What makes housing unaffordable?

There is a lot of discussion surrounding the need for “affordable” housing. A relative term. What is affordable to some may not be affordable to others. For the most part, those of a more progressive leaning push for the government to do something to make housing affordable.

I think that maybe it would be more appropriate to examine what makes housing unaffordable. Inflation has made building materials skyrocket. Lumber prices fluctuate somewhat, but it is the costs for all the other components from paint to cabinet materials to flooring to plumbing to electrical — you get the picture. The root cause of the inflation is government deficit spending and printing more money to continue to pay the debt on the deficit.

Next, I would submit that property taxes (the cruelest tax of all) are a major culprit in high housing costs. This is huge burden is placed most significantly on those who rent and seniors (me) on fixed incomes. For discussion sake, if the Legislature or your county commissioners raise the property tax for a landowner who has a rental and has a tax increase, that amounts to $100 per month. The land owner will raise the rent to cover that expense plus. Currently, there is a move in our Legislature to raise taxes on all types of rentals, both long- and short-term.

Shall we mention homeowners or rental insurance? If you think insurance costs are high now, wait until all the ramifications of the fires in California and recent disasters elsewhere trickle down. I know people who have had insurance denied because we live in a high risk wildfire zone. If you can not afford the insurance, how can you find affordable housing?

Recently, our county commissioners raised all the fees (a tax) for well permits and septic permits, etc. Then add electrical permits, plumbing permits and in some jurisdictions building permits. These fees (taxes) contribute to making housing more unaffordable as they all get passed down to you and I.

Raw land currently has a lower tax property tax rate. There are bills in the Legislature to change that and non-qualified agriculture land to be taxed at market value. Do a search on HB 27 and SB 4. The unintended consequences of this will result in those with small acreages being forced to subdivide and sell. Deathlike for rural living. Ask any Realtor who is honest what is market value? Who determines the amount if the property is not for sale or sold? The government?

Some bemoan the fact that so many are moving here and that is driving up property prices. Maybe the “why” concerning the influx of newcomers ought be discussed? It is due to all of the above, where they came from? 

Ultimately, the culprit in all this is an out of control government spending. Now, dear reader, please do not assume I am anti-government. I most certainly am not. My point is this, if our government would significantly reduce taxes (fees), get out of the business of micro managing our affairs and let free market principles reign in housing costs it would be like throwing a rock in a lake. The ripple would result in lower housings costs.

The solution to making housing affordable is, in my view, simple. It just takes elected leaders with the guts enough to bring it about. How much legislation is actually cutting spending? If they do not, the homeless issue will just get worse. Homelessness may very well be you and I.

 Greg Hinkle is a former state senator from Thompson Falls.