For its latest episode of Elevating The Conversation, the Journal sat down with Joel White, executive officer at Spokane Home Builders Association, to discuss the Inland Northwest Housing Market.

The Elevating The Conversation podcast is available on Apple Podcasts, Amazon Music, Spotify, and elsewhere. Search for it on any of those platforms or the Journal's website to hear the entire conversation, but for now, here are five takeaways — edited for space and clarity — from the episode.

1. A lack of available land in Spokane is among the challenges impacting the number of single-family homes being built.

All this goes back to available land. You look at the price point in 2017, you could still find lots in Spokane for $80,000 to $90,000. Today, those are $200,000 lots. 

What happened was that post-COVID the people started saying, “Hey, I can't find the type of housing I want to live in Spokane. I'm gonna move to Post Falls.”

And they have built thousands of homes — in places I didn't think they'd be building on the prairie. 

It's just a big change that we've seen in dynamics of what's going on. Spokane didn't have those homes. We put moratoriums on certain areas of Spokane for housing and there are other areas that we just don't build single-family homes in the city of Spokane.

Now, the multifamily units are necessary. I'm not dismissing that they're necessary. But, Spokane faces some real significant problems, and they don't have adequate infrastructure. Spokane has underdeveloped a lot of the aging infrastructure we've made. And we've had some opportunities, and we've built some new roads, other things. But we still don't have quite the capacity we need. 

Some of this could go back to when we didn't have enough fees on people as they were building in the past. That could be part of it. But really, it's just the investment. 

Instead of spending on infrastructure, we’re spending on social services, and other things that if you solve the housing crisis, some of those things would go away and you probably wouldn't have spent the money. Investing in quality infrastructure would be a huge benefit.

2. There’s disagreement over how much buildable land is available in the city of Spokane.

 The Growth Management Act doesn't allow for us to go outside of those boundaries. The city has not really annexed either, so they've kept inside their own boundaries. 

We've built out most of the city of Spokane, yet there are claims that we still have buildable capacity. Where's that gonna go? And that's a big question mark as we move forward.

Right now, we're going through a growth management review process, a 20-year cycle review. The city has basically taken a stance that they feel they have the ability to accept more housing; more than I believe and the industry believes that they can accept.

They have been very proactive. I'll give the credit to the planning department. They've tried some new things but, some of these are unproven markets. People still want a single-family detached home. That's the No. 1 priority when you look at it.

So, how do we build more townhomes or cottage homes? There are other ways to build besides apartment complexes.

3. Homebuilders face multiple challenges.

 I refer to it as the “three Ls:” land, labor, lumber. I've added a fourth "L," which is lending, so that goes back to the mortgage rates.

Land supply is just simple, basic economics 101. When you don't have enough land, prices go up.

The state Growth Management Act was passed in the early '90s. It's proven across the state that when you artificially limit where you can build — not based on infrastructure — you artificially limit the boundaries, the values go up.

Land supply is No. 1. And some say, “Well that's buildable.” 

Yes, it's buildable, but at what price? The easy land has already been built on. These developers have been looking for land for a number of years, so the lots that are available have some issues with them.

Labor: We have a shortage of workers. 

Our workforce is aging out. We have largely old men working on job sites. They're very skilled. They work really hard.

That next generation, how do we get them engaged in construction? It provides so many benefits. They get to see what they build and they get a great wage right out with no student debt.

I think we're making some headway, but it's a 20-year push. We’ve got to get more workers into the trades.

And then there's lumber material costs. We've seen spikes during COVID. Some of the areas really sort of got crazy; some of the cost of materials where you saw lumber to go up to $1,300 for a thousand board feet. Well, now it sits about $500.

Building materials have gone up. Part of it’s just inflation and gas prices too, in the state of Washington, don't help. All those materials have to be trucked to job sites.

Maybe you could argue it's well-intentioned when they put all these gas taxes on, but it does increase the cost of homes and materials.

4. State regulations are driving up costs.

Building codes have significantly raised the cost of housing. Over 25% of the cost of a home is just government regulation. And it’s been growing in Washington state. It’s higher in Washington state because of these energy codes they passed.

The last two energy code cycles, we estimate an increase of at least $20,000 each cycle just because of new energy codes.

I understand that the idea is good, the intention is good. New homes are already very energy efficient though, so you’re adding a lot of cost to get minor gains.

5. Growing awareness of housing issues is fueling optimism.

 There's at least a lot of conversation now. When I started — I’ve been at (Spokane Home Builders Association) for over 20 years — housing was never one of the top stories.

Today, housing is in the news and how it’s affecting people. It's not about my members as much as it’s affecting the citizens of Spokane, citizens across the country.

We need to take some actions very quickly. So yes, there is conversation happening. That's the positive.

Action is the next step. How do we make those positive changes? Can we change some things with how we're doing?