A shortage of affordable housing in Spokane and Kootenai counties has created a worst-case scenario in which property owners’ profits are shrinking and low-income residents can’t find a place to live.
That was the somber assessment of the region’s apartment market given by two experts at the annual Real Estate Market Forum at the Spokane Opera House.
“What we’re seeing is a housing crisis in low-end rentals, especially for the special concerns of children, parking garages, pets, etc.,” said Ed Morse of Morse & Co. Appraisers in Coeur d’Alene.
Morse was one of 13 panelists at the forum. Local agents discussed trends in retail, industrial and residential real estate in the Inland Northwest.
In Kootenai County, 38 percent of families qualify for federal housing aid, but only 13 percent of the county’s housing stock is considered affordable, multifamily rental dwellings.
And, although apartment rents appear to have peaked, renters may have to compete for available housing because the Panhandle’s population is rising faster than infrastructure development. Coeur d’Alene, Post Falls, Hayden Lake and Rathdrum are the only cities in North Idaho with sewer systems that can support large apartment complexes, Morse said.
The Spokane rental market is not as tight as North Idaho’s. But in spite of an exceptionally strong year in 1994, developers say they see problems on the horizon.
“We’ve entered an era where it’s not as easy to develop and certainly less attractive to buy,” said Fritz Wolff of Alvin J. Wolff Realtors Inc.
Wolff said rising expenses and yearly turnover as high as 80 percent put a strain on apartment owners’ profits.
When a resident’s lease ends, the owner may spend as much as $1,000 to clean the unit, advertise the va cancy and show the apartment to prospective renters. Rising interest rates and changing demographics are likely to increase the demand for rentals in Spokane and Kootenai counties.
As interest rates increase, more families will rent rather than buy. And as working Americans become more transient, people will rent for shorter terms.
“Home ownership may decline,” Wolff said. “Apartments will be more single-family-like: nicer, larger.”
Despite the strain in the rental market, analysts said the overall real estate outlook is bright.
“We keep setting new records,” said Chris Gibbs of Coeur d’Alenebased Acuff Northwest Inc., referring to the region’s five-year-old housing boom.
“When we think we can’t do that again, we go even higher.”
Despite mild anxiety over Micron’s decision to cross off Post Falls from its list of cities for a new expansion, analysts also predicted continued growth in commercial and industrial real estate for 1995.
“Spokane will still be in the limelight for the relocation of corporate America to small town, U.S.A.,” said Jeff Johnson of Spokane-based Jeff K. Johnson Co.