Sunny Grant, an employee of the county and a resident of Hailey, knew she'd never be able to get a house through the Blaine County Housing Authority. Despite the urgings of co-workers and friends, Grant said she wanted more space than the authority would assign her.
"They want to fill bedrooms," she said. "I wanted a backyard for my dogs and I wanted to live alone in a three-bedroom house. They're not in the business of providing bedrooms that will be empty."
When she went hunting for rentals earlier this year, she found she would be paying roughly $1,000 a month for the kind of home she needed. She'd rented in the valley since she arrived in 1984, and had no desire to buy a house, she said.
"I'm 63 years old," Grant said. "I have no children. I have no need for an investment. All I care about is the best place for me and my dogs to live."
That place turned out to be a small three-bedroom home in North Woodside, a foreclosure that had been vacated early last year.
Grant bought the $135,000 home with the help of Bank of America mortgage broker Teena Hill. Hill told her that through a deal with lender Fannie Mae and a Rural Development Loan, Grant could actually buy the home with no down payment and no closing costs (a deal which has since expired).
Now, instead of paying a $1,000 rent, Grant is making monthly mortgage payments of $800.
Grant met Hill through an authority workshop, and credits the authority and program director Nancy Smith with making home ownership possible for her. However, she admits that she could not have owned a house through that agency.
"I realized that, in fact, the Housing Authority was not going to be what I needed," she said.
Grant's experience—and the sliding price of houses throughout the valley—raises the question: How relevant is the affordable housing movement in today's economy?
Lila Wagner, a senior loan officer for Mortgage Associates in Ketchum, said the economic downturn has resulted in the best buyer's real estate market in years.
"Rates have never been lower," Wagner said. "Prices in many areas are now low enough that it makes more sense to purchase rather than rent."
Bank of America no longer processes the Rural Development loan that helped Grant, but Wagner still processes 100 percent, 30-year fixed Rural Development loans based on income restrictions, as do other lending institutions.
Such loans have been criticized in the past for allowing unqualified buyers to buy homes with no money down, only to go into foreclosure several years later if the owners' financial circumstances drop further.
But Wagner said the loans are an "important factor" in allowing interested buyers to buy homes, which in turn will help the market.
"There is definitely more interest now," she said. "If you are a qualified buyer, that dream home you couldn't afford a few years ago now might be in reach."
For example, in 2004, a "charming log home" with Baldy views in Ketchum was listed in the September Idaho Mountain Express Real Estate Guide at $895,000—this, for a home described as having "great remodel possibilities."
A similar property in the September 2011 guide, described as an "affordable home," is listed for less—$659,000—but that price may be more than many Blaine County residents would consider affordable, as incomes are still down nationwide. In Blaine County, adjusted per-capita income fell from $41,238 to $31,626 between 2000 and 2010, or 23 percent.
Michelle Griffith, executive director of the ARCH Community Housing Trust, contended that falling housing prices mean little to residents whose incomes are also falling due to the faltering economy.
"That doesn't make homes more affordable for our community," she said. "It just makes them less unaffordable."
Even foreclosures may not be affordable enough. David Patrie, executive administrator for the Blaine County Housing Authority, said the majority of foreclosures have to be paid for in cash.
"What people don't realize is that you can't buy auctioned [foreclosures] with a loan," Patrie said. "If you don't have cash, you're not going to buy it, and the people we deal with can't come up with that."
Griffith pointed out that many foreclosures are in need of repairs, and the process can be long and complicated. It took ARCH a year and a half to buy a foreclosed home on Sabala Street in West Ketchum, despite having the cash on hand and the ability to pour more than $70,000 of renovations into the building.
"That is really not an easy process or even a realistic one," she said. "You have to be prepared to go in and do pretty major rehabilitation. It would have been completely unaffordable [for a family]."
Developers of new housing projects in the county have been required to provide a certain percentage of the total units as affordable housing since the county commissioners passed a community housing ordinance in 2009.
George Kirk, owner and developer for The Kirk Group in Ketchum, said he supports the concept of creating more affordable housing.
"Having housing that is affordable for people working here is a precursor to economic development," he said, adding that he provided affordable housing as required during the "building boom" last decade.
But with the economic downturn, Kirk said, it's become almost impossible for developers to be financially solvent under the ordinance, as they must not only pay for the land for affordable housing, but build the units as well—the return on which is minimized because of income-based selling-price restrictions.
Kirk said as a result of these requirements, his housing projects have been stifled.
"It serves as an impediment to have anything developed," Kirk said. "[These ordinances] have imposed community housing as a cost to the development community. If you want to develop something, there's essentially an affordable-housing tax."
Last year, Kirk petitioned the county to allow him to donate nearly two acres of land from his Quail Creek development south of Ketchum to the ARCH Community Housing Trust, in place of building 19 affordable housing units on his own. The plan was to allow ARCH—which had the resources and funding—to develop community housing on that land sooner than Kirk could.
Kirk's request was rejected, a result of what he calls "counterproductive" policies.
Instead, he supports the Ketchum CDC's business model, under which it coordinates housing projects on city-owned land. Costs are minimized because the developer doesn't have to purchase the land, he said.
Affordable housing still appears to be in demand, despite falling housing prices. Griffith said affordable housing prices have been falling along with the markets, which can help pique interest in affordable homeownership.
"The affordable housing market mirrors the general real estate market," she said. "People who were not interested before because they had no hope are now interested. There are silver linings."
Jon Duval, executive director of the Ketchum Community Development Corp., said the demand continues to be strong for the recently completed Northwood Place rental complex. It took two months for the complex to fill up, but the buildings have remained full ever since, with nine units turning over by the end of the year.
Though the average rents for the units are comparable to or even more than similarly sized market-rate condos due to excess supply in the market, Duval said he hasn't had trouble filling the units that have opened up. CDC board member Dale Bates said tenants are willing to pay a little more for Northwood Place units because it's a new, energy-efficient building, resulting in less expensive utilities.
Bates argued that the fallen housing market and lackluster economy has driven down costs, allowing the CDC to push these projects with an eye toward future demand.
"This is the best time for the market to build up affordable housing, while costs are low," he said.
Katherine Wutz: firstname.lastname@example.org
Next week: The future of affordable housing.