The Mountain Express editorial board (“Law of supply and demand in workforce housing is a myth,” published Dec. 11) believes that increasing the supply of housing will not solve the housing shortage. It asserts that price controls must be part of any viable housing solution. Two reasons leap to mind disproving their assertion.
First, let’s assume there is an immediate need for 500 units of workforce housing. Next, imagine that magically there were 1,000 additional market-rate workforce appropriate housing units available. Would not the workforce-housing problem instantly be solved? There would be no need for any sort of price control, since if the owners of any one set of units priced them too high, workers would just buy or rent from another owner that was more motivated to generate a return on the money he invested building the units.
The other reason why price controls are a bad idea is that it discourages developers from developing the units in the first place. Developers are constantly tasked with balancing the risk of undertaking a project against the hope for a reward. The lack of supply of workforce housing in Hailey illuminates the reality that the risks outweigh the rewards. A developer wanting to develop workforce housing faces risks in the form of a lengthy and expensive entitlement process, uncertainty due to subjective Planning and Zoning criteria that invite lawsuits by disgruntled NIMBYs as well as financial risk regarding ballooning land and construction costs. Furthermore, what developer would pursue a development that involved annexation in light of the way Quigley and Old Cutters were treated by the city of Hailey?
I agree with the Mountain Express that there is a housing shortage. I commend the city for taking some steps to improve the situation. However, the threat of price controls would add yet another layer of risk to an already unattractive development landscape for workforce housing, and thus exacerbate the problem.
John Campbell, Hailey
(Editor’s note: Mr. Campbell was the developer of Old Cutters subdivision.)