Nothing from nothing leaves nothing
Commentary by WES NASH
At the last Ketchum City Council meeting, several people spoke against
allowing additional square footage for "community housing" in the Commercial
Core. I admit that prior to this meeting I was apathetic. How many employees would
purchase a housing unit that involves government intervention, at a cost that is out of
reach for all but a very few, combined with a deed restriction on the largest investment
of their life? Little wonder the city of Ketchum is looking for its third housing
commissioner. The city may require the services of a housing commissioner, but unless you
convince the property owners to build, you do not need a calculator to prove that any
number times zero is still zero. That pretty much sums up where we are today regarding
"affordable housing". But there is hope. Let’s investigate a new option.
First, allow business owners or corporations to purchase the employee
housing units with the same deed restrictions as currently imposed. Remove the financial
cap and real-estate holding requirements that now exist.
Second, remove the current qualifications for residency and allow new
employees the option of renting the housing unit.
Third, allow a 1.75 floor area ratio for employee housing as well as a
density transfer on unused square footage.
The first requirement was to remove the financial cap. This is a key point
and the solution for a number of reasons. It allows all business owners to participate,
which opens up a much larger market. The added financial strength of a business’s
owning the property and the opportunity for a possible pre-sale will eliminate the high
risk and thereby assist the developer with obtaining financing.
The business will be able to offset the new investment with the anchoring
of its best asset--a valued employee. The economic offset for the business owner will come
in the form of a reduction in wage in exchange for housing. That reduction will be
compounded by other reduced labor costs such as work comp, unemployment and liability
insurance, federal and state taxes etc. As housing prices escalate, the resale of the
property, even though it’s deed restricted, will appeal to an increasingly large
market, and may well have to be sold in a lottery.
The second requirement allows renting to any qualified employee,
disregarding the time of residency. The focus here is to satisfy the goal of housing those
who need it most.
The third requirement allows an increase in floor area as an incentive for
the property owner. The additional square footage will offset the loss for developing the
employee housing unit. The density transfer portion opens up a free-market move to sell or
trade square footage, while still providing the stated goal of providing employee housing.
The extent of the transfer should not exceed the 1.75 floor area ratio and must also meet
the new design standards with respect to open space and setbacks.
Without the cooperation of the property owners, no relief to the
employee-housing problem will be realized. High risk is a motivation killer. With the
ability of the business community to provide letters of commitment prior to construction,
the risk is removed, thus providing the motivation to build.
In conclusion, any business owner who believes in the viability of future
earnings within the Sun Valley area must also recognize that he or she will require new
qualified employees. If you believe that present affordable housing requirements do not
solve the employee housing needs, take a position and discuss your ideas with the Ketchum
City Council. A change of policy will be required and hopefully we can all achieve our
ultimate goal of providing a strong service sector in the years to come. Any employer that
intends to stay in business or sell the business at some future time may well be wise to
put aside his apathy and consider the benefits now, before it truly becomes unaffordable
even for you.
Wes Nash is the owner of Nash Construction in Ketchum.
