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Idaho Senate approves gap financing fund for workforce housing

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The Idaho Senate approved a bill creating a workforce housing development fund to help build about 1,000 units of housing. (Kelcie Moseley-Morris/Idaho Capital Sun).

Program uses $50 million in federal dollars to help build 1,000 units

The Idaho Senate passed the bill providing $50 million to a workforce housing fund on Tuesday, using federal American Rescue Plan Act dollars to help build about 1,000 units of housing across Idaho.

House Bill 701 passed 26-9 and was narrowly approved by the House of Representatives earlier this month. The program would provide grants to housing developers to help build units that could be rented at a more affordable rate for working-class residents. The funds would help provide the last dollars needed to ensure a development moves forward after the use of conventional financing and available tax credits, said Sen. Jeff Agenbroad, R-Nampa. Developers would apply for the funds through the Idaho Housing and Finance Association, which would administer the program.

The fund would be created in lieu of $50 million that might have been allocated to the Idaho State Housing Trust Fund, a fund created in statute in 1992 that has never been allocated any money by the state.

At the beginning of the session, state budget chief Alex Adams said federal guidance wouldn’t allow for the funds to be put into the trust fund.

Agenbroad said the legislation was driven by the Idaho Workforce Housing Coalition, a group of businesses and organizations who are seeing the effects of rising home prices in Idaho.

“Our state is growing rapidly, and this pace of growth has challenges,” Agenbroad said on the Senate floor. “In almost every corner of the state, young families and senior citizens are struggling to keep up with the cost of housing.”

The funds would be available to nonprofit entities as well as for-profit businesses through an application process, and the bill text specifies 20% of the funds to be set aside for rural community developments. If the set-aside funds remain unused in rural areas after two years, the dollars would become available to all communities.

Senators differ on constitutional obligations of Idaho Legislature

Developers would be required to provide the property at a rent rate affordable to 80% of the area median income population for a period of 30 to 40 years. In Boise, the median income for a two-person household is $60,200, which translates to an affordable rent of $1,505 per month.

The bill also includes a sunset date on the program of Dec. 31, 2026.

Sen. Lori Den Hartog, R-Meridian, said she didn’t support the bill because the language was too broad, and she didn’t think the Legislature had a responsibility to provide housing resources.

“We’ve seen a shortfall in school facilities, and we have a constitutional obligation to work on those, and I’ve been disappointed with some of the things that haven’t moved forward with that this session,” Den Hartog said during debate. “I don’t dispute the need, I don’t dispute the effort, I’m just not sure this is the right vehicle and in the right manner.”

Following Den Hartog’s comments, Sen. Michelle Stennett, D-Ketchum, became emotional while talking about the arson fire of a building she owned in Ketchum that she was attempting to renovate as workforce housing.

The City Council in Ketchum also considered “temporary tented housing” during the summer months of 2021 as a short-term solution to workforce housing problems.

“When you think about the responsibility of the Legislature, we have teachers and nurses and principals living in RVs out in the forest because they cannot get housing,” Stennett said. “And at some point, it does start to break down our systems that we are constitutionally responsible for.”

The bill includes an emergency clause that would make it effective upon approval. It now heads to Gov. Brad Little’s desk.