Soaring property values may evict middle-class Idahoans from their popular rural retreats
Published by The Idaho Statesman on Sept. 16, 2007
As a child, Kathy Bozman carried water up from the creek to her family’s half-finished A-frame cabin on the mountainside west of Lake Cascade.
Vivianne Knight remembers her children getting up on water skis for the very first time, and an endless parade of dogs leaping off her family cabin’s dock into Payette Lake.
Kathy Totten’s parents were married at their lakeside cabin. Totten met her own husband there more than 40 years ago. Her brother married his wife there, too.
In Idaho, these stories aren’t unique. For generations, Idahoans enjoyed the undiscovered wilderness. Few fences, fewer “No Trespassing” signs, and affordable land for modest log homes or even trailers with snow roofs — just enough for a family to spend a couple of weeks in the summer and weekends year-round.
Ask your Idaho-native friends — most will have their own memories, if not of their own family’s cabin, then of a family friend’s, or an inexpensive rental.
But that Idaho family tradition could be ending, a victim of the very beauty and desirability these cabin owners have known about all along.
“This place is no prize,” Knight said of her family’s cabin on Payette Lake. “But it’s got a special place in our hearts, even though it’s kind of a rickety old place.”
But the land below it, which the family rents from the state, is assessed at close to $2 million, and Knight’s family can’t afford the lease anymore — at a straight 2.5 percent of value, it is close to $50,000 this year.
The family put it up for sale at the start of the summer at about $1 million. No bites. The cabin isn’t worth it and the land lease — which jumps in cost every year — is too risky, Knight figures.
It just doesn’t seem like a million-dollar home.
“You’d say, a million what?” she said.
THE MARCH OF PROGRESS
The Wood River Valley was the first place in Idaho where prices outpaced tradition.
Even at the start of Sun Valley Resort, Idahoans intermingled with Ernest Hemingway and the society types who took the train in from Chicago.
But natives were edged out of Sun Valley, then out of Ketchum and Hailey. Eventually, Bellevue and parts south saw prices skyrocket, too.
The history of one bar says it all: Once a rough-and-tumble hangout for miners and sheepmen, The Mint was reopened in the 1990s by Hollywood star Bruce Willis.
In the past few years, though, the Sun Valley experience has spread.
This month in Slate, an online magazine, columnist and Coeur d’Alene native Bruce Reed noted that his hometown’s new contingent of millionaires just attracted the first visit from a Republican presidential candidate — Rudy Giuliani — in nearly three decades.
Sandpoint property values have climbed so quickly that residents have been close to revolt over property taxes.
Their own lawmaker — sympathetic GOP Sen. Shawn Keough — had to bang her shoe on the table to restore order to a legislative hearing there in 2005.
A decade ago, McCall residents could see it coming, though they were just at the tip of the iceberg.
From 2004 to 2006, Valley County’s residential property values climbed by 123 percent. Sandpoint’s Bonner County beat that with 129 percent. Kootenai County values rose by 116 percent. Rural Adams County, seated at Council, was close behind at 115 percent.
Second homes, most would argue correctly, are taxed more than owner-occupied houses, which benefit from the homeowner’s exemption. But that means property-tax escalations can price modest-income families right out of their inheritance.
Writer Clay Morgan, who used to live in McCall with his teacher and future astronaut wife Barbara, may have summed it up best in 1997. McCall, he said, is “getting better and worse at the same time.”
‘WHATEVER IT TAKES’
Two generations ago, Kathy Totten’s grandfather James W. “Babs” Babcock agreed to lease some land from the state, even though he had to drive four hours over dirt roads to get there.
When Ponderosa State Park expanded its facilities, the state moved the family’s cabins to a plot with 80 feet of lakefront next to the park. But Totten can still recognize their old croquet court in a level spot of land in the park.
Her father had the chance to sell the lease for some much-needed cash, but he decided against it.
“He said that’s the one and only thing I have that I can leave my children,” Totten said. “My folks couldn’t afford to spend the summer, or even a few weeks. We went up during the weekends.”
Now the town has changed. Tourists have replaced lumberjacks. Private landowners have fenced off chunks of what was once Boise Cascade timberland.
“We could hike through and never find a locked gate,” Totten recalls. “Now the gates are up. The ‘private property’ signs are up. So who won? Who came out ahead?”
Totten’s mother is 90, and her six children will pay the lease as long as they can — despite the rise in cost from about $4,000 in 1998 to some $37,000 now.
“We just vowed that we will do whatever it takes to keep it for her as long as she’s alive,” Totten said. “For us, it’s just hard to even imagine what we’re going to do when that bill comes. We don’t know, at this point, what to do.”
“If you can’t keep it,” she added, “somebody richer than you has to take it.”
A WAVE OF NEWCOMERS
The richer people have had no trouble snatching up deeded land.
Tamarack Resort jumpstarted development with two sales in 2004. The first sale unloaded 104 homes and sites for $46 million in three days. The second sold 64 custom homes and lots for $33.4 million in a day.
Idahoans accounted for 58 percent of the second batch’s buyers, the resort said. California’s made up the second-biggest group, at 28 percent.
Even tucked-away treasures like Featherville and Pine are already feeling the impact. Cabins are getting bigger and prices higher.
A log cabin in Pine that Julene Dodd inherited in 1970 now has higher property taxes than her home in Nampa. One three-bedroom home outside Featherville — a winding, nearly two-hour drive from Boise — is listed at $535,000.
But cabin-goers in two parts of Idaho are facing an even tougher break from the past.
JUST AS MUCH HISTORY, BUT NO REAL PROPERTY
In 1890, when Idaho became a state, the federal government granted more than 3.6 million acres to the state to benefit public schools. Drafters of the state constitution resolved that a small portion of these lands could be sold each year, but the vast majority would be managed to raise money.
They’re referred to as the “endowment lands,” and they have been leased to cattle grazers, harvested for timber, and — in about 150 lots on Payette Lake and more than 350 lots on North Idaho’s Priest Lake — leased to residents as cottage sites. Residential real estate brought in almost $4 million in fiscal year 2006 — about one-tenth of the amount raised by the state’s most lucrative land program — timber sales.
Totten’s grandfather leased state land. Knight’s parents did, too, a generation later.
But in the past decade, the costs have climbed tenfold, said Jim Young, president of the Payette Lake Cabin Owners Association.
Lakefront acres were assessed this year at $23,000 per linear foot — that means leaseholders pay $575 a foot.
For 100 feet of shoreline, that’s $57,500.
“As the property values skyrocket, so does the rent,” he said. “This year, the rents are so high, there’s not even a market for these state-lease properties. It’s gone so crazy that you can’t even give them away.”
Like Knight’s family, many cabin owners have tried to sell the lease rights this year, because they can’t afford to pay the higher cost. Not a single one has sold.
Even wealthy families are looking elsewhere. It can be a better deal just to rent by the month or the week.
“It’s kind of flip-flopped,” Young said. “When you can rent something short term, like a cabin for a week, for less money (for the time) than you can rent something long term, then the system has gone awry.”
Families are facing the prospect of just giving up the lease and losing the value of the cabins and homes they built on the land.
“The only alternative is to walk away,” Young said.
WHEN THE CONSTITUTION TRUMPS TRADITION
If Idaho could make a move to protect tradition, you’d expect it to be in the Land Board, where the state’s top elected officials oversee the endowment lands.
But the board — made up of the governor, secretary of state, attorney general, controller and school superintendent — tried that once before and was shut down.
A 1995 law that required the Land Board to consider the cattle industry along with public schools in endowment decisions was struck down in 1999 by the Idaho Supreme Court. The constitution, the court said, was clear: These endowment lands are to raise as much money for education as they can. That decision hangs over these cottage sites today.
“The Land Board has an obligation to set up a situation that will yield the highest return the land can get,” Young said. “I think everybody recognizes that.”
Secretary of State Ben Ysursa says he and other members of the Land Board understand the dilemma.
“We are not, certainly, deaf or immune from the criticism that we’re driving middle-class folks out of these cabins. A lot of them have a lot of family history there,” Ysursa said.
But, he said, the Land Board simply can’t make decisions to let modest-income families keep these leases, even if the officials want to.
And far from making it cheaper to lease, the board could make it more expensive. The 2.5 percent of assessed value the board charges has already been increased to 5 percent in two new Priest Lake lots to go up for auction in October — a move that could test the water on whether the higher rate is workable.
“I’m pretty confident that figure’s going to move (on all leases),” Ysursa said. “Move to what, I don’t know. But it’s not going down.”
What the board doesn’t want, though, is to drive the leases so high the cabins sit empty.
“Are we killing our market?” Ysursa asked. “We have to look at the whole picture, get as much as we can now, but if we’re turning this into a bunch of buildings up for sale and nobody is going, that’s no good either.”
MAYBE FAMILIES ARE CHANGING, TOO
Kathy Bozman was 9 when her father, a career National Guard soldier, spent a few thousand dollars on a half-built cabin in what was then — and for many years later — an isolated road to the west of Donnelly. There was no electricity, no running water.
On winter weekends, they drove to the Tamarack Falls Store, where they hopped on two snowmobiles and headed six miles through the snow to the cabin.
Bozman remembers playing board games by the light of a kerosene lamp and coming across a wolf in a nearby clearing with her father, who died when she was 14.
The family installed power and water pipes, built a new foundation, and performed countless maintenance and improvement projects.
Now, this modest home sits near the cross-country trails at Tamarack Resort. Million-dollar log mansions dot the forest — and drag all property values higher, including that of Bozman’s cabin.
“In the last three years, it’s jumped over 150 percent, and that’s with appealing it every year,” she said.
Though the fourth generation of Bozman’s family is now enjoying this little cabin in the woods, she wonders if the state isn’t changing around them.
“My whole family has always been here; it’s something we’ve always worked on and we always did,” she said. “Very few of the big-money people in the huge cabins are local people who have been here. I don’t blame them — if I had a lot of money, I’d probably do that, too. But I think the priorities for families have changed.”