Board wary of ditching float-home rent policy

BOISE – If the state strictly limits the number of float-home moorings on state-owned lakes, is that a free market?

State Land Board members indicated Tuesday that it’s not – and questioned a recommendation from the state lands staff to repeal the board’s reasonable-rent policy for float-home tie-ups and throw the issue open to market forces.

“This is a very small marketplace,” noted Attorney General Lawrence Wasden. Idaho forbids the permitting of any new float-home sites on Coeur d’Alene and Pend Oreille lakes, and there are only about 100 sites now on each of the two state-owned lakes.

Rather than adopt the staff’s recommendation, the Land Board voted unanimously to form a subcommittee to research the issue. Three of the four members at the meeting – Gov. Butch Otter, state Controller Donna Jones and state schools Superintendent Tom Luna – were participating in their first Land Board meeting.

“That would at least give me more time to learn more about this,” Luna said.

Rep. Jim Clark, R-Hayden Lake, welcomed the Land Board’s decision. “It’s not the free market there – I think special considerations have to be given to at least the owners that are there now,” Clark said. He said he and other area lawmakers have been meeting with float-home owners and hoped “to stop the Land Board from doing something stupid.”

Float-home owners on Lake Pend Oreille have been particularly concerned since a new owner bought up two Bayview marinas and sharply increased rents. “The biggest issue is that float homes cannot readily move,” Jamie Berube, secretary of the Floating Homes Association of North Idaho, told the Land Board. “We believe that the free market doesn’t exist.”

Berube told the state’s top elected officials that float home owners aren’t opposed to marina owners making a profit, and traditional rent increases of 3 percent to 5 percent a year have allowed that in the past. But recent sharp increases and threats to turn the moorages into “dock-o-miniums,” where owners would have to purchase their moorage rights from marina owners, have float-home owners worried.

Chan Karupiah, who has owned two Bayview marinas since 1993, told the Land Board he favored the free-market approach. “When I came in, I did double my rent to make my numbers work,” he said. “Over time, my rent normalized. … Ideally the free market should establish the rent so that the rent keeps up with the investment as it appreciates.”

He added, “We as an industry need to maintain a business and an investment.”

State lands official Mike Murphy told Land Board members that the issue may be bigger than just float homes. “This issue really is coming to the forefront for all of our commercial marinas, all of our waterfront properties,” he said.

Marina owners who have had the operations for years are retiring, he said, and rising values for lakefront properties are increasing pressure to raise rents for all types of uses.

Murphy said the Land Board staff analyzed rents for homes and mobile home spaces in Sandpoint and found that current float-home rents were “within a reasonable bracket of that.”

But Berube said float-home slips aren’t comparable to Sandpoint real estate. “All we do is use the docks for access and to tie to,” she said.

She welcomed the Land Board’s decision Tuesday. “I’m so glad they tabled this for future research,” she said. “They developed this policy for a reason.”

The Land Board has had an official policy since 1999 that rents charged to float-home owners must be “reasonable.” But its staff reported that only one of four current leases with marina operators includes that clause about reasonable rents.

Otter noted that the state could amend those leases.

Luna said, “To me, the testimony on both sides was compelling, and I’d like to learn more.”