Friday, August 22, 2008

Businesses can't pay


A popular Wood River Valley myth is that there is no lack of workforce housing, just a severe lack of good paychecks necessary to pay for it.

In other words, if valley businesses fattened paychecks, employees could afford to buy or rent adequate housing and bring their special skills and talents to the community. Opponents of public involvement in workforce housing repeat the claim at least once in every public hearing on the matter.

In other words, valley businesses—and government agencies—are just stingy and want the public to pay for unnecessary handouts to workers and subsidies for valley businesses. If they would only part with more of the pot of gold in their backrooms, housing wouldn't be a problem.

The myth is persistent despite the fact that wages in Blaine County already exceed those paid in the rest of Idaho.

The myth fallaciously relies on a belief that is provably untrue and on a simplistic economic ideology that the law of supply and demand can effectively balance everything in the marketplace.

It also relies on the belief that government intervention is unnecessary to the health of free markets—a belief that national economic reports are destroying daily.

If local businesses could pay employees salaries to keep pace with the price of local condos or homes, they would. But they can't.

Business owner after business owner has testified to this fact, but it has yet to sink into the larger consciousness.

Valley business is local, but competition is global. It comes from businesses in Twin Falls and Boise, with their far lower costs of living, and from Internet businesses that may be located in other countries with poorly paid work forces.

If valley businesses charged prices that covered the cost of living for employees, most would go out of business.

The last time an ordinary local family with a median income could afford a median-priced home or condo in Blaine County was in 1994, according to the Community Housing Support Study. At that time, median condo prices were 257 percent of median income and single-family home prices were 321 percent of median income.

In 2004, those percentages were 446 percent and 583 percent respectively of the $71,200 median family income. Please note that units considered affordable cost 300 percent or less of family income.

The debate over the merits or demerits of government intervention in community workforce housing should be based on facts, not the misleading myth that the lack of workforce housing is a problem that businesses can solve alone.




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