The City of Boise is facing an unprecedented housing crisis. Rapidly rising rents and appreciating home values have led to renewed conversations among city leadership on the right actions to take to address these issues and build a comprehensive set of housing policies, programs, projects, and partnerships. To understand the challenges and opportunities, the City of Boise contracted with Agnew::Beck Consulting to quantify the supply and demand for housing within city limits. Results from this analysis will be used by the city to inform policy decisions that impact housing development and preservation as well as specialized populations most affected by the housing crisis.
Housing Needs Analysis
Using American Community Survey data from the U.S. Census, the analysis projected housing need by income over the next ten years. Five primary factors were considered in the projection including population growth, homes that will need to be replaced, overcrowded units, households experiencing homelessness (using data from the Homeless Management Information System), and cost-burdened households who are unsustainably housed.
Utilizing data from COMPASS (Community Planning Association of Southwest Idaho), and U.S. Housing and Urban Development, the analysis examined the supply of housing over the last ten years by reviewing building permits. This includes considering any demolition or loss of housing and the creation of new housing units, including accessory dwelling units and mobile homes.
The analysis assessed data from the City of Boise to map existing vacant and underutilized land. Cross-referencing the land availability with housing demand allowed for a projection of the necessary density to supply all needed housing to city residents.
The analysis reviewed the delivery of housing for a few populations known to be acutely impacted by the housing crisis, including people of color, students, resettled refugees, and people experiencing homelessness. Sources of data included key informant interviews, the Homeless Management Information System, and Boise State University.
Through interviews with developers, Agnew::Beck developed a model that simulates a housing development pro forma. This model allowed the analysis to consider driving factors in the cost and financing of a housing project.
- Housing demand has increased: The City of Boise requires 2,770 units every year for the next 10 years to meet demand; 77% of this demand is for housing affordable to those earning 80% or less of the area median income.
- Construction is not keeping up with demand: Over the last 3 years, housing construction in Boise produced 4,146 units less than the need.
- Affordable housing is increasingly more difficult to build: The gap financing needed to build a unit at 60% AMI is up to $115,000 per unit at the time this analysis was conducted in the summer of 2020.
- Land constraints necessitate more compact use of existing land: Neighborhoods, on average, need to increase housing density by 26% to meet housing demand.
- Development is concentrating in a few planning areas: 41% of all new Boise construction in the last 5 years occurred in Southeast and West Bench.
- Specialized populations have unique housing needs: Homelessness, increases in refugee resettlement, and student enrollment create specific needs for dedicated housing development.
The City of Boise has the following key opportunities to consider as it contemplates policy decisions and strategic next steps:
- The scale of the housing crisis is too large for one city to tackle and requires regional partners: It would cost roughly $4.9B in development costs to address the entire affordable housing deficit over the next 10 years. This is a massive deficit to finance. The city will require regional and statewide partners to address the scale of this issue. It will be necessary to focus on specific income and population segments to maximize impact, instead of developing policy with too broad of a scope.
- Clear city priorities will aid decision-making and highlight trade-offs: Given constraints, the city is facing stark trade-offs. There is finite available land in neighborhoods to consider. There are finite resources to finance the development and preservation of housing. This indicates a need for the city to create clear criteria for a housing project to receive financing from the city.
- Construction costs and other data are constantly changing: To stay relevant, regular data updates are recommended for permitting data (monthly), construction costs (quarterly), and Census estimates (annually).
- The city has five key levers to support the creation of housing: On both a strategic and a project by-project basis, the city has the following key levers as decision points. Each of these levers affects the feasibility of a project, the amount the city may choose to invest, and their direct impacts on the public good:
- Land: The cost of land represents between 7-10% of development costs.
- Unit mix and unit size: The affordability of the units, the size of the units, and who the units are intended to serve can drastically impact the cost of construction and the amount of gap financing needed.
- Gap financing: The city must determine, for any given project, its ability and capacity to provide the funding that enables a project to be financially feasible.
- Capital stack partnerships: Every project provides an opportunity to leverage non-city resources and have additional funders supplement gap financing. A strategic plan that considers these partnership opportunities is critical to not only identify and time funder engagement but also establish processes by which partners can be approached effectively.
- Timing and phasing: Strategy, timing, and phasing of all project components need to be considered as high impact triggers.
The following perspective and results of the housing needs analysis are broken up in the following ways:
- Demand: Based on the five driving factors mentioned above, the analysis determines the demand for housing over the next 10 years.
- Supply: The analysis distinguishes the current supply of housing, new construction distribution across city planning areas, and the influence of the cost of development on the delivery of new housing units.
- Land: The analysis reviews current vacant and underutilized land within the Boise area of impact and the density needed to meet the housing demand over the next 10 years.
- Specialized Populations: The impact of the current housing market is not allocated evenly across all populations. The analysis considers housing challenges and opportunities on a few select population groups.
When considering how to estimate housing demand, the analysis considers earlier approaches. Past City of Boise commissioned studies did well in the consideration of how population growth (or retraction) impacts housing need over time. These studies also understood churn – housing units being taken off the market through disrepair or other methods. However, these past housing studies did not include other characteristics that are important to measure to understand the true need for housing units and inform policy makers of those needs. These additional factors, such as cost-burdened households and homelessness, need consideration to promote opportunity for these populations and to stem poverty through an equity lens that considers marginalized communities most drastically affected by changes in the housing market. (For more information on the methodology behind each factor, see the Appendix.)
Specifically, the analysis looked at the following characteristics that influence housing demand:
- Population growth: Boise continues to be one of the fastest growing cities in the country. How many people entering the market will need housing? (This subtracts out the number of units/people leaving the market.)
- Housing condition: Some homes are aging out of the market. How many units do we need to preserve or replace due to their poor condition?
- Severe overcrowding: Some households are above a healthy occupancy rate (i.e., more than 1.5 people per bedroom, on average) in their homes. How many homes are needed to reduce overcrowding?
- Homelessness: Some people are unhoused and experience daily trauma as a result. How many units are needed to serve those without housing?
- Deficit for Cost-Burdened Households: The market is not currently meeting the demand at every income level. How many units will it take for supply to meet demand for those who are currently paying more than 30 percent of their income toward housing?
|ANNUAL NEED||TOTAL NEEDED BY 2030|
|Ada County (total need = Boise + Other Jurisdictions)||6,684||66,839|
|City of Boise||2,773||27,725|
|Other County Jurisdictions||3,911||39,114|
The housing units needed to meet demand are not allocated evenly across household income categories. Households that earn less than the area median income – a standard comparative measure of earnings in a community – are more likely to need a housing intervention. As seen in the supply analysis below, the housing market is building units in Boise. However, available research suggests that these newly developed units are more likely to attract higher-income households.
|INCOME TYPE||ANNUAL GROSS INCOME||AREA MEDIAN INCOME (AMI)|
|Very Low Income||$20,250||0-30%|
|Upper Middle Income||$80,880||101-120%|
*numbers are representative of a 3-person household and pulled from www.hud.gov, effective June 1, 2020.
The following chart details how the needed housing units over the next decade break down by income category:
|INCOME||POPULATION||UNITS NEEDED EACH YEAR|
SOURCE: American Community Survey/Census and Homeless Management Information System
The population growth of the Treasure Valley has coincided with peak season for housing development. The analysis, in addition to considering the need for housing over the next decade, matched the demand with the current supply of housing.
To fully comprehend the development patterns, a few housing types must be defined:
- Single-Family Home: A housing unit that serves one household on one parcel of land
- Multi-Family Home: A building that houses more than one household in separate and distinct living units (examples: duplex, townhome, or apartment complex)
- Accessory Dwelling Unit (ADU): A housing unit on a piece of land that also serves a single-family home but remains an independent living space from the single-family home (example: an apartment over a garage)
- Manufactured Home: A home that is built in a factory and then transported to a piece of land (example: a mobile home)
A review of permits from the last three years shows that development in Ada County has exceeded demand, while the City of Boise has not kept up with housing demand. As shown below, Ada County has seen significant development and has exceeded demand by 748 units over the last three years. Boise, however, has not kept up with the demand, producing 4,146 units less than the demand.
It should be noted that 2020 development occurred during an unprecedented global pandemic, brought on by the spread of COVID-19. This impacted development patterns significantly in the early and middle part of the year. However, 2021 preliminary data suggests that development has continued at even more aggressive levels than its 2019 pace, suggesting that the 2020 data could be an aberration and not a trend.
NUMBER OF UNITS NEEDED
|CITY OF BOISE||ADA COUNTY|
|ANNUAL HOUSING UNITS NEEDED||2773||6684|
NUMBER OF PERMITTED UNITS
|YEAR||CITY OF BOISE||ADA COUNTY|
Source: COMPASS Building Permitting open data
Development in Ada County produced 748 units above the need (2018-2020)
To understand housing supply, it is necessary to understand how the new construction of units compares to units lost to demolition. Review of the permitting data demonstrates observable trends. Over the last 3 years, the number of permitted demoed units has represented roughly 5% of the newly constructed units. In other words, for every 100 units created in Boise, five will be lost to demolition. This may not necessarily be a negative trend, because one parcel of land could demolish one unit of housing and develop 10 new units, for a net gain of nine units. It is integral for policymakers, as demo permits are reviewed, to consider how incentives and zoning regulations can be used to ensure that demolition contributes to a net gain of housing units.
Source: COMPASS Building Permitting open data.
New construction occurs across different housing types, as listed above. These trends illustrate strong growth in the multi-family market. This is a positive sign for meeting housing demand, given that multifamily construction is a denser housing form that uses less land to produce more units. The same is true with an increase in accessory dwelling units, which infill housing units on parcels.
NEW CONSTRUCTION TRENDS
Source: COMPASS Building Permitting open data.
The analysis reviewed development patterns across Boise’s planning areas. Initial findings from the analysis revealed:
- The Southeast Planning Area has seen the most new construction in the last 5 years, representing 22% of all development. This is likely due to the Harris Ranch planned development.
- The Northwest Planning Area has seen the largest annual decrease in housing development over the 5-year trend. This was a change from 359 permitted units in 2016 to 23 permitted units in 2020.
- Several planning areas, such as the Airport and the Foothills, have little developable land due to commercial or conservation zoning.
- 60% of all new accessory dwelling units in the last five years were constructed in the North End.
|TOTAL UNITS||% OF 5-YR TREND||# OF NEW UNITS IN 2016||# OF NEW UNITS IN 2017||# OF NEW UNITS IN 2018||# OF NEW UNITS IN 2019||# OF NEW UNITS IN 2020|
|Area of Impact||145||2%||39||83||8||0||31|
COMPACT DEVELOPMENT PATTERNS
% of multi-family units by planning area (2016-2020)
Housing supply is heavily impacted by the cost of development, this includes the cost of construction, financing, and land acquisition. Nationally, the cost of development, according to the Nationwide Construction Price Index, has increased by 30% in the past five years. Interviews with developers in Idaho suggest that these numbers are a lagging indicator, and that the state has seen even quicker appreciation in the last 18 months.
Construction costs interact with the price of rent, as the amount of rent charged at a property informs the amount of financing that a developer can secure to construct the project. Increased construction and rental costs are therefore directly related.
Based on an estimate of the cost to develop one housing unit determined through a pro forma review and interviews with developers, the analysis projects the cost to fill all housing needs in Boise as follows:
- Number of units needed annually (over the next decade) for those earning
less than 80% area median income: 2,145
- Estimated cost to develop one unit: $230,000
- Annual development cost to fulfill affordable housing need: $493M
- Cost of development over 10 years to fulfill affordable housing need: $4.9B
NOTE: The cost of developing one unit depends on many factors. The above figure is based on current development assumptions. The cost will not be consistent over a 10-year period.
The analysis reviewed the current vacant and underutilized land in each Boise neighborhood to understand the opportunities and challenges in developing enough land to meet the demand for housing over the next 10 years. It is significant to note that the analysis was not intended to recommend specific plots of land for development, only to consider trends in vacant and underutilized spaces. The analysis finds that increased utilization of existing land is necessary to meet projected housing needs over the next ten years. Work in housing and land use must remain consistent with the goals and actions in the City of Boise’s Climate Action Plan, so that all tactics on land development can be supportive of nurturing a healthy and livable planet.
- Neighborhoods, on average, need to increase housing density by 26% to meet demand for housing over the next 10 years.
- Vacant land for housing is limited.
- Underutilized land is a subjective consideration; this makes it difficult to identify overarching trends. It is recommended that the City of Boise further investigate and identify strategic areas of underutilized land.
- When considering land as a housing asset, it is imperative to remember the trade-offs in dedicating land to open space, agricultural lands, housing, activity centers, parks, and industrial uses.
- If there is a goal of increasing housing opportunities in all areas of the city and sharing the burden of development, it will be vital to develop specific housing goals by neighborhood to meet the demand for housing.
City of Boise Vacant Lands
One question deliberated as vacancy trends were analyzed was where opportunities may exist for new development on vacant parcels over half an acre.
Areas of interest based on residential and commercial vacancy:
- Southwest: 762 acres
- West Bench: 291 acres
- Airport: 162 acres
- Northwest: 146 acres
It should be noted that these numbers come from 2018 data and may have already been developed. Any vacant acre identified does not indicate that it is a quality opportunity for housing development. Further investigation and neighborhood input is required.
Though the acreage identified may appear large, s development of every acre identified here at the current area density would not meet the demand. For instance, it would take a density of five units per acre across all vacant land to meet the demand. As shown below, the current density of Boise is 1.82 units per acre.
City of Boise - Density Needed by 2030
Total Units today: 109,111
Density today: 1.82 units per acre
Total units needed by 2030: 136,836
Projected density to meet demand: 2.29 units per acre
The analysis reviewed a few key neighborhoods, using American Community Survey data from 2019, to develop a profile and provide perspective to the City of Boise on the impact of housing need and land availability. The two neighborhood profiles included here are for illustrative purposes only and do not signify a particular need to focus on these two neighborhoods.
- Population: 5,629
- Population density: 8.8 individuals per acre
- Total acreage: 640 acres
- Housing density: 4.73 units per acre
(3rd highest density citywide)
- Minority population: 21%
- Median home value: $180,856
- Vacant development potential:
19.2 acres (3% of total acreage)
- Population: 3,448
- Population density: 8.98 individuals per acre
- Total acreage: 384 acres
- Housing density: 2.79 units per acre
- Minority population: 36%
- Median home value: $129,340
- Vacant development potential:
49 acres (12.7% of total acreage)
A neighborhood-by-neighborhood review of housing demand and land availability is recommended, in conjunction with the current effort to craft Neighborhood Plans for each neighborhood related to placemaking and community engagement. It is recommended that each neighborhood then set a specific goal for the number of housing units added over the next decade. Given the scope of intense housing need in the City of Boise and the fact that the housing issue is felt in each neighborhood, it is incumbent on every neighborhood to support the preservation and development of housing in its own backyard.
Housing crises are not felt equally by all populations, and some populations bear the brunt of this crisis more than others. There are several populations that should be considered specialized populations and warrant focused goals and actions by the city:
- Minority populations
- Refugee communities
- Households experiencing homelessness
Neighborhoods with a >20% Minority Population
A key question emerged during the analysis: is there a noticeable variance in housing characteristics in neighborhoods that have a larger population of minority demographics? The data below points to key differences in neighborhoods with a larger minority population, including lower-median home values, lower rates of owner-occupied units, lower-median household income, and a slightly smaller household size.
The findings in this comparison are shown below:
- Average median home value: $214,644 compared to $277,980 citywide
- Owner occupied: 40% compared to 60% citywide
- Median household income: $42,031 compared to $64,094 citywide
- Average household size: 2.11 compared to 2.28 citywide
Student Housing Demand
Students living in Boise are a special population that have unique housing needs. Boise State University is increasing its planning for student (and faculty and staff) housing needs and integration with the campus’ surrounding neighborhoods.
Key findings for the Boise State population are below:
- In 2018, Boise State enrolled ~3,000 more students than in the preceding years. This created a housing shortage with an unserved waitlist of over 385 students in 2019.
- Recent studies show sufficient demand for a 500-bed housing project.
- The University is short approximately 500 traditional beds and 1,000 apartment beds.
- Phase 2 of the University’s housing analysis will provide more information.
- Housing needs of other institutions including College of Western Idaho, University of Idaho, and other trade schools should be considered.
Boise’s welcoming spirit is a core value of its community and has led to international recognition and appreciation as a resettlement location for refugees coming into the United States. This is visible in the accreditation by the Welcoming American in 2019 certifying the City of Boise as a “Welcoming Community.” The number of refugees resettled in Boise is determined in relation to the national cap – the United States resettlement cap was raised to 62,500 in 2021.
The cap increase is likely to drastically increase Boise’s resettlement in the coming years. For instance, the state of Idaho saw roughly 330 refugees resettled in FY20. It is projected, based on national estimates and local interviews, 1,400 refugees will be resettled in Idaho in FY21. For housing considerations, this translates to an increased housing demand of 1,000 units per year, in addition to the housing need identified in this analysis.
Neighbors United, the Treasure Valley partnership serving our refugee communities, convened a housing taskforce beginning in May 2021 to address this issue.
This plan recognizes the specific housing considerations for people experiencing homelessness:
- Supportive services: It is imperative to connect permanent housing with trauma-informed services to maintain stable housing.
- Affordable units: A very large majority of households experiencing homelessness are earning <30% AMI. Therefore, accessible, affordable housing is critical for these households to retain housing.
- Transit corridors: It is conducive to build housing along public transit routes to enhance accessibility to medical care, childcare, schools, employment, and more.
Each of these considerations will positively impact the lives of those experiencing homelessness and create opportunity for these individuals and families to climb out of poverty. In 2021, the City of Boise, as the lead agency of Our Path Home, commissioned a national expert, the Corporation for Supportive Housing, to conduct a supportive housing needs analysis and action plan.
The current climate of the housing market in Boise, developed from a significant increase in demand for housing compounded with recent construction of units unable to meet this demand, has triggered a need to develop strategy to ensure there is sufficient and affordable housing in the area. This is illuminated in the construction constraints for affordable housing due to building costs, as well as the lack of available land and the need for denser development. This strategy must include considerations for specialized populations to ensure that there are sufficient units being considered, as well as affordable options to prevent further hardship on these populations. To stay relevant to ongoing conditions, this report should be updated annually.
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