PowerPoint Presentation

Blaine County’s housing shortage is getting worse, and it continues to limit economic growth, SVED Executive Director Harry Griffith said. If construction were to stop today, there’d be no homes for sale under $450,000 in any market in roughly four months’ time, according to an availability assessment by the Sun Valley Board of Realtors. Hailey would be out in around two. Six months is considered healthy.

Sun Valley Economic Development’s newest report on Blaine County’s vital stats paints a mixed picture for the region—and one split down class lines.

“We have two types of residents,” SVED Outreach Director David Patrie said at the group’s third-quarter member forum on Thursday, Sept. 5. “We have those who derive income from outside the county—they could be trust-funders, or they could work remotely for Google. Our economy works pretty well for those folks. Then, we’ve got people who depend on Blaine County to make a living. It’s not working as well for them.”

But as the affordable housing crunch continues to check population growth—and with it shrink the labor pool that fuels Blaine County’s service economy—pain at the bottom may soon spread to the top, especially as locals age out of the workforce.

The common narrative—that loosening the housing market will take care of the rest—may be too simplistic, according to Patrie.

“We’ve got to walk and chew gum at the same time,” he said. “We’ve got to work on the housing issue. We’ve got to work on the talent-attraction issue. We’ve got get the right people here, and the right companies here. None of it’s the cart, and none of it’s the horse—we’ve got to do it all.”

The big picture

From the top of Baldy, Blaine County’s economy looks fine. SVED’s gross domestic product estimate—a value summing reported sales, wages, self-employment income and the hypothetical rental value of all real estate—topped $2.1 billion in 2018, charting a three-year trend of 2.2 percent annual growth. Sales, derived from tax filings by local businesses, grew more than 3 percent to $890 million. Reported wages rose 1 percent. And, while the real estate share dipped slightly, it remains a strong seller’s market. With 715 transactions in 2018, activity is up 10 percent year over year, while sales volume approached $530 million, an 8 percent bump. The median price of a single-family home, townhouse or condo jumped 25 percent in the two years since 2016, reaching $440,000—the highest since the Great Recession a decade prior, though well off those inflated peaks.

But that growth is putting pressure on businesses and their employees alike.

Harry Griffith, SVED’s executive director, put it like this: “If you’re a homeowner, you should be happy. If you’re a purchaser, you should be concerned.”

Though the median price sits at the high end of what SVED considers affordable for “middle income” earners, the distribution is tight, according to Sun Valley Board of Realtors Government Affairs Director Bob Crosby. He’s seeing a lot of a lot of money flowing into the area—and very few homes available below $350,000.

“Really, it’s a worse story,” Crosby said. “It’s a real stretch for people.”

Juiced by outside money, home prices rose much faster than local wealth. The strain is showing in the labor market. Companies can’t find workers at wages they can pay, and workers can’t find a place to live—let alone one they can afford.

“People are picking up extra shifts, overtime shifts, or just closing their doors,” Griffith said. “From what I’m hearing, this is the most difficult year for talent attraction ever. It’s a real issue for us—and it’s not going away.”

Going south

That story, though clean, may be a little too simple. Other indicators suggest new currents ahead.

SVED’s figures trail by a year, so last week’s presentation focused on numbers from the third quarter of 2018, compared to 12 months prior. During that time, Blaine County actually lost jobs—2 percent year over year, leaving 12,326 jobs—part-time and full-time—filing a W2 with the IRS. That’s 11 percent off the pre-recessionary high-water mark of 13,694 in 2007.

Ketchum is still the largest employment hub in the valley, but it lost around 5 percent of those positions between 2017 and 2018, dropping more than 250 total. That’s a reversal for the city, which had been adding jobs since 2014. Reported sales, as calculated by the State Tax Commission, are also down, dropping 3 percent to $379 million.

Patrie said there are likely a number of factors playing into Ketchum’s slump, but SVED members pointed to a big one.

“You talk to a place as simple as the barbershop, and they say business is down, because people are moving down valley,” said Jeff Nelson, branch manager at Finance for America Mortgage and an SVED member.

The stats bear that out. Hailey has picked up the slack in sales. It saw a 12 percent bump in reported sales year over year, topping $290 million. It added a few jobs—21, to be exact—but not enough to cover Ketchum’s slip. Despite that, the total gross wages earned through those jobs actually fell in Hailey, from $218 million to $216 million, putting it around parity with Ketchum’s figure.

“We’ve seen, based on sales, more activity in the south,” Griffith said. “But you’ve got more jobs in Hailey, and flat wages—so you’ve got people getting paid less.”

Missing pieces

SVED is short a key component of the jobs data: the number of “self-employed” independent contractors—and the amount of earnings they report via 1099 tax forms. Those include most part-time and seasonal work. From 2010 to 2016, those “firms” grew at a 3.3 percent yearly rate, but the U.S. Bureau of Economic Analysis doesn’t have any data for the past two years, Griffith said. Over that time, wages from self-employment grew at 3 percent per year, roughly keeping up with the number of employees entering that labor market.

Those jobs are tricky to count. One individual can hold several, and each one can count as a separate “firm” to the federal government. Around 15 percent of Blaine County jobs fall into this category, according to SVED’s analysis. That’s more than double the state and national average—as well as more than the percentage found in other mountain resort counties.

Those gigs can pay really well—especially if someone holds down several, Griffith said. But they typically don’t come with benefits like health insurance, offer less regular work and provide fewer traditional avenues for upward mobility. Patrie said that SVED needs to put those jobs under a microscope to see if there is a connection between their prevalence and other troubling indicators, like the percentage of people without insurance, and the poverty rate.

“It is very possible there is a linkage there,” he said.

(For his part, Griffith doesn’t see one.)

Either way, those metrics are problematic.

About 16 percent of people in Blaine County are uninsured—higher than the state and national averages, and the counties around Aspen, Jackson Hole, Park City and Steamboat, Colo. (Summit County in Colorado’s Front Range tops Blaine—more than one in five people there are uninsured.)

Poverty, too, is much more pervasive in Blaine County than its peers, SVED reports. Despite some recent headway, between 12 and 13 percent of households here still live in poverty—above the state and national averages, and more than double the rate of those other resort towns.

A major piece of that is the tourist cycle. Businesses rely on a few weeks to make a year’s worth of money, Patrie said. Huge chunks of the economy slam to a halt in between. Workers—and their wages—stop with it.

“We’re too seasonal,” he said. “And it’s hard on everybody.”

Email the writer: mdee@mtexpress.com

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