Vol2No6: How Ketchum Council Spends Its Time (And Your Money): Housing & Corporate Welfare

I think that's a good indicator of their priorities

When I get a chance, I will gather all the City Council agendas from the past seven years, put them into ChatGPT, and ask, “What does the Ketchum City Council care about? List in order of priority.” I think development will be a priority, but let’s keep an open mind.

In this week’s Council meeting, they spent two hours discussing Housing, World Cup preparations, and Bike Lanes. Below, I summarize their actions. They only got the right answer for Bike Lanes (they punted until next year). No public comment was permitted.

Oh, they have “heard” the community and will extend the public comment period for the Comprehensive Plan. However, there is nothing definitive about how long or how they will let people know.

HOUSING: The Self-Licking Ice Cream Cone Wants Another Scoop

If you are a public servant who runs a large budget program but no one wants to avail themselves of your program, what do you do? You do everything you can to create your own demand. Your job security depends upon it! It was fascinating to watch this play out in the Council Meeting.

The Council got a report on OPP, the Ownership & Preservation Program (OPP) from a BCHA (Blaine County Housing Authority) contractor (who is paid for by Ketchum taxpayers).

Context: Achievements of The Ketchum Housing Department

Ketchum has had its Housing Department (KHD) for over three years. In that time, KHD has

• produced the Housing Action Plan,

• produced an update to that plan,

• built out a staff that costs Ketchum taxpayers almost $500k per year, ¹

• Implemented Lease-to-Locals to house Ketchum and non-Ketchum workers in and out of Ketchum,²

• sent $40k to BCCF for use outside of Ketchum,³

• initiated and got Ketchum taxpayers to pay for a mediation program that benefits people outside of Ketchum,⁴

• became the staff for BCHA,⁵

• screened applications for Bluebird,⁶

• created a plan to build four more Bluebirds⁷

• massively increased its budget with a LOT tax

But how many Ketchum workers have they housed? We don’t know, and they aren’t telling. How many of whom have they housed? Are they the Ketchum teachers, health care workers, and first responders that the Mayor said are his priorities? Again, we don’t know, and they aren’t telling. How much money have they spent to house people? You get my drift.

In this post, I will refer to BCHA rather than KHD; for the life of me, I cannot tell the difference. BCHA staff (paid for by Ketchum taxpayers) administer the OPP program (as well as Bluebird application screening).

OPP Had Three Takers in 2024

However, we know that three people used OPP to purchase homes in Ketchum in 2024. They received 30% of the purchase price in exchange for a 30-year deed restriction that limits the sale of their homes to qualified workers and their home appreciation to 3% a year.

Three people. In an entire year.

Why is there so little demand for this program? It sounds awesome! The City will pay for 30% of your house! You can work anywhere in Blaine County for anyone you want. You don’t even need to work full-time.⁸

BCHA thinks it’s because the OPP program is not well-known. That could be true. Mr. Hutchinson echoed that during the meeting. But doesn’t BCHA have a waitlist of hundreds of people who want to live in Ketchum? Why are so few of them not jumping at this opportunity?

Self Licking

So, what does BCHA want to do? They want money from Ketchum taxpayers to advertise the program via social media, direct mail, and IME ads.⁹ My favorite is that they will pay “brand ambassadors” to promote OPP. Remember the Bud campus rep in college? They have a future in Ketchum.

They also want the Ketchum Council to expand the program to use Ketchum taxpayer money to help people buy houses in Sun Valley and Hailey. Why not Bellevue? Or Carey?— based on the income caps, that’s where the people who qualify for this program currently live.

Remember,

• You don’t need to work in Ketchum.

• You don’t need to work full-time.

• You don’t need to be an essential worker.

• You don’t need to come up with a downpayment.

Yet the Ketchum taxpayer will pick up 30% of your house cost.

This does not sound so great for Ketchum taxpayers.

Why OPP Doesn’t Work—the Appreciation Cap

No responsible parent would advise their child to enter this program. No person who can do math would do this program. No one with experience trying to get out of this program would recommend it to someone coming in. Why not?

Maintenance > Appreciation —> Money Loser

Annual maintenance for an aged condo will run at least 3% of the purchase price. The experience of other cities with appreciation caps is that the owner is disincentivized to maintain the property to a marketable standard. There are some real horror stories about this from Aspen. Locally, an example would be the condo (condos?) the City bought for this program in one aged complex that will have massive assessments for the roof and soon the sidings.

The Wall Street readers of this will understand that you have sold a put—you have all of the downsides of homeownership without all of the upsides. Most hedge funds don’t let their portfolio managers do this, but it is public policy to encourage low to middle-income people to do this. Given that only three people took the City up on this program, maybe the rest of the target market understand the math better than the City Council does.

Roach Motel—easy to enter, hard to leave

If you enter the program, and then meet with material success and want to sell your condo and move into market rate housing, good luck. You will find yourself caught in a BCHA Catch-22. Market rate units tend to move quickly, while BCHA deed-restricted condos move much more slowly. Ideally, to escape subsidized housing, you would buy your new unit before someone else does and then rent out your BCHA unit until there is a buyer so that you don’t have to cover two mortgages.

You can’t do that. BCHA prohibits you from renting out your BCHA unit and owning two homes simultaneously. Think about that.

This is not theoretical. Instead of celebrating their success, BCHA has almost bankrupted a local public school teacher in this exact situation.

Bluebird May Be The Better Option for You

While OPP has a higher income cap than Bluebird, it may be a better deal depending on your situation. This is especially true if you are retired and just want a cheap place to live in Ketchum or plan to stay here for only a few years.

Instead of selling a put, you are buying a call. There is no maintenance cost risk, and you can stay or leave whenever you like. It’s also brand new rather than 40 years old.

There is a Better Alternative For OPP—ARCH / WRCHT

Given the low demand for this product, why double down on it? Why spend money to promote something that people don’t seem to want, or that may not be in their best interest? Why not accept that the government might not be the best provider of this solution?

There is a better way: ARCH. ARCH, with no dedicated LOT tax funding, has built far more housing units for Blaine County essential workers than BCHA has done in the same period.

And then there is WRCHT, which is quickly catching up.

Or, get rid of the appreciation cap.

We don’t need BCHA to do this with Ketchum taxpayer money. Instead of giving BCHA another scoop for their self-licking ice cream cone, why don’t we call it a day and find a way to help the non-profits do their thing?

Note: OPP is the program that Mr. Hutchinson and Mr. Cordovano have championed and where they want to put the most money. Mr C., in particular, wants to expand Ketchum’s “investment” in OPP to other WRV cities. He said that people would buy houses and work in Ketchum. And yet, from what BCHA has disclosed on Bluebird, half the tenants don’t work in Ketchum. They want to live in Ketchum while they commute to Hailey or elsewhere. Nice. I wish they wouldn’t experiment with Ketchum taxpayer money.

World Cup: I’m All For It, But Why Do Ketchum Taxpayers Have to Subsidize It?

According to Mr. C, Ketchum's “real lifers” are stoked for this. When he says things like this, I cringe. I am not a “real lifer.” The vast majority of Ketchum residents are not “real lifers.”¹⁰ He is working with BCSO to suspend enforcement of open container laws for World Cup spectators. I know the homeowners of Warm Springs will love all those red solos in their yards.

As I have documented, Ketchum taxpayers will be footing a large bill to subsidize hosting this event. Ketchum staff are busy working on this, including coordinating with the Department of Homeland Safety. There has been more air time at Council meetings for subsidizing Sun Valley Co and 5B Productions than for the $100mm in liabilities for Ketchum’s deteriorating roads and sidewalks.

If you live near the Warm Springs base, you will be access-controlled for your property, not for a day, but for a week. Do you want friends to pop over for a cocktail that week? It's not happening if they need to drive. SVC should give you free VIP tickets.

If you are a merchant on Main Street, you know those two blocks where they took out all the parking spots. That’s where 5B Productions will be holding its street party—not for an evening or a day, but for three full days. 5B should give you VIP tickets.

BIKE LANES: Punted to Next Year

Numerous plans call for extending bike lanes into the center of Ketchum’s core. The consultant made what I think is a compelling argument that, given the width of our streets, if we want to preserve parking, the only way we can install bike paths is to make some streets one-way and convert a car lane for bikes. Looking at the map, the sensible pathways are 4th Street for East-West and Leadville and Washington for North-South. The consultant proposed a pilot project to test how it would work before irrevocably committing to it. Again, that seems sensible to me.

The open questions are:

• Is this what the people of Ketchum want to do?

• How does seasonality fit into this (aka snow)?

• How much will it cost?

• Where will that money come from?

• Where will the lost parking on Leadville be replaced

Yes, there is a loss of some parking spots. But the City is committed to replacing them. I love the wording of the last assertion on this slide:¹¹

The cost was not discussed. However, we learned that the City plans to reinstall the HAWK light across Main Street when 4th Street gets a two-way bike lane.

The proposal was to conduct the pilot this summer after holding open houses in March. However, given the work on the Comp Plan and the negative feedback from the Main Street project during its construction, the Council decided to remand the project to staff for more work on the open questions and not proceed with a pilot in 2025.

I think that is the right answer, especially since we will not know the impact of the dozens of Bluebird cars on parking and traffic in that area until it is fully occupied.

What do you think?

Before We Go…A Little Bit of Aspen in Ketchum. Brought to You By Whiskey’s…

Note: this is not advertising. We don’t take advertising in The Ketchum Sun. ¹²

You gotta read the caption at the bottom of the picture to understand what Whiskey’s thinks Ketchum needs.

I guess I am just an old fuddy-duddy. But then, all the acts they are bringing in for the World Cup will help us relive our salad days: the 90s.

1. Ironically, one staff member doesn’t live in Ketchum. Or the WRV. Or even Idaho.

2. Some of this is corporate welfare as I have pointed out in other posts.

3. Blaine County Community Foundation. I think they do some great work (I have donated to them), but it is bad governance to wash Ketchum taxpayer money through BCHA to BCCF. And it doesn’t look good that the BCCF director is married to someone who just joined the BCHA board.

4. In a rare instance of fiscal prudence, the Ketchum Council off-loaded this one to Blaine County to pay for.

5. This is such an obvious conflict of interest that I hope the next Council rectifies it. TERRIBLE governance. Indeed, the KHD Director, who is also the BCHA Director, wrote in a grant application on behalf of Ketchum that if Ketchum got the money, they would immediately move it out of the Ketchum budget to BCHA, expressly so that the Ketchum Council could not oversee how the money was spent (p.46 of HUD application filed by Ms. Connelly last year).

6. You can’t make this stuff up. One of the justification for Bluebird was that BCHA had hundreds of people on their wait list that would fill it up. And yet…they haven’t filled Bluebird. Did they lie? This is the same waitlist where no one wanted the affordable units at 1st/Washington and no one wanted the deed restricted unit of a BCSD teacher when she tried to sell it. As I have pointed out in other posts, we need to get the data on who needes what kind of housing where—we can do that via surveys and cell phone data. BCHA and KHD refuse to do that. “If we build it, they will come.” Okay, but please don’t run your experiments with my tax money.

7. On some of the most valuable land in Idaho. If they get their way, you will be able to retire on a social security check within walking distance of River Run ski lift.

8. Or even work at all in some circumstances.

9. I wonder if they will advertise for OPP in Twin Falls, like they did for Bluebird. Why not Boise? Why not a national campaign?

10. 🤮

11. You see what I did here. I made you look down here to read the fine print. Just like you had to do in that last point in the slide. “Maintain Existing Parking” in Ketchum-speak does not mean what people who speak English think it means. With the City, you have to read the fine print.

You know I how learned this about Ketchum-speak? Well, yes, the Housing Action Plan does define “homeless” as including people who do have homes, and “workforce” to include people who choose not to work (see p 7 of the HAP). KHD are transparent on their bastardization of the English language.

But I first learned this when I tried to find the definition of “community housing.” When the City permitted Bluebird, I thought it was a direct violation of the zoning for CC-2, which prevents apartment complexes in the retail core. I spent days trying to find it. And then, there it was! In a footnote to a table. Yes, “community housing” was defined in a change to a footnote in a table and that’s how they got Bluebird to be “legal.” Spot zoning? Maybe. Violation of the plain English requirement for Idaho zoning codes—you bet your ass.

The Mayor loves to talk about the transparency of the his administration! That was the moment I realized that they did not respect us.

12. Although, at a price…