Across all jurisdictions, new market-rate residential development generates the need for more locally affordable housing than it creates.
The 2024 Nexus Study of New Commercial and Residential Development, Employee Generation, and Demand for Community Housing (“Nexus Study”) quantifies the impact of new development on employee generation and the demand for community housing in the rural resort community of Blaine County, Idaho.
The Nexus Study found that all new market-rate development– including apartments, condominiums, townhouses and single family homes– exacerbate the demand for community housing. Rather than meeting the housing needs of local workers, new market-rate homes are unaffordable to people earning local wages and generate the need for more employees than they house.
Nexus Studies are especially useful to resort or gateway communities that typically experience economic disparities and "affordability gaps" in housing-- a gap between the local cost of housing and the purchasing power of local households.
How is the Nexus Study connected to conservation?
Land use decisions and zoning regulations– which can incentivize developers to meet the community’s needs– affect patterns of growth. Development that sprawls into our open spaces compromises precious habitats and uses natural resources inefficiently. Data points, like the Nexus Study, provide planners with the data needed to justify and shape zoning regulations that encourage smart growth.
One category of zoning regulations-- otherwise referred to as a "zoning tool"-- that supports smart growth is "community housing incentives." For example, the City of Ketchum offers developers a density bonus incentive, whereby the jurisdiction sets a base allowed density. If property owners or developers want to exceed that base density—up to the incentive density– they can if they include a proportion of community housing or pay an in-lieu fee.
Community housing incentives can be used for a range of densities and types of development-- e.g. allowing Accessory Dwelling Units on single-family homes-- and is the most inexpensive and affordable way for local governments to provide community housing units. The Nexus Study findings can be used to inform and calibrate such zoning tools-- so that new developments offset the demand that they generate for community housing.
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The Affordability Gap in Blaine County
In 2023, the median home price in Blaine County was $1 million, which is affordable only to buyers earning approximately 300 percent of the area median income or more than $238,000 annually (see Table 1). From 2019 to 2023, the median home price in Blaine County grew by 111 percent while the average wage only increased by 33 percent. This discrepancy marks the “affordability gap” in Blaine County: a gap between the cost of housing in Blaine County and the purchasing power of local households.