Why housing is so expensive in Idaho

If you've tried to buy or rent a home in Idaho recently, you already know: housing costs have become a serious burden for families across the Gem State. Housing is consistently ranked as a top concern in every survey and poll that goes out. But why? The answer involves a collision of surging demand, stubborn opposition to growth, high construction costs, and land-use rules built for a different era.

Idaho is one of the fastest-growing states in the nation, and that growth has been a double-edged sword. While new residents bring economic vitality and community investment, the pace of population increase has simply outrun the housing supply, leaving working families, young people, and seniors caught in the gap.

Over the past decade, Idaho has consistently ranked among the top states for population growth, with the Treasure Valley and other metro areas absorbing tens of thousands of new residents. Between 2010 and 2020, Idaho's population grew by more than 17 percent and the pace has accelerated since.

More people means more demand for housing. When supply can't keep pace with demand, prices rise. That's Economics 101 and it's exactly what Idaho has experienced. The result: home prices in the Boise metro area more than doubled in the years following 2016, and rents have climbed sharply across the state.

But population growth alone isn't the problem. It's also a mismatch between growth and the housing we're allowed to build. One of the most underappreciated drivers of Idaho's housing shortage is the political opposition to new development. Across communities in the Gem State, proposals for new apartments, townhomes, and mixed-use developments are routinely met with vocal resistance from established homeowners who fear changes to neighborhood character, increased traffic, or declining property values, despite evidence that well-designed infill development rarely produces these outcomes. Every housing unit that gets blocked at a planning meeting is a family that can't find an affordable place to live.

This anti-growth sentiment shows up at city council hearings, in zoning board appeals, and in pressure on local elected officials to slow down or stop development. When local governments respond to these pressures by denying permits, imposing lengthy review processes, or requiring expensive design changes, the cost gets passed directly to future residents or the project never gets built at all.

The voices opposing growth are often the loudest in the room. Those who would benefit from new housing -- people being priced out of the market, young families, and essential workers -- frequently aren't at the table. That's a problem the Gem State Housing Alliance is working to change.

Even when communities are willing to welcome new housing, builders face steep headwinds. The cost of land, labor, and materials has climbed significantly in recent years, making it harder than ever to deliver homes at prices working families can afford.

Land costs have surged across Idaho's growth corridors as competing developers and investors bid up parcels. In many urban neighborhoods, land alone can account for a third or more of total development costs. Labor shortages in the construction trades, a nationwide challenge, drive up wages and timelines, adding to carrying costs. Material costs, including lumber, concrete, and steel, spiked dramatically during and after the pandemic and have remained elevated.

Financing adds another layer of difficulty. Rising interest rates have made construction loans significantly more expensive, and many community banks have tightened lending standards for multifamily and mixed-use projects. Smaller developers, the kind most likely to build the modest, attainable homes Idaho needs, often struggle to access capital on workable terms. The result is a market increasingly dominated by expensive, high-end units that pencil out for lenders, while the affordable middle is left unbuilt.

Perhaps no factor is more fixable and more overlooked than Idaho's outdated zoning codes. Across much of the state, local land-use rules reflect the priorities of the mid-20th century: single-family homes on large lots, strict separation of uses, and deep suspicion of density.

These codes effectively prohibit what planners call "missing middle housing" the duplexes, triplexes, fourplexes, townhomes, cottage clusters, and small apartment buildings that once defined walkable Idaho neighborhoods and that represent the most attainable housing type for moderate-income households. A duplex on a residential lot is illegal in many Idaho communities. A four-unit building on a corner lot once common in cities like Boise can require a lengthy variance process with no guarantee of approval. Missing middle housing is the most powerful tool we're not using as it fits the scale of our neighborhoods and the budgets of our neighbors.

The gap between what our zoning codes allow and what our communities actually need is enormous. When only large single-family homes can be built, only high-income buyers can afford to move in and everyone else gets squeezed out. Modernizing zoning to permit a range of housing types by right, without lengthy discretionary review, is one of the highest-impact steps Idaho communities can take.

There's no single solution to Idaho's housing affordability crisis, but the path forward requires action on multiple fronts simultaneously. We need communities that welcome growth and recognize new neighbors as assets, not threats. We need to streamline permitting and approval processes that add time and cost without improving outcomes. We need to update zoning codes to legalize the full spectrum of housing types our neighbors need. And we need to work creatively on financing mechanisms that help smaller developers build attainable homes.

Most of all, we need to start telling a different story, one where building more housing is a community enhancement, not an imposition on existing residents. Idaho's growth is not going to stop. The question is whether we build enough housing to keep this state affordable and welcoming for everyone, or whether we allow scarcity to drive out the workers, teachers, nurses, and families who make Idaho the place we love.