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To House or Not to House

These two graphics, the first borrowed from the Jackson Teton County Housing Authority, the second from Jonathan Schecter’s Jackson Hole Compass, are what an imploding middle class looks like: median home prices completely detached from a community’s wage reality that drive an ever widening wedge between the haves and have-nots.



When the world discovered Teton County—bucolic, quiet, neighborly; surrounded by wooded hills teeming with wildlife; next door to some of the finest protected public lands in the nation—we became the it place to live. And when Teton County became the it place to live, the world opened its wallet and started buying it up, parcel by parcel, home by home, condo by condo.

Locally-earned wages haven’t kept up to the value placed on our land by the global market. Indeed you’d need a county full of the world’s top financiers/entrepreneurs/scientists/sundry 1%’rs to generate local wages that match local real estate prices—a mix one might expect in downtown Manhattan, or Silicon Valley, but not here. Our economy is tourist-based with average annual wages hovering in the mid-20k’s. Sure there’s some construction and wealth management here too. But the overall mix leaves the median income around $65,000 (around $95,000 for a family of 4), or well short of the market price set when global demand intersects with a miniscule supply of developable private land.

In economic speak, our real estate market is “distorted.” Why does this matter? Because the market is indiscriminate. It does not care if the best teacher can’t afford a home here. It does not care if your hospital staff is a nurse or two shy because they’re commute is blocked or congested. Or if the mental health provider responding when a kid is suicidal lives too far away to prevent a preventable tragedy. It does not care whether there are 50 volunteer firemen and women nearby to fight a fire, or 5. The market simply says either you can afford to live in Teton County, Wyoming, or you can’t. And right now, many can’t.

Losing entrepreneurs is one thing—our community becomes less vibrant as they take their energy, passion and creativity to enrich other communities. Losing health care workers that serve rich and poor alike is another. Or losing teachers that ensure the best quality education for our youth, or veteran peace officers who know our community and its quirks, or construction workers who also volunteer as fire fighters, or wildlife biologists and game wardens who monitor and defend our wildlife and ecosystem.

“Subsidized housing!? Doesn’t a tax dedicated toward housing just mean growth, urbanization and a handout to the private sector and ski bums!?” worry those opposed to this policy. “Let the market sort this out,” they might say.

But can we be so sure that laissez-faire policies will result in less growth? As the world’s deepest pockets continue to see gold in our green pastures, the price of even small lots that normally target middle class workers keeps going up. And up. Last I checked, town-size lots cost around half a million dollars, and there were only 5 homes on the market priced less than three quarters of a million dollars.

You can fit a lot of town-size lots on a couple hundred acres of ranch land. But would you price them to sell to the local work force?

You’d likely design them to attract the broadest possible demand, especially the very wealthy. Perhaps you’d use your water rights to make a few ponds, enhance some trout habitat. In the ultimate laissez-faire world you’d make them short-term rentals. Then you’d trickle them onto the market so that a flood of supply doesn’t drive down prices. In so doing you’d double, triple, maybe quadruple the asking price over what you would get selling to Teton County’s local work force.

Thus it’s unlikely that goosing the supply of market lots to the tune of hundreds of new units will provide the workforce housing one might expect. In the face of demand from the global one-percent, a developer pricing lots that locals can afford would be leaving money on the table. Sure we’d require 25% of the total to be deed-restricted workforce units (see LDR division 7.1.4.E). But 25%? That’s hardly going to house the workers filling the jobs created by the other 75% market-rate units, let alone replace the 8,000 or so existing units already leaking out of the aging hands of long-time residents and workers.

And even if piling on supply were to provide workforce housing, for a time, how would it impact our wildlife and open space values? What would a free-market ramping up of supply do to our over-all build-out? How could it possibly fit our town-as-heart, community-first-resort-second vision?

It can’t. Markets deliver critical information via price signals. But free-market policies need to live in a practical, real world context. In Teton County, a free market solution to our housing and community health challenges would lead to growth for growth’s sake at the expense of our core values.

Out of concern for those core values, we’ve put the brakes on growth. Recently implemented land development regulations removed around 2,400 potential units from the rural county. Even if only half of those units would have ever been built—higher end homes one and all—we’re still well-below build-out numbers hashed out during the drafting of the 2012 Comprehensive Plan. In fact we’re knocking even more than that off of our overall growth because about every four high-end homes requires another dwelling unit’s worth of workers to build it, care-take it, and provide services to its inhabitants.

The way to stop growing is not to gut the middle class and cut the lower class off at the knees. The health and welfare implications are too dire: over-crowded, cost-burdened, dilapidated housing is already Teton County’s second highest rated health issue. Twenty percent of county households have severe housing issues, meaning that a household lacks complete kitchen facilities, lacks complete plumbing, is severely overcrowded or is severely cost burdened (costs including utilities exceed 50% of monthly income). The collateral damage of severe housing costs us tax dollars too, whether it’s for expensive emergency care or broader and more comprehensive safety nets.

Voting to approve a penny of sales tax, half of which would go towards housing (the other half towards transportation alternatives to single occupancy vehicle travel), allows local government to target housing towards the middle class and protect community character without blowing the lid off build-out numbers. Investing half of that penny in housing can subsidize new construction through various channels. It can also be used to purchase easements on existing homes, keeping existing stock in the hands of workers while justly compensating owners expecting a market price for their property. The former targets housing exactly where the Comprehensive Plan calls for it: in our complete neighborhoods, not out in important wildlife habitat and open spaces. The latter adds no new housing, helping ensure we remain within the community’s vision for build-out.

A severe housing shortage locks in the extreme gap between the haves and have-nots, destroys community vitality and drains hope. Voting to approve the sixth penny protects space for middle class families to thrive without trying to build our way out of the problem only to the detriment of our wildlife and open spaces.

Community Priority Fund: The Missing Cherries

The private sector in Teton County has delivered almost 4,500 acres of conservation. But has it protected and will it protect the most important natural resources critical to wildlife? Or do private sector efforts skew towards providing the most benefit for a handful of private citizens? Will the private sector reliably protect migration corridors that allow wildlife to cross arterial roads and skirt development? Or protect critical habitat? Will the private sector provide a central, convening authority to organize the resources of wildlife biologists and conservation staff across federal and state agencies?

A wildlife and open space program funded by the community priorities fund could be overseen by a staff biologist and receive input from a private sector task force. The program could produce wildlife crossing master plans and maps identifying the conservation easements necessary to ensure the long-term viability of those crossings. It could identify and catalogue the highest priority lands for habitat preservation and wildlife permeability.

The program could include a small fund that serves as a source for grants to developers seeking to go above and beyond in providing open space, habitat mitigation and other community benefits. Grants could act as seed money leveraged by private sector donations. For example, matching grants could help fund improvements along the Flat Creek corridor that improve and protect Flat Creek as a natural resource and community benefit as properties along its banks redevelop.

Funds up to 10% of the cost of an easement could be contributed to help acquire easements essential for wildlife migration and habitat where such easements are too small or simply aren’t in the right view corridor to attract the attention of private donors.

While strict zoning and strong private sector efforts have preserved substantial tracts of open space, in the long run, the private sector might leave critical habitat and migration corridors unprotected and open to development. Failing to address this as a community priority is a critical flaw in the community priority fund as structured.

Community Priorities don’t Stop at Housing and Transportation

On February 1st, 2016, Teton County commissioners and Jackson town councilors voted to approve asking November 8th voters the question of whether or not there should be a sixth penny of general revenue sales tax. Since 1990 or so, Teton County voters have voted every two or four years for a sixth penny of sales tax for specific purposes (example here) such as multi-use pathways, public facility upgrades and workforce housing. This year the choice is whether the sixth penny should be in the form of general revenue. I voted in favor of putting the question on the ballot to let voters decide. However the final resolution describing how the funds would be spent left out conservation. Are we trying to sell the community a cherry pie without the cherries?

The additional revenue is meant to address community priorities outlined in the Teton County Comprehensive Plan, the community’s guiding vision document. There are three community priorities discussed in the plan: to preserve and protect the areas ecosystem (conservation), to protect the community’s character and vitality by housing 65 percent of the local workforce in Teton county, and to reduce per capita vehicle miles traveled to avoid widening roads traversing the county. Alas, the final resolution on how to direct the spending of the revenues included the latter two only, not even leaving a placeholder for conservation. I abstained from the vote.

The government should not force citizens to pay taxes unless the increase in public welfare through the provision of the goods and services the revenue enables is measurable and substantial. There are certain goods and services clearly best provided by government—public safety, an impartial judicial system, and defense, for example.

In Teton County protecting the environment, housing, and transportation exhibit credible market failures that decrease community welfare. Development that doesn’t consider costs to wildlife and wildlife habitat threatens a sustainable tourist-based economy. A lack of transportation alternatives and key infrastructure threatens our ability to transit the county to receive medical attention, conduct commerce, or run errands. A lack of housing affordable to the middle class erodes a demographic structure sufficient to provide core services and support the needs of a thriving community.

To ensure measurable community benefit, projects funded by the revenue should follow the private sector’s lead. The Housing Action Plan calls for the private sector to lead efforts to deliver housing. The Integrated Transportation Plan targets transit and efforts to reduce congestion to match where the private sector delivers housing. If the spending resolution had included conservation, a private sector task force comprised of conservation experts and federal and state wildlife officials could identify how best to synchronize with the private sector and optimize wildlife habitat and open space preservation.

In a nutshell, the role of the Community Priorities Fund is to mitigate fundamental threats to the overall community welfare where the private sector has consistently failed. While housing and transportation suffer from market failures, at least they have lobbyists. Wildlife don’t. And most certainly the market will not fully account for them in the long run without help from the public sector. Indeed our Community Priority pie seems to be missing its cherries.

Population Growth, Ambulance Calls and the Birthday Problem

Recently I heard that there had been three simultaneous emergency service calls on one night, straining the capacity of our EMS that is staffed in part with volunteers. This got me thinking: given our population now, what are the odds of three simultaneous emergency service calls? And, perhaps more importantly, how fast would this probability increase as our population increases? The more often multiple emergencies occur at the same time, the more the capacity of fire and EMS needs to increase in order to avoid delays in response to any one of those incidents. It turns out we go from a state of a low probability of simultaneous incidents to one of high probability faster than our population grows.

Investigating this question requires a foray into the world of probability. To simplify, a good first step is to recall a standard exercise in most intro to probability courses: the birthday problem. The basic problem is, given a group of people at a party, what is the probability at least two of them have the same birthday? Assume leap years are excluded and all 365 days are equally likely. I had to look back at a lecture with the answer that I saw in a MOOC, Harvard’s Statistics 110, taught by Joe Blitzstein.

By the pigeon hole principal the probability reaches 100% when you have 365 people. Most people are surprised to learn, however, that there’s a greater than 50% probability with only 23 people in a room, and the probability reaches 99.9% with only 70 people in the room.

The formula to find the probability of three birthdays falling on the same day is more complicated, but there’s a way of approximating a solution using a probability distribution known as the Poison distribution. With 30 people in a room, there’s approximately a 3% probability of three birthdays occurring on the same day. With 100 people, the probability is over 70%. So as the “population” in the room roughly triples, a situation analogous to Teton County over the past 30 years, the probability of three random birthdays falling on the same day goes up by more than 20 times. At some point Teton County, by the pigeon hole principle, will have a 100% probability of having multiple triple-call scenarios. This level of population might be well into our future. Note, however, that the probability of simultaneous three-call scenarios grows faster than our population grows until we are over a 95% probability.

So far we haven’t answered the question, “What’s the probability in Teton County of three simultaneous emergency calls?” That’s a far more difficult one, especially given how our population fluctuates during the year. However this does point out that we should expect our need for fire and EMS services to grow faster than our population. How is the subject of future blogs.

Protecting Wildlife in Practice

Moose, deer, elk, sometimes one of our shy local carnivores, sometimes a hard-to-photograph bird—it’s hard to visit Facebook without seeing wildlife through the lens of a wildlife fan or photographer, amateur and professional alike. Clearly we find huge value in having wildlife around and being able to view it.

Can we measure this value? Or, perhaps, why would we need to? We can, to a large degree measure wildlife’s value. And we need to because we as a community have a right to protect that value—it’s part of protecting our welfare. The more clearly we define that value, the easier it is to protect it, thereby protecting wildlife.

So how do we go about understanding the value of wildlife? This website provides a brief background. Facebook posts reflect wildlife’s aesthetic value—it’s beauty and our appreciation of that beauty. To hunters, fisherman and photographers wildlife also has recreation value. To scientists and wildlife biologists wildlife also has biological and scientific value—That is its contribution to the ecosystem. Finally, people from all walks of life recognize the intrinsic value of wildlife, the satisfaction we get from just knowing that it exists.

We love our wildlife. Yet we often imperil its existence because we also value private rights to act in individual ways that more immediately enhance our own welfare. A simple example is driving. We earn the right to drive, and exercising that right provides benefits. But all of us combined, by exercising that private right, kill on average about 200 large ungulates a year on roads in Teton County.

We enshrine our right to protect the value of wildlife through planning and zoning. Here in Teton County, Wyoming we have, to a very large extent. Our 2012 Comprehensive Plan puts the protection of wildlife and wildlife habitat as the first of our three broad common values. Moving forward, we need to make sure regulations and standards do a good job defining the boundary within which we can exercise our private rights with a great degree of freedom, but beyond which our community gets to exercise its right to protect wildlife and wildlife habitat.

Because in the end, we all derive value, in some way, from wildlife.

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