Nexus Study: New Development, Employee Generation & Demand for Community Housing
- cece8202
- May 6, 2024
- 4 min read
Updated: Apr 3
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.
Still curious? Read about:
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.
Role of Community Housing
Community housing is one solution to the affordability gap in resort communities like Blaine County. Community housing provides residential units legally restricted for full-time, year-round local occupancy, sometimes including income, net worth, and rent or resale restrictions.
Nexus Study Partners
Recognizing this affordability gap in Blaine County, as well as the magnitude and challenges of the existing need for Community Housing, the Blaine County Housing Authority (BCHA) and Wood River Land Trust (WRLT) sought to examine the impact of new market-rate development on the demand for community housing. The Nexus Study was led by the primary project partners: Blaine County Housing Authority and the Wood River Land Trust, funded by the SPUR Community Foundation, executed by consultants at Economic & Planning Systems, Inc. (EPS) and informed by Sun Valley Economic Development, Sun Valley Board of Realtors, and the Planning and Building/Community Development Departments in local government.
Nexus Study Methodology
Methodologically, the Nexus Study calculates how many employees are generated by new commercial and residential development, accounting for different commercial land uses and variability in residential market conditions across Blaine County’s six jurisdictions. The Nexus Study derives employee generation from two factors: the employment patterns of commercial land uses, and the local spending patterns of those who can afford to purchase newly built residences in Blaine County. Analyzing the quantity, occupations and incomes of jobs generated by new development, the Nexus Study calculates the resulting new employee demand for Community Housing. To account for geographic differences in residential market conditions, the residential portion of the Nexus Study considers each of the six jurisdictions within Blaine County separately— the Cities of Bellevue, Carey, Hailey, Ketchum, Sun Valley and unincorporated Blaine County.
The Nexus Study mainly draws on publicly available and trusted data sources, local input to verify local conditions and assumptions, and the nationally recognized Impact Analysis for Planning (IMPLAN) model to derive local spending patterns.
Nexus Study Findings
Perhaps the most critical finding of the Nexus Study analysis is that, across all jurisdictions, new market-rate residential development generates the need for more locally affordable housing than it creates. The study finds that for every 200 new market-rate residential units developed, only 1 of the employee households generated by the development would be able to afford the market-rate priced home in Blaine County. Building new market-rate housing in more affordable parts of Blaine County (e.g. Carey or Bellevue) will not solve Blaine County's existing housing needs. Rather, the new development adds to the existing demand for community housing.
See the full report for the detailed findings on the employee and community housing demand generated by the variety of commercial and residential development in the valley-- see page 6 of the full report PDF for a summary of the findings.
