housing for Sun Valley Co? For the Crown family? For Atkinson’s? Where do we draw a line?

We have scarce land, money, and community character resources, and we should prioritize those resources for essential workers. If we have excess resources after caring for that demographic, we can debate the merits of for-profit subsidies.

I propose the following problem definition: How do we ensure that Ketchum has all the essential workers it needs to function as a community?

Scoping that problem is easy. We ask BCSD, St Luke’s, BCSO, the Fire District, and the City of Ketchum how many workers they are short. That’s never been done. I have no idea what the number is, but it is far less than 600 people. Ketchum has 11 full-time firefighters, 30 teachers, 12 police officers, 43 City employees. I am guessing (total guess) that SLWR employs about 150 people. That’s about 250 people in total. That would be the maximum number of housing units Ketchum would need to house 100% of its essential workforce.

The practical number is substantially smaller. We aren’t short 250 critical workers. We are short, what, maybe 10% of the total? 25? 50 at the most?

Then, we can dig deeper to find out why each organization is short people and how housing factors into that. That dialog can help us create the housing portion of the solution.

Do you know which WRV city has adopted this problem definition for its housing program? The City of Sun Valley. They don’t bother trying to house for-profit workers—Ketchum taxpayers have been doing that for them.

STEP 2: REFINE THE SOLUTION(S)

Stay with me here. We have defined our problem as not having the essential Ketchum workers we need, partly because they can’t afford housing. That has two components: “afford” and “housing.” How do we solve this?

Option A: Rent Subsidy (Afford)

We could give them more money through their employers (the City of Ketchum does not pay a living wage to all of its employees) or through a taxpayer housing subsidy. What would that kind of subsidy look like?

According to Airbnb,3 in Ketchum 1BR short-term rental rates range from $4,500 - $6,000 a month. Median occupancy is 55%, and the owner pays 25% of the gross rent in marketing costs. This means the effective net rent to the owner is $6,000 x 0.55 x 0.75 = $2,475 (let’s round that to $2,500 a month). But let’s be optimistic and say that a short-term renter can rent it 70% of the time. That’s $3150 per month. So, to house a Ketchum essential worker in a one-bedroom short-term rental on a long-term basis in Ketchum is $38,000 a year.

The starting wage for a BCSD teacher with no experience is $46k. The government's 30% cap on housing expenses as the limit for affordability means that teachers can afford about $14k for rent, meaning the subsidy they need is $24k.

So if Ketchum is short 50 essential workers, and the housing subsidy needed is the same for all of them, we need to spend $1.25mm per year on housing. We currently spend about 1/3 of that just on our housing bureaucracy.

We can quibble about the numbers here, but this is the kind of analysis we need to understand how much it will cost us to solve the housing problem for essential Ketchum workers. This math could be off by a factor of 2, but it is probably not by a factor of 5.

One benefit of a rent subsidy is that it can convert a short-term rental back to a long-term rental and improve the ratio of locals to tourists. That is good for “community.”

This is decidedly NOT what Ketchum is doing. We are literally housing some nannies in Bluebird. Per the City, only 10% of its tenants are essential workers, which is five units.

Option B: Provide the Housing Unit (Housing)

Before we get into this analysis, from an efficiency and equity standpoint, it is better to provide income support rather than housing units. Why? In addition to being good for the community by taking back short-term rentals (see above), I think it is better for the worker. They can take the money and decide how to use it. They could choose to live in Ketchum, Hailey, Bellevue, or Fairfield. They can do what maximizes their utility function rather than what the City decides is “good” for them.

But let’s say we will force them to live in socialized housing. What does that solution look like? Well, we just built 51 units of that in Bluebird. If we had done this right, we would have already solved the entire housing problem for Ketchum essential workers. Given that we did not and now have granted Bluebird tenants a lifetime entitlement to their units, that is a sunk cost (a suboptimal allocation of scarce resources).

The City just requested proposals (RFPs) to develop community housing at the Lift Tower Lodge (LTL) and on top of one of the YMCA parking lots. According to my analysis, they will waste a lot of money and not solve our problem. The LTL site is awful because the land is so valuable, and the location is so prominent. We don’t need it.4 After we fix our zoning code, we should sell it and put the money (the City estimates it is worth $7mm) to a higher and better use, like fixing the roads and sidewalks.

The YMCA site is a better use of scarce resources. We would be utilizing unutilized space above the existing parking lot. If we develop it without federal money, we can use 100% of the units to house the 50 people we need to house.

How much is a reasonable amount of money to spend on this? Our income support analysis solved the problem with $1.25mm a year (Option A). Using Idaho’s real estate cap rate of 6.6% for multifamily housing, we could “invest” $19mm ($1.25mm divided by 6.6%) to get the same outcome as income support and be indifferent.

$20mm. There is no way we are going to build 50 units of housing anywhere in Ketchum for $20mm. That is only $400k per unit. It is going to cost twice that, say, $40mm.

Economically, the income support option is better for taxpayers than the housing development option. It’s cheaper. Better for the community. Better for the worker (gives them more choice).

Do you think the City of Ketchum will go with Option A? Not this Council.

They will spend $40mm just at the YMCA (remember, they want to develop LTL into something 3x the size of a Bluebird), which won’t solve our essential workforce problem. 🤮

STEP 3: DEFINE THE RESOURCES

Where do we get the $1.25mm a year for Option A or $40mm for Option B? Where do we get the land? How much will the solution cost us in terms of Ketchum’s “character?”

Good news. You already voted for 0.5% LOT for Housing. That would cover Option A. If it’s not enough, shift the other 0.5% LOT for Air (most of which doesn’t even go for air) to Housing.

Option B is harder. The City could contribute in lieu of fund revenue. However, ARCH and WRCHT have built dozens of units for essential workers with minimal city support.

STEP 4: IMPLEMENTATION

I have argued that Option A is a better solution than Option B. Implementing it is much easier and shouldn’t require more than one staff member. If Option B is done in partnership with ARCH or WRCHT, it shouldn’t take more than one staff member either.5

STEP 5: MEASURE SUCCESS

This is easy. Did we solve the problem? Is Ketchum still short of essential workers? If so, we need to modify the approach. But I don’t think we will be.

STEP 6: BE TRANSPARENT

This is also easy. Provide the City Council with a monthly report of how many essential workers we are short, how many are receiving housing assistance, and how much that is costing the taxpayers. Make sure the newspapers get that information.

BCHA IS (IMO) A SCAM, NOT A SOLUTION

I have been critical of BCHA. I have called it the “self-licking ice cream cone” for promoting policies that benefit its staff rather than essential workers. I have said the staff has a conflict of interest in that they work both for the City of Ketchum and for BCHA—the Executive Director of BCHA is the Ketchum Housing Director.

I have said they are inefficient in their spending, advertised for homeless people from Twin Falls for Bluebird, and do not effectively prioritize housing for Ketchum workers or essential workers with Ketchum taxpayer dollars.

I have said that their waiting list is fiction; they use it to manipulate the Ketchum City Council into spending money that does not benefit Ketchum businesses or residents.

I have said that they provide corporate welfare that helps businesses depress wages.

I have said that the Ketchum Housing Action Plan is based on bad data, a flawed premise, and distortions of the English language (like defining the workforce to include people who don’t work).

I have said that BCHA is not transparent.

I stand by it all. In my analysis, BCHA/Ketchum Housing Department fits the “waste, fraud, and abuse” definition of taxpayer resources.

For example, did you know that BCHA tenants only have to live in their homes nine months of the year? That only one household adult member needs to work, and a couple is more likely to qualify if only one works? Or if they work part-time rather than full-time? That BCHA could not fill Bluebird from its waitlist? That BCHA has hired real estate agents to market some of its properties (creating its own demand)?

SOLUTION: OUT WITH THE OLD, IN WITH THE NEW

How do we get from where we are to where we should be? Start with cleaning the house.

Eliminate the Ketchum Housing Department and its staff. Ketchum pays almost $500k a year just for its housing staff. Replace them with a single person in the Planning Department.

Do what every other City in the WRV does and withdraw from BCHA. This would create a bit of a crisis. That’s the intent! The County should own BCHA, not Ketchum taxpayers. As long as Ketchum bears the burden, the County and the other municipalities won’t.

Get the City of Ketchum and KURA out of the housing development business—no more Bluebirds. Instead, the Planning Department would work with existing non-profits like ARCH and WRCHT to provide housing for scarce essential workers.

No more Federal dollars. Getting federal money sounds great, but it has too many strings attached. Housing built with that money does not address Ketchum’s housing problem.

No more corporate welfare that depresses wages. One person told me this week that she had cut back an employee's hours to get their wages below the Bluebird income cap—no more gaming of the system. For-profit businesses should not exist based on taxpayer subsidies.

That being said, we should not abandon local businesses. We should conduct a biannual survey of Ketchum employers to track their labor force challenges and how they deal with them. We should work with businesses to coordinate their efforts to house their employees.

In tourist zones, we should require developers to provide 100% employee housing for all employees making less than the average wage in Ketchum.

Let’s eliminate the in-lieu option for developers to buy their way out of their community housing obligations. This would result in units being built more quickly and community housing being distributed rather than concentrated. It would make a better Option B pathway with more diversity of housing than low-income housing projects.

Fix the FAR exceedance allowance and cap building sizes/heights in the commercial zone—there should be no more massive four-story (or more) boxes in the Ketchum core.

Let’s stand up to Boise on STRs and limit the number per neighborhood. Permit ADUs only with a deed restriction against STRs.

WHAT’S WRONG WITH THESE SOLUTIONS? I WELCOME CRITIQUE

I do not pretend to have “the” answer. I am just one of your neighbors who lives in Ketchum and pays taxes. I only have the information the City chooses to share and what I can glean from the Internet. I am just one person ruminating on how to keep Ketchum from becoming one big hotel, and I am not afraid to put my thoughts out there in public to be judged.

If you think I am wrong, I want to learn from you. Show me the errors in my approach and math, and offer an improved solution set.

I recognize my approach doesn’t address the problem of for-profit company worker shortage because I assert that is not the proper function of government. But if you disagree with that and want to provide corporate welfare, we can go through the same process with employers. How many are they short?

There are problems this definition won’t solve. For example, if you think it is the right for anyone who has worked in the Wood River Valley for the past five years to be able to retire into taxpayer-subsidized housing, this is not a solution. Or, if you think someone should only have to work at most 30 hours for three quarters of the year to qualify for taxpayer-subsidized housing, this won’t solve that.

I mention this because Bluebird prioritizes retirees and incentivizes gaming the system, as will future Bluebirds. That misallocates scarce taxpayer resources and is not transparent to the voters.

We have other “housing adjacent” problems in Ketchum. How do we attract families with children so we have a future as a community? How do we stop the hotelization of housing units? How do we keep housing from looking like a box?

These are different problems from ensuring that a lack of housing does not impede fully staffing our essential workers. They require their own solution sets.

We know that the Bluebird approach doesn’t solve any of these problems, yet it is our predominant approach.

WHAT CAN YOU DO?

You can do what most people in City Hall do and ignore me. Or…

I bet you have some ideas. Maybe better ideas than mine. Share them. Start your own blog. Write a letter to the paper. Speak up at public meetings. Contact our elected officials. Run for office.

Get in the game. This problem will not solve itself, and our current approach will not work.

We get the government we let them do to us.