Where will the workers live?

The nation’s appetite for housing is at an all-time high, with an annual population growth of more than 3 million people driving demand for more than 2 million homes every year.

Combine that with baby boomers and retirees discovering the Inland Northwest as a great place to move or purchase a vacation home, and the housing market here shows no sign of slowing, said John McIlwain, a senior resident fellow with the Urban Land Institute. McIlwain was the keynote speaker at a housing forum held Thursday at North Idaho College in Coeur d’Alene.

But embedded in the momentum of North Idaho’s hot housing market, he said, is a danger of pricing out the people who make up the backbone of the community. Teachers, police officers, firefighters and service industry workers increasingly struggle to afford homes as prices rise faster than wages, he said. Complicating matters is the quickly rising cost of materials to build a house, driven by demand in China and reconstruction of the Gulf Coast.

“How do we provide housing for everyone here?” he asked. “Everybody’s not going to be able to afford $4 million condos, but everybody has a right to a decent home in a decent environment.”

For the bottom 60 percent of wage earners in this country, he said, wages have not risen for the past 15 years. And in the last four years, in dollars adjusted for inflation, they’ve fallen, he said. Assuming that’s not going to change soon, communities like Coeur d’Alene have a responsibility to plan for a future that ensures people at every income level can afford a decent home.

And that responsibility has been left to the local communities, he said. The federal government is financially tapped and “uninterested in housing” and as a result has cut programs that subsidize low-income or affordable housing, he said.

“The federal government has walked away from the issue of housing,” McIlwain said.

That means builders and architects and landowners need to re-think how they house the population. Some positive trends will help them make that shift. Younger people are more interested in where they live than in the size of the house, he said. In Las Vegas, a major homebuilder began increasing the density of housing developments and making the units smaller, trying to serve more people.

“These things are flying right off the shelf,” McIlwain said. “Because people want housing and they’re prepared to take a well-designed, well-built, smaller house until they make enough money to move up the ladder.”

Over the past 20 years, McIlwain said, the average size of a home had stabilized at about 2,400 square feet, he said, but now it’s starting to drop.

McIlwain also recommended additional taxes or fees placed on development to build up the state’s Housing Trust Fund to help finance more affordable housing. He acknowledged that the community doesn’t want to overtax development, but said there must be a balance.

“You don’t want to kill your market,” he said. But, “you don’t want to create a situation in which the people who provide all the services who keep this economy going, who keep the city safe and healthy aren’t allowed to live in the city because they can’t afford the housing.”