More than 200 apartments are under construction in Kootenai County at a time when market watchers say vacancy rates are the highest in years.
The answer: Nearly half of those units will be priced for low-income families, a need so profound more than 500 people have signed a waiting list.
Meanwhile, low interest rates, falling construction costs and sagging lumber prices are convincing some developers that now is the time to build.
“There’s a lot of market growth going on right now,” said Jim Magnuson, an attorney and developer. “It’s not like a few years ago when we were in Fat City, but there’s lots of breadth, lots of selection.”
Kootenai County seems to be returning to a renter-friendly market, with enough vacancies in residential property to give renters choices. Rental rates are stabilizing, but at slightly lower prices than a year ago.
Vacancy rates, which hovered below 2 percent during the early 1990s, now are running between 6 percent and 8 percent. Most markets are considered stable with a vacancy rate of about 10 percent.
“Rents have come down over the past few years, but they didn’t bottom out,” said Nancy Belnap, with Rental Property Management.
Typical three-bedroom, two-bath suburban-style homes rent for $650 to $900 a month, she said. Two-bedroom duplexes are running $425 to $550.
The new complexes, built with some federal or state-assisted financing, will run even lower.
Thursday, real estate appraiser Don Anderson broke ground on 72 one- and two-bedroom apartments along Emma Avenue, where rents will range from $162 to $436 a month. Entry into those apartments will be based on income.
“That’s been a problem here for as long as I’ve been in this business,” Belnap said. “It’s going to be a great addition.”
Magnuson, meanwhile, is building 150 two- and three-bedroom apartments along Kathleen and Ramsey Roads, 20 percent of which will be targeted toward low-income renters.
While some people clamor that North Idaho is overbuilt, rental experts say that’s hardly the case. In fact, the rental market actually has returned to where it should be, said Andy Golmicz, with Resort Property Management.
“People have forgotten what’s normal,” he said. “It’s normal to have a 20-unit complex and have one or two units empty all the time.”
The market appears to be soft only for two-bedroom apartments, he said.
“I’m seeing some of those standing empty three, four and five months,” he said.
Even that’s not enough to scare Magnuson.
Renters seem to prefer new developments to old and Kootenai County continues to grow. “We’re in this for the long-term,” he said.