Handling Growth

by Cara Gardner


"It's amazing how many locals ask us why we moved here. Growing up in Minnesota, I realized I needed to live near a mountain; it was always a lifetime goal. We went on ski trips with the idea of buying property and moving to Colorado, Utah or Montana, but when you look to move it's different than when you're on vacation. I had a list [of criteria] and one of the top three things was being near water. I'd ask where the closest water was [when I visited ski towns] and most realtors would laugh and say, 'not around here.' In the fall of '96 or '97, a friend mentioned he bought property in Glacier Park, and he described the northwest corner. The next weekend we drove out and came in through the Clark Fork area; by the time we drove through Hope and into Sandpoint, we were in love."





Telling the story of how he came to live in Sandpoint, Joel Wahlin sounds like thousands of Bonner and Kootenai county residents. He's a recent transplant from another area of the country, drawn to North Idaho because of the low-cost housing and easy access to outdoor recreation. And, like many who've flocked to Sandpoint, Coeur d'Alene, Post Falls, Rathdrum or Hayden, Wahlin isn't looking back.


"It just felt right," he says of his decision to relocate his family to Sandpoint. "I was amazed at how great it was. We bought a little old house and started remodeling it."


Wahlin didn't just contribute to North Idaho's growth by moving his family here. He's also a residential real estate contractor -- and business is booming. The number of homes sold in Bonner County shot up 17 percent in just one year, from 2002 to 2003, according to the Selkirk Association of Realtors and Multiple Listings Service, which tracks real estate market trends. The average sale price of those homes, aided by the increasing value of waterfront property, grew by about


8 percent in the same time period.


"We have the second-highest median home price in the state of Idaho -- second only to the Sun Valley/Ketchum area," says Jeanne Jackson-Heim, executive director of the board of directors for the Selkirk Association of Realtors. "Is it [growing] abnormally fast? Yeah, I think so. Things are increasing dramatically, and low interest rates are a part of that. We are seeing tremendous interest in this area; I'm hearing a lot of folks are coming from large urban areas, trying to get a lifestyle change."


Jackson-Heim is a transplant herself, hailing from Jackson Hole, Wyo. Her former hometown is nestled in a valley surrounded by the mountains of beautiful Teton County, which has a year-round population of around 18,000; during the summer months that swells to about 52,000. Some say North Idaho's cities, like Sandpoint, are on their way to becoming the next Jackson Hole.


"It's really bad down there," Jackson-Heim says, referring to the influx of big money and tourists. "We wanted to get out, and we weren't comfortable with the idea that working people were moving out of the area. We wanted to be with those people."


That's been the part of the appeal of North Idaho for the past decade at least. Retired couples, families and self-employed people who have more choice over where they live have been streaming into Kootenai and Bonner counties, buying inexpensive property and signing up for small-town life. So many have relocated here that Kootenai County was listed as one of the top three fastest-growing counties in the nation in the 2000 U.S. Census; the cities of Coeur d'Alene, Hayden, Post Falls and Rathdrum have all seen dramatic jumps in population since the millennium, and there isn't any sign that the growth will slow down.


"About 60 percent of the people I deal with come from California," says Randy Henley, a real estate agent from Windermere Realty in Coeur d'Alene. "A good example is my aunt; she moved here from San Diego. She was able to sell her home, an 1,800-square-foot rancher for about $400,000 and double her square footage up here for only about $215,000. She's on a fixed income because she's retired now. It's a smart move."


Relocating to North Idaho has proven to be a smart move for many of the transplants, and the local economy is certainly benefiting. But rapid growth brings challenges, and the looming question seems to be: Are the cities of North Idaho poised to become the next Jackson Hole or Aspen?


"I don't think we can compare with some of those areas yet," says Jackson-Heim. "It may be coming... it may very well be that we are at the very beginning of something like that."





Avoiding Aspenization


Such transitions are well-known to a number of newly discovered Western towns. An influx of wealthy newcomers drives up the cost of real estate, but there are no new jobs or increasing wages to match, which leaves native residents in a bad situation. They find themselves priced out of their home town.


Sandpoint appears to be a candidate for Aspenization, while the larger Coeur d'Alene could suffer from some of the symptoms, too. Part of figuring out where rapid growth will take North Idaho depends on whether local wage rates can grow enough to keep up with skyrocketing real estate and how locals will fare as they continue to make the switch from a natural resource-based economy to one more dependent on tourists and retirees. And lurking on the back burner is the issue of whether developers, who are hurrying to keep up with the demands of growth, are protecting the reasons the region was desirable in the first place: its natural resources and livability.


John Beutler, a 26-year veteran of Coeur d'Alene real estate and the top Century 21 agent in the world in 2003, says word is out about the Lake City.


"In 1980, our population was 60,000, and now we're at about 115,000. Most of that has happened in the past 10 years. By 2010, we'll have 150,000 people here."


With people comes demand for housing. "Prices are definitely increasing [for homes]," says Henley, the realtor in Coeur d'Alene. "Last year in Kootenai County, they [went up] a good 10 percent and we're expecting around 20 percent increase this year."


The numbers are astonishing, but much of it is attributed to the increasing cost of waterfront property in both Bonner and Kootenai counties. Despite concerns that locals have a harder time affording real estate, Henley and Beutler both claim that isn't the case. In fact, they say local or not, the majority of people buying homes aren't coming in with millions of dollars and setting up gated communities.


"The thing that's playing heavy in our market is really the $200,000 homes and under," a middle- to upper middle-class range, Beutler says.


Both Henley and Beutler agree that the median home price is proof that North Idaho, especially Coeur d'Alene, isn't on the fast track to being "Aspenized."


"Is [Coeur d'Alene] a retirement community?" Beutler asks. "Yeah. With all the golfing opportunities, and we have the weather. I don't know that we're marketing that, but that's what we're getting."


Henley doesn't agree. He says that while the baby boomer generation has had an impact on the population increase in Kootenai County, many of the transplants are coming here in their prime, hoping for a different kind of life than what major metropolises offer.


"People are wanting out of the big-city rush," Henley says. "They're tired of being taxed, packed in and governed out of California.


"There's a lot of people coming up here to find a job. Apparently they're finding a way to do it," he muses. "A lot of it I think is home-based businesses that people could do anywhere. I don't know that wages around here are changing much. People ask me what [jobs] people have here. I say, 'I don't know.'"


Mark Williams, executive director of the newly formed Sandpoint Economic Development Council, says well-paying jobs are still hard to come by in North Idaho.


"We'd like to have a more of a middle class and bring more jobs," Williams says. "[Sandpoint] is somewhat of a retirement community, but there has also been a surge in people who have made it in technology and decided this was a good spot, or the self-employed. Despite that, 25 percent [of the population] is below the poverty level and we still have a seasonal economy. This isn't affluent, like Aspen."


Poverty, a longstanding problem in rural North Idaho, is part of why people say Bonner and Kootenai Counties won't be Aspenized. There are other reasons North Idaho isn't on its way to Aspen-ization, too, say local leaders.


"If you look at those resort communities, they have limited private land ownership, national forest and no place for people to grow," notes Jackson-Heim.


"Those [places] are really destination resorts," says Beutler, "and I would like to think we have more to offer, and we're more diverse. Sometimes during the year those places will be really quiet, but in Coeur d'Alene people are surprised at the amount of energy there is on a year-round basis. People are living and working here all the time."


Whether North Idaho is a retiree magnet or not, unless average wages increase, growth will continue to be spurred by money from other areas. Still, leaders say even if transplants buy houses that locals can't afford, it's good for the economy.


"Local people aren't losing," Williams assures. "They don't feel pressured to move out -- they aren't getting pushed out."





Smart Growth


Change is inevitable and constant, but development is always a conscious act. Beutler sees development in North Idaho as something that will be -- and is being -- managed as the region grows. But some of the more pressing issues regarding the region's capability for growth aren't even completely understood, like the aquifer, the primary water source for more than 400,000 people in North Idaho and Eastern Washington. The aquifer is currently being studied, and environmental groups say unrestrained development and a century of logging and mining threaten it. While Spokane County has an unofficial moratorium on issuing new water rights, pending a comprehensive aquifer study, Kootenai County continues to build homes on the Rathdrum Prairie, over the aquifer; the county issued 55 new permits in 2003.


"We're seeing more and more building over the [Rathdrum] Prairie and sure, it's going to be a concern as more building goes on," notes Beutler.


Some regional leaders, particularly those in Spokane County, say being cautious now, not later, is a smarter growth management philosophy. The Inlander's "Border Crossing" (2/26/04) took a look at the growth patterns of both Spokane and Kootenai counties. One major theme involved the two counties' different philosophies of growth management.


"What's expedient in the short term may not be the best long-term solution," Jon Eliassen, president of the Spokane Economic Development Council told us. "How we manage our environment is the single most important aspect for the future of development. Communities have to think in this way. Sure, it's great now, but what's going to be the best thing 10, 20 years from now?"


But Beutler says management and infrastructure evolve naturally based on need.


"What comes first, infrastructure or growth? Usually growth, and we have room to grow in [Kootenai] County," he claims.


Whether people moving into the Coeur d'Alene area know that the lake is part of a Superfund site that the EPA has said will take more than $300 million to clean up, and whether new Sandpoint transplants are conscious of the ongoing struggle to keep the proposed Rock Creek Mine out of the Cabinet Mountains in Montana because of claims that it will pollute Lake Pend Oreille, is hard to say. Despite the environmental concerns, people are still flocking to the area based on the opportunities for outdoor recreation and the beautiful scenery.


"There are government agencies that are supposed to monitor [the effects of the Rock Creek Mine]," says Williams with the Sandpoint EDC. "I rely on them to do their job. No, the EDC and the environmentalists opposing the Rock Creek Mine are not connecting. The EDC has not looked at the studies showing [the potential for pollution] in the lake."


Jackson-Heim says Sandpoint's leaders are being proactive in some ways, but that part of what draws people to North Idaho is the lack of government-controlled development and the openness to unrestrained growth.


"North Idaho is one of the last bastions of the free market -- I mean the true free market," she explains. "People are less inclined to legislate that here than in other places. That doesn't mean they don't think about these issues, but it's definitely not as [much].


"This community is showing foresight that a lot of people can't see," she adds. "They're ahead of the game. It's easier to think about it ahead of time than to wait until it's a huge issue and retrofit the area."


When asked if Sandpoint is looking into managed growth 20 to 50 years down the road, Williams, with Sandpoint's EDC, says no.


"We're still a small town. We're a long way away. We don't have subdivisions going in; I don't see tract housing, urban sprawl or five-acre parcels."


As for whether developers and leaders have come to any cohesive growth philosophy: "Absolutely not," Jackson-Heim says. "There are a lot of [smart-growth, green-growth] theories out there. I can tell you, it doesn't work. Things tend to happen that the market will bear, in this community in North Idaho in particular. Really, with the infrastructure there's only so much you can do. That in itself regulates growth."


Though urban sprawl hasn't crawled into Sandpoint yet, it's certainly made its way just a few miles south; both Post Falls and Hayden have erupted in surface parking lots, big-box stores and traffic jams -- looking a lot like the places that the new residents left behind.


"I don't like what I'm seeing in the Post Falls area," says Wahlin, the residential contractor and Minnesota transplant in Sandpoint. "There are just fields of houses going up."


North Idaho is no stranger to boom-and-bust cycles -- in fact, its history has been defined by such cycles related to silver mining and timber harvesting. Investors have come in and made money off the region and left economic depression and environmental messes behind when markets shift. The region's move toward a more tourist-based economy, centered on places like the Coeur d'Alene Resort and Schweitzer, was calculated to insulate the region from such wild ups and downs. Still, now that the region is being discovered again, some fear it's in another such cycle, with real estate replacing silver as the commodity in demand. But boom times are always intoxicating, and despite the history of the Panhandle, "smart growth" isn't something many North Idaho leaders are willing to go out on a limb to define.


"The way I look at development and growth is that it needs to be done right," Wahlin says. "I love people, and growth is a natural thing. As long as there's care to make sure it's done properly, it's good."





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Publication date: 05/13/04