Builders Fear Growth-Management Practices Will Boost Housing Prices

Urban growth boundaries designed to curb residential sprawl and conserve infrastructure in metropolitan Spokane are due to be set this fall.

Some builders who picked up and moved to Spokane after Seattle established growth boundaries a few years ago report lot prices doubled within 90 days.

Real estate and housing industry leaders worry the same could happen here if the lines are “drawn too tight,” cautions Al Haslebacher.

The executive officer of the Spokane Homebuilders Association says “typical” lot prices today in Spokane run about $30,000.

He calculates that’s about par with Portland, where prices have shot up 100 percent in the past two years. Some contend Portland no longer has a viable entry-level market because land prices make it almost impossible to build a house for under $150,000, reports Marple’s Business Newsletter.

Seattle is experiencing a similar housing bind.

What makes this particularly worrisome to builders and others in the Spokane housing industry, says Haslebacher, is recognition that “we are a number of years behind Seattle and Portland. In other words, the real impact of implementing growth-management practices and the subsequent big run-up of prices is yet to come.”

Is an escalating affordability crisis inevitable?

In Portland, Marples says, “bankers and economists … wonder whether companies like Intel and Fujitsu will continue to favor the Portland area for expansion given recent sharp increases in housing prices.”

In Spokane, Haslebacher warns, “if urban growth boundaries are drawn too tight, it’s going to price low and moderate buyers right out of the market.”

‘95 was an economic disappointment

All the data aren’t in yet, but a computerized forecasting model appears to confirm what most people already have sensed - the Spokane economy was a disappointment last year.

Economists at Washington State University, who produce a quarterly forecast for Spokane, had predicted explosive employment growth of 5.2 percent. Now it looks like jobs grew more like 2.3 percent.

“After adjusting for inflation, taxable retail sales from retailing activities declined in 1995,” the report said. It didn’t say how much.

“Fortunately,” said the report, which is underwritten by the Spokane Area Economic Development Council and Momentum, “our forecasting model suggests improvements in wage income, employment and taxable retail sales in 1996 over 1995.”

Unfortunately, “projected growth in taxable retail sales appears to be fairly modest for 1996 but then weakens in 1997.”

Employment is projected to grow 4 percent this year but only half of 1 percent next year.

Mom-and-pop store calls it quits

“Retirement Sale” read the ad in last Saturday’s newspaper.

On Sunday, well-wishers swamped Opportunity Furniture, one of the Inland Northwest’s last mom-and-pop furniture stores.

“We’ve had a good rapport with the community,” acknowledged Jerry Mauer, owner with wife, Marilyn. “Some customers have been with this store three generations.”

The business is 50 years old. The Mauers have owned it a quarter of a century.

Opportunity Furniture isn’t caving in to the giant discounters who have entered this market, according to Jerry Mauer.

“After 24 years of daily grind in a family store - working 10 or 12 hours a day and doing it all ourselves, from buying to selling and everything in between - we just got tired,” he said.

Opportunity Furniture, 12014 E. First, was established in 1945 by Gideon Korus and Carl Kappen. The Mauers bought from the founders in 1972. Before that, Jerry worked 23 years for Rosauers Super Markets, starting as a box boy and working his way up to store manager.

“Forty-five years in retail is enough for anybody,” he said.

In the metropolitan Spokane market, he said, Neighborhood Furniture, 2006 N. Ash, is the only other old-line mom-and-pop store that comes to mind, though there very well may be others.

Besides the family furniture store, Marilyn Mauer also operates Gooseberry Country, a crafts and gifts shop which sits out front in a separate, small, red-painted building. It will be taken over by one of the couple’s four grown children, Jenny Gorley.

There is no buyer for the furniture store. In a month or two, the Mauers, who also own the building, simply will close the books on the store and hang out a “For Lease” sign.

, DataTimes MEMO: Associate Editor Frank Bartel writes a notes column each Wednesday. If you have business items of regional interest for future columns, call 459-5467 or fax 459-5482.

The following fields overflowed: CREDIT = Frank Bartel The Spokesman-Review