Bonners Ferry expands rental market with new duplexes

As the nation’s housing costs continue rising, Boundary County remains relatively stable.

Affordable new duplexes have hit the market in Bonners Ferry, adding to the area’s growing list of renter-friendly developments, as much of Idaho faces inflated housing costs.

With the 32 new rentals off South Main Street, local developers Jim Ball and his wife Brenda have built almost 230 units in the county, many of which are leased at below the county’s median rental cost. The most updated statistic from the U.S. Census Bureau lists the median rental cost in Boundary County from 2019 to 2023 at about $870. 

The mission of the Balls' local business, Capitol Success Property Management, is to create sustainable and affordable housing solutions in Boundary County based on area need, income and industry, even if its developments have low profit margins of typically about five percent. 

“I’m not going to raise my cap rate just because I want more money,” Ball said. “I’m only going to raise it based on inflation or utility cost increases. We don’t just want to make a profit; we want to create a sustainable and equitable community.” 

In the spring, construction of 16 single-story units for under $900 will also finish near the duplexes. Ball said he expects the profit margins to be almost as slim as a high-interest savings account, but the affordable rent will represent the market well. 

Boundary County’s relatively stable rental market 

Five years ago, the median rental cost in Boundary County was over $200 per month less than it is today, according to the U.S. Census Bureau.  

“Five years ago, we would have never dreamed that what’s charged for rent today would be an affordable number,” said Boundary County Assessor Olivia Drake.  

But compared to other North Idaho counties, Boundary’s inflation rate is significantly lower. Ten years ago, the typical rental in Boundary and Bonner counties was about the same. Now, the median rental cost in Bonner County is almost $200 a month higher. 

“I think that our low median rent is a testament to how strong our local developer-oriented programs are,” Ball said. 

Rising local costs have been attributed to the market strain from population growth and the rising cost of construction materials and labor since the COVID-19 pandemic. Ball said he pays builders as much as double what he paid before the pandemic. The price of building materials ballooned to as much as 500 percent; a 2x6 board went from $2.80 in 2018 to $13 in the height of the pandemic, he said. 

Statewide, the decline in new housing construction dates as far back as the housing market crash in 2007, which coincided with a surge in Idaho’s population, said Samuel Wolkenhauer, North Idaho regional economist for the Idaho Department of Labor. 

“If total employment looked the same as construction employment over the last decade, you would call that a depression,” he said. 

Regionally, tourism has also driven up rental prices in North Idaho, Drake said. Some homes that would be on the long-term rental market are now on Airbnb or VRBO. The two vacation rental platforms boast well over 100 listings in the county during peak tourism seasons.

“It used to be that Sandpoint was the more resort area, and up here it was more just residential,” Drake said. “But now we’re getting a lot more people who are travelling through the area.” 

Boundary’s house prices rise, but less than neighboring counties 

Since the Great Recession, rising mortgage rates nationwide have led to fewer homeowners willing to sell and leave their existing mortgages, also driving up home prices as Idaho’s population and demand have grown. 

Drake said locally, she has seen a decline in buyers seeking a mortgage. Instead, homebuyers will more often choose to outright buy a house or a parcel of land to build one. 

“2020 to 2022 is really when the housing cost was skyrocketing,” she said. “That’s when a lot of people from out of the area moved here with cash, so the market value shot up.” 

According to the county assessor’s database, older starter homes on streets in the South Hill area have a median appraised value of under $300,000. But the newer houses along the Kootenai River in the Marx Subdivision area have a median appraised value of over $400,000. 

Despite the increased size and value of new area homes, Boundary County has not seen the same inflation rate as other Idaho counties. 

“Home prices are at an all-time high, and they don’t show any sign of abating,” Wolkenhauer said. 

But the Balls have been dedicated to helping Boundary County maintain affordable housing since they made their first investment 22 years ago. Their efforts have contributed to a county whose housing market has outperformed its neighbors. 

“As a developer, I don’t want to leave this place and have people say, ‘He was greedy,’” Ball said. “We have a legacy on this planet and in this community. This is our home.”