Lake residents fight rent hike

BOISE – Priest Lake’s state-owned lakefront soon could become a very different place, cabin owners warned state lands officials Wednesday. Rent increases on state-owned cabin sites will prompt rustic cabins amid the pines to be replaced by huge, pricey homes, the owners said.

“State cottage sites are especially good candidates for large cabins, because there are relatively few development restrictions,” cabin owner Denny Christenson, a Spokane architect, told a packed hearing in Boise. “If we continue along this path, we will see huge homes lined up along the shoreline like elephants at a watering hole.”

A hundred people crowded into a state meeting room to protest cabin-site lease increases at Priest and Payette lakes Wednesday, and two state Land Board members, Secretary of State Ben Ysursa and state Superintendent of Schools Tom Luna, listened closely through more than four hours of testimony.

“We kind of expected the crowd, but not this large,” Ysursa said as the meeting opened with people standing in the doorways, some sitting on floors and tables, and every seat taken. “We appreciate your input and we appreciate the crowd coming here today. We’re here to listen.”

The cabin sites in question are state-owned land that’s rented to people who build and maintain cabins on them. The leaseholders, some of whom have had their family cabins for generations, pay the state rental fees based on a percentage of the market value of the lot each year. The money – about $4 million last year – goes mainly to fund schools, along with universities and some other state institutions.

“How these endowments are managed and the benefit they provide for our schools is just enormous,” Luna told the crowd. The state constitution requires the endowment lands to be managed for “maximum long-term financial return.”

State law, however, directs that when it comes to cabin sites, the state should achieve that through “stable leases at market rent.” That differs from other state endowment land leases, most of which go up for public auction every 10 years when leases expire.

In addition to their lease fees, the cabin owners also pay separate property taxes to the local county. All the state’s leases are up in 2010, on both lakes, and with recent huge jumps in land value, many leaseholders are worried they’ll no longer be able to afford to keep their longtime family cabins.

Christenson said U.S. Forest Service cabin sites on Priest Lake have more development restrictions than state lots, limiting cabins to two floors and a maximum of 1,200 square feet per floor. But he said his state lot, with 100 feet of lake frontage, could be developed with a 12,000-square-foot, three-story cabin. “Allowable cabin area is over five times the size of a federal lease,” he said.

The state lots have other restrictions, however, including prohibitions on turning them into vacation rentals.

Bud Belles, of Nine Mile Falls, president of the Priest Lake State Lessees Association, said the average state leaseholder on that lake has been there for more than 30 years. A large majority, he said, are “middle income folks.”

“It seems like every seven years we go through a discussion like this,” Belles said. “What we do object to are the huge jumps and the inconsistent policy.”

Soaring lakefront land values have pushed lease rates up, with Payette Lake lots seeing even more dramatic increases than those on Priest Lake.

“I think we all know why we’re here,” Payette Lake Cabin Owners Association President Jim Young told the crowd, showing a graph of lease rates for cabin sites there from 2000 to 2008. The line rose sharply, like one side of a volcanic cone.

Young said he’s facing a $50,000 rental rate for 2008 for his family’s Payette Lake lot. So the family decided to sell – but no one wanted to buy. “The instability has killed the market for leased property at Payette Lakes – it’s killed it,” Young said. “I don’t think there is a market.”

Mike Fery, who has a cottage site at Pilgrim Cove on Payette Lake, said, “My cottage site rent has increased an average of 27 percent per year since 2001. In 2001, it was $5,000. In 2008, it will be $32,500. … It’s not affordable, not attainable by 99 percent of Idahoans.”

There are 364 state-owned cabin sites on Priest Lake, all of them lakefront. Payette Lake has 169 lots.

The state tried to auction off two new lakefront lots on Priest Lake recently with leases charging twice the rates charged in current leases – 5 percent of value, instead of the current 2.5 percent – but no one bid.