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Ever Onward Podcast
The Ever Onward Podcast is your go-to business podcast, offering engaging discussions and diverse guests covering everything from business strategies to community issues. Join us at the executive table as we bring together industry leaders, experts, and visionaries for insightful conversations that go beyond the boardroom. Whether you're an entrepreneur or simply curious about business, our podcast provides a well-rounded experience, exploring a variety of topics that shape the business landscape and impact communities. Brought to you by Ahlquist.
Ever Onward Podcast
Idaho’s Housing Crisis: A Builder’s Perspective You Need to Hear - Steve Martinez | Ever Onward - Ep. 72
When Steve Martinez talks housing, people listen—and for good reason. With nearly three decades of experience and a front-row seat to the booms, busts, and battles shaping Idaho’s growth, the Tradewinds owner delivers an unfiltered look at what’s really driving the state’s housing crisis.
In this episode, Steve shares his personal journey from working in his father’s construction company to building a business that weathered the 2008 recession and continues to adapt to today’s pressures.
You’ll learn:
•Why Idaho’s rapid growth isn’t all good news—and what’s fueling it
•The shocking impact of a $1,000 home price increase on buyers
•Why starter homes are disappearing, and what needs to replace them
•How permits, regulations, and politics are slowing everything down
•The disconnect between anti-growth sentiment and the push for affordability
•Why labor shortages and policy decisions are hitting builders hard
•What industry leaders are watching now: interest rates, tariffs, and buyer behavior
If you care about where Idaho is headed—and who gets to live there—this is a must-listen conversation. Hit play for a candid, boots-on-the-ground perspective you won’t get from the headlines.
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Today on the Ever Onward podcast we have Steve Martinez. He's the president and owner of Tradewinds. It's a very great home builder here in Idaho. He's been in the construction industry for 27 years, 24 of those as owner of Tradewinds. Steve is also very involved in all things leadership here in the Valley along housing. He has just finished as the chairman of the Federal Government Affairs Committee for the National Home Builders Association. He spends a lot of time in Washington DC and in the statehouse affecting all things that are legislative around housing and home building in Idaho. It's going to be great to get caught up with him on all things housing in the Treasure Valley. Steve man, this is great. Hey, we're trying to catch up here. I know I've known you forever.
Speaker 2:We haven't seen each other for a long time.
Speaker 1:Well, we've been wanting to have you on for a while. You've been in the building industry a long time. I kind of was born into it. I didn't have a choice. Let's start there.
Speaker 2:Yeah, how's your dad? He's doing awesome. You know, it's kind of funny. I bought him out in 06 and he was retired for about 30 seconds and then he came back to work and, uh, you know, he would go long enough to where I'd get a call from my mom. She'd say, hey, you got to send him home. You're just working him to death, all right. So I'd send him home. That guy's built one way, though. Pretty soon she'd call and she'd say you got to get him out of the house, he's driving me nuts. Put him on a job site. And so it really was. He turned 79 this year. Is he 79?
Speaker 2:There's no way, yeah. And it really was about last year where he said all right, I need to get off the job. He's 79. He does not look 79.
Speaker 1:No, and doesn't act 79. Yeah, doesn't act 79. I mean, I don't know why I just didn't. I did not expect that. I expected like 70.
Speaker 2:Yeah, no, yeah, I mean he still goes a hundred miles an hour. How's your mom? She's doing awesome.
Speaker 1:They're doing great. Well, you've had. So talk a little. I do want to get into some other stuff, because I wanted to talk industry the housing industry the valley, all that stuff. But I do just background. Pretty cool to grow up with him and you getting right into it and then kind of buying him out early.
Speaker 2:I mean you've owned the company now for I was 26 when I bought him out, 26 when you bought him out I mean, you've owned the company now for I was 26 when I bought it, 26 when you bought it I don't know how many people especially in today's day and age of just looking at the youth and where they're at and that was pre-Great Recession, absolutely so, you know, at 27, that was 2006. So 2007, I was like man, I am king of the world, I'm going to do this five more years and I'm done. And then I got years and I'm done.
Speaker 1:And then, uh, I got my master's in building essentially in 2008, because it was four years of just grind. Is it for, like, steve, you're young, but like for guys that, uh, there's a lot of people that don't remember it right or don't talk about it, and for a lot of us that were went through it, it, it, it just feels like it wasn't that long ago in a lot of ways, and it feels like it didn't even happen in some ways.
Speaker 2:It's interesting Just this year my PTSD of 08 is slowly going away. And it's interesting because I remember I think it was in 08 or 09, my dad said this is the best thing that could have happened to you. And when you're going through it, all you want to do is slap the person that says that. And yet you know he started the company in 1980. So probably the second worst time to be in business. You know interest rates were crazy. I mean I remember we were taking trades for work. I mean he would come home with a motorcycle or a piano or you know a clock. I mean just he would bring stuff home and my mom would just shake her head like what are we doing? And and that's just, you just traded for work then. So, um, looking back, it absolutely was the best thing that could have happened to me at a young age, because I saw so many guys you tend to retirement, tend to plan.
Speaker 1:Once you go through it and I've tried to explain this it so bad and there were really just you'd like I don't, I don't know the way out of this thing. So much of it was not in your control, everything. And then you kind of figure out a pathway and you find your way through it. You're like I don't ever want that to happen again. So what do you find yourself doing? At least me everything we do is like okay, what's the worst thing that can happen? And sometimes drives people crazy. You're like well, that's not gonna happen.
Speaker 2:Yeah, you're like, yeah, no, the wave eventually crashes, and that was one thing. Um, and, and what's sad is it's kept me from a lot of opportunity, but it's also kept my neck off the chopping block. Yeah, when there's been corrections, and you know it, I always say that that was kind of a once-in-a-lif lifetime event.
Speaker 2:And yet covid, yeah, then was another once in a lifetime event and so these once in a lifetime events I'm kind of getting over like um, but I feel like I've run my business, like 2008 is around the corner, um but, and it's it's kept me so let's, let's talk.
Speaker 1:Uh well, I'm gonna jump a lot, a little bit all over here, but before we leave your dad, because I do want to get into, like, all the questions, because because it will be good for people listening to get the Steve Martinez experience of housing and where we're at and where we're headed and all those things. I think that's tremendously valuable. But before we leave your dad, incredible guy.
Speaker 2:I will tell you this Having him at the helm, whether it's in business um, in my personal life, I mean, that's really what has saved me. In business um, he was reigning me in in 06 and 07, you know, when I wanted to conquer the world, yeah, saying, you know, ease up, this doesn't last forever. You gotta, you know, take it in stride, um. And then in 08, when it was the, you know, the darkest hour in 09 and 10, 11, 12, he was right there alongside of me, coaching me through all that um, and I think that's in life, having a coach, um, having somebody on you know, next to you. There was a lot of people that didn't have that and, uh, you know, struggled alone. And not to, you know, make my experience any better or any worse, but having him attached at the hip couldn't have been a better situation.
Speaker 1:What are some of the qualities that make him he's a unique guy? What are some of the qualities that you admire in Ted?
Speaker 2:It's funny. He said never take a risk with your reputation. That is something that's always stuck with me. This town is so small and he was born and raised here. He came from very, very humble beginnings. You know my grandma worked the fields, as you know, from all across the country, from Michigan all the way to California. You know, depending on what was in season, the home that he grew up in, the home that we grew up in, I mean just very humble beginnings and I think that's always stuck with him.
Speaker 2:He's never gotten too big for his britches. You know he's always helping people To a fault where, as kids, we were always annoyed like dad quit doing that. You know enough. Or you know this person's driving us nuts. Why do you keep giving them a chance? You know he's probably started more businesses in this valley for people getting them on their feet. You know when guys go out on their own and teaching them how to run business and you know they may be a great framer but a terrible business person and so he's helped get them through that. So he's always, you know, quietly been helping people and I love it. It's something that, growing up that way as a kid, you don't appreciate it until you get to a point and you see how many people he's helped throughout the process.
Speaker 1:Thanks for sharing that. I think, doing this as long as we have now, I love hearing a little bit what's behind successful people, yeah, and usually there's someone that's super influential that has said hey, and when it's your father?
Speaker 2:it's even better, right? Well, and you and I have seen there are a lot of successful people in this valley and there are people you want to be like and there are definitely people you don't, yeah, and everywhere in between, and so that's, I think, the clientele that I work with. I get to see all types and I get to see the, the qualities of people that that you want to emulate, and I think that's that's my dad to a tee, yeah well, I wanted to hit that for sure with you today because he's made an impact on me, he's been a, he's been a great example and and and for you a legacy.
Speaker 1:yeah, absolutely. So let's get, let's get into it. So then we get through the valley here, if you go back to because I like, to me it's kind of this really important kind of date for me, like it happened and then you get to 12, and it's a little better Starting to crawl out.
Speaker 1:Starting to crawl out. Never really easy, though, for a while, because it took a while out. Never really easy, though, for a while, because it took a while. And then it seems like um, you know, then then the coasts are going nuts, yeah, like just going nuts. They've lost their minds. Well, I call I I joke.
Speaker 2:I say the cows are coming home. So california, oregon and washington, the cows are coming home. And that really was, and we've always had that migration. So it wasn't. This isn't a new thing, but it's almost like someone poured gas on the fire and it just exploded and it went from.
Speaker 1:Idaho Boise. To everywhere you went Like, oh, that's the place right. And then let's talk about why. Because I think for people, they want to shut it off now, which is an interesting concept. But if you look at why people are attracted to here, it's why we're attracted to here. It's an incredible place to raise your family. You look at the beauty, you look at the spring day we're in today. Absolutely there's just nothing. The outdoors things and how clean and safe, and the politics. Quality of life, the quality of life, it really.
Speaker 2:is it the politics, the?
Speaker 1:quality of life. I mean, it's just something with schools. Yeah, you start going down the list. It's a great place to come um, that that was discovered. I, I had to, for I, I I looked up something for for someone the other day and I just looked at home values of of homes and I was shocked like just blown away. Yeah, what happened and it was so it's probably like it was probably 13, 14, 15 away. Yeah, what happened and it was so it's probably like it was probably 13, 14 15, it still was probably okay and then it just took off.
Speaker 2:It did and and part of that it was supply and demand we were, we got caught flat-footed. Um, and I know that that the answer always seems build more, build more. But when you have a large amount of people coming into an area and I saw it actually in the recession in North Dakota when the oil got discovered not discovered, but when fracking became a big deal and everybody and their dog came into North Dakota, it just pushed all the local people out and it pushed pricing so high rent, so high cost of living. And I kind of joke, because I'm usually one of the first contacts of people coming into the state and they get here and they say, well, this isn't any cheaper than where I came from. Like, I thought I was getting a deal. And I have to explain to them that if you're coming here for the deal, that's probably not now, but there's 10,000 other reasons why you should be coming.
Speaker 2:And, um, I also have to kind of mellow people out where, um, they come in and they're, you know, coming for, let's say, political reasons and we're going to save, you know, the state from itself. And I say, well, relax, you know, and we're actually pretty middle of the road in idaho and and uh, it's interesting, I had a client one time that, uh, you know, sent me their ballot, their sample ballot, and marked who they thought that we would love to vote for. And I said, oh, we're in the weeds here. And they said what? No, we're saving you, we're helping. And I kind of explained it and she said well, you understand, coming from where we're coming from, you have to be goofy left or goofy right to hopefully end up in the middle. And I said Idaho's about as middle as it comes. I said we tend to ebb and flow on that line and so you don't have to get goofy right to save the state from itself.
Speaker 1:Yeah, you don't, and let's talk a little bit about that. You've become pretty politically involved, I mean nationally. You've been part of the national organizations. You've been one of the leaders of the home building industry here in the state. So I do want to dive a little deeper on that, because it's been an interesting. It sounds too easy to be supply and demand, but we did get caught flat footed, we really did. And then I would love to hear your perspective on okay, now jump forward another 10 years from that. We have COVID in the middle of that Right, which I think if COVID didn't happen or did happen, it was another wave of people that came in Because now you had COVID, I can live anywhere. Well, I'm reacting to COVID. So one issue.
Speaker 2:And so they said we got to get out of here no matter what. And so I think it brought in a wave of a different mentality to the state. We've had it so good for so long in Idaho that politically we've been on autopilot. Our candidates, our elected officials, haven't been goofy. I mean, we've probably always had goofy, but they haven't been far right far left just middle of the road. Common sense, business friendly, just business friendly, capitalism.
Speaker 1:Yeah, they realize small business friendly, small business friendly, and I think there's a difference there.
Speaker 2:And so we've had it too good too long. Realize small business, friendly small business yes, I think there's a difference there. Um, and so we've had it too good too long. And what I realized a few years back was that pretty soon we were getting hijacked at every level and I don't care, you know. For a while it was like, well, we're gonna just go after you know things that really affect us. And now it was like we got to be looking at school boards and we got to be looking I mean hoa, president's joking but like we got to look at across the spectrum because it really is. There's an anti-growth sentiment, there's uh, I mean, I'm surprised when I go to a city council meeting at how many people willingly say well, when I moved here last month, this isn't what I moved here for and we need to stop the growth. And it's like you can't stop the growth and if you stop the growth, all you do is raise the price.
Speaker 1:So let's, I want you to help me explain this. Because if you, if you spend time around the country and you look at communities that have kind of wrecked themselves, it is regulation that wrecks themselves Right 100% and that comes in weird ways because you have the kind of nimbyism that causes regulation. You have whatever reason overreach from government causing regulation. There's a lot of ways.
Speaker 2:Regulation comes, in different forms, right. It's death by a thousand cuts.
Speaker 1:Yes, so you have all these different things, trying to say I don't like this, I don't like this, I don't like that. And pretty soon you've narrowed down the free market system that provides options for people, which I wish people could understand. That just drives up costs.
Speaker 2:I I had this discussion with an elected official that was really going around the the county and and actually other counties to try to stop growth. And I met with this person. I said, hey, let's be part of the solution Instead of just no, close the border, lock the door. Let's figure out a way to make this work and take all the credit, bring everybody together. It's not about that, but let's find a way to find a path forward.
Speaker 2:And they said well, the problem is, all my constituents are coming to me and they're complaining about property taxes and their values are going up and their values are going up and we've got to slow this down. I said, okay, I get that component. But I said it's econ 101. It's not my major, so I'm not even going to pretend that I'm an econ major. But I said econ 101 says that we restrict the supply but we still have the demand. I said if they're mad this year? I said if you stop all building which they wouldn't, but if you stopped all building, where do you think prices are going to be in a year from now With the same amount of people coming in now? No local people will be able to buy and we will be 100 percent reliant on out ofstate people to come in and make this market work. So they didn't understand it, they didn't want to admit that.
Speaker 1:It's easier in a complex problem, whatever the problem is infrastructure, housing, homelessness Pick the big hairy ones that are just hard. Housing, homelessness pick, pick the big hairy ones that are just hard. It's easy to have like a you know the quick hey, just do this, just do that, fix that. It's this person's fault and it's never that easy. There's no silver bullet. There's no silver bullet and it's going to require a bunch of stuff Can you get into cause? One of the things I know you're you're very well versed in is it's also having lots of housing options.
Speaker 2:Correct, because talk a little bit about that. So a couple of things I advocate. I don't build affordable housing, and I'll be the first to say it Like nothing of the caliber of home that we build is affordable. And yet I am out advocating on behalf of affordable housing at every level and I get really annoyed when I get labeled a special interest in certain settings because special interest is getting something that I benefit from. I don't benefit from more affordable housing.
Speaker 2:I testified in front of Congress and been grilled on that. I've testified at the state level with the legislature on this. I also think we have to educate people that their first time home you and I's first time home was, you know, quarter acre lot, white picket fence, a dog and a single family. I think what we're trying to tell people now and re-educate people is that first time home may be a condo, it may be a townhome, it may be, you know, a different product. We have to have a multitude of products now because that product that you and I had as the first-time home doesn't exist at the price point that we can afford and let's talk about.
Speaker 1:There's lots of factors that have made that true Price of land has gone. I mean through the roof is one thing, supply chain chain I mean those things never like they loosened up, but the price never go backwards, they never, never go back so people don't understand like, yeah, there was the supply chain crunch, and they're like, oh, is it better?
Speaker 2:yeah, it's better, but the pricing never changed, right and an economist will tell you you don't want it to go down because that's deflation and that's a negative impact to the economy. So we all want gas to go down, we all want health care pricing to go down, but we don't want whatever we do for a living to go down, and so I think we have to be a little careful. The goal is to stay at a constant growth and not like we've had in the last.
Speaker 1:But when that supply chain thing happened, that did happen and there was times where you couldn't get wire.
Speaker 2:Throw a dart, you couldn't get switch dirt, throw a dart and you'll hit it, no matter what. You couldn't get it.
Speaker 1:But it seems to be better now. But pricing stayed there and then you've got labor Correct and you've got a retiring skilled labor. Electricians, plumbers, hvac skilled tradesmen, of all trades are retiring just because of demographics. It has nothing to do with it's just pure demographics.
Speaker 2:They're aging out. The hard part is so. The Great Recession took a huge segment of the working population that was either close to retirement that just said, hey, this is dumb, why am I doing this, I'm losing money, I'm out. It also took the bottom segment. So I grew up framing houses in high school, all through college. It took away the segment that would have come into the market at in high school or in college or at that age that there just weren't the jobs. And so now, all of a sudden, you've got two missing segments of the labor market. Now, fast forward 10 years, 20 years. All of a sudden we're starting to see that segment. And for everybody that is retiring now, we don't you know, let's say, for you know 20 people that are retiring today and I don't know the numbers off the head we have like four people replacing them I think that's very similar to what I've heard.
Speaker 1:Yeah, so you see. So so all those factors land, cost of building materials and labor are are not. That's not changing anytime soon here. So now you say, okay, well, what is the product type?
Speaker 2:it's going to need to be absolutely a very varying type of product and, sadly, and this is what most people don't want to hear you need density. Yes, to get there, have to, you have to get density and and so then let's talk about that.
Speaker 1:so, so multi-family. I I do know like I've heard like just wild swings in city councils around the valley of hey, we have enough. And then you talk to someone like clay anderson who's a multifamily expert, he's like dude, that's not. Yeah, we're about 10,000 units behind in the valley. So just multifamily. So apartments, let's keep it, just apartments in the valley. We're 10,000 behind and because of the interest rate spike that just happened, everything froze. So what happened is there was kind of a lot of apartments and then you saw some concessions, you saw rents coming down and now that's going back up, but there have not been any new starts because of just the way they start and municipalities talk the talk.
Speaker 2:So when I meet with the municipality, my question is the heck with affordable housing, the heck with attainable housing? Two different numbers, the heck with. Can your own employees afford to live in your city? And the answer, most of the time is no. And so I bring that up because I think there's a negative connotation with affordable housing. There's actually zero studies, zero studies that have shown that when an affordable project comes in, that there's a negative impact to a community. There's a mental side of things. So can we?
Speaker 1:talk a little bit more about that, because I think this is one of the main reasons I'm really excited to have you on. So you've got market rate apartments. We're 10,000 short on. Now. Well, let's talk about the different kinds of affordable housing. So there are just programs out there which will allow some subsidy correct to go into and and and one of the guys we got him on here, but caleb rupe with pacific company is probably the largest in the yeah yeah, like largest in the united states of america out of eagle, idaho.
Speaker 1:Yeah, who's done a lot of this stuff here? But but those, you look at the projects he's done here. They're some of the nicest quality projects ever and no one here is saying that that diminished the quality of the neighborhood or anything. It just gives options for people and it's using mostly tax credits is what it is, and these companies like Caleb's are just experts at saying, hey, it's a community. It's certainly like it's part of his DNA of saying hey.
Speaker 1:I am doing this because one, it's good for people, it's good for communities and it's a niche that he's filled. So you got those. So you got this kind of housing, the apartments, and then let's talk about you got condos. There's a lot of challenge with condos. We're doing a big project right now downtown, so people don't realize this. They're like why don't we have more condo options? Well, what happened was there was a lot of condos that were built and then they found attorneys found out. Well, with a condo unit, there's just fraught with potential problems because you've got all these units that people own next to other units people own.
Speaker 2:So potential problems because you got all these units that people own next to other units people own, so they literally the legality of a condo. It would blow your mind. People don't understand that and it's state by state and as a contractor. Yes, I just was with a tile contractor out of oregon.
Speaker 1:He said we are in a lawsuit 24 7 on condo projects and so there are law firms in the country who, literally the second you do a condo project will sue, you file. Yeah, they'll file a lawsuit even though you don't have anything yet, because they know that they can go through this and find their. You know, there's something. There's ambulance chasers and in medicine there are attorneys that chase condo projects. So it's why we don't have a lot of them. We're doing doing one. There's 69 units in downtown building. You get insurance for it.
Speaker 2:It's quadruple what insurance would be if it was multifamily. But you just raise the cost of everything.
Speaker 1:You raise the cost of everything for condos, but they do provide, I think, our units in downtown. It provides density. You think about single family homes and what they cost in that end of town, correct?
Speaker 2:I mean, you could never own a single family home for that.
Speaker 1:And now, you're in a highly amenitized building in a great neighborhood. That's going to be. It's still not affordable.
Speaker 2:Correct. I'm really careful when I say that because I think that affordable to you and I and somebody else, it's all different.
Speaker 1:I think what you could say is a segment of the population will be able to buy them. Correct, they're not affordable, but they're less money than a single-family home, correct, so that's, and they're in a part of town that you couldn't get otherwise, and it's right. Next, by the way, st Luke's is spending a billion dollars on their expansion. And you've got Now we're going to talk about this later too You've got infrastructure issues, correct, because now, if you're living in Middleton to work at St Luke's downtown or you're living in Cunigal, I mean, it provides some options for and they've got a range of employees, all the way from physicians, mid-levels nurses top to bottom and it provides some housing options.
Speaker 1:So then you go to townhomes. I do think townhomes, or starter homes, that's going to be a segment of the market. Now here's the interesting thing starter homes.
Speaker 2:That's going to be a segment of the market. Now here's the interesting thing. So I could do. I did a project in downtown Boise that was townhomes and I did the exact exact same building in Meridian. That was apartments. And here's the difference the townhomes have, and you know this, but for anybody listening, a townhome has an individual lot line. Now if I go to a jurisdiction to do a, if I'm looking at path of least resistance, if I'm looking at the time value of money, if I'm looking at the uncertainty with tariffs and labor and all the price increases, I'm going to go the path of least resistance, which is apartments, which doesn't allow for home ownership. Because if I have to go into a project and individually put a lot line on that subdivide that same piece of property, that I could just put the same building, same units.
Speaker 1:So it's a great example, where, where policy at the city level will drive behavior. It's the barrier. If they could make it, and then they would realize that that same person could now be getting equity in a hundred percent. So so there needs to be, and instead you get the opposite. I think what's happened and I like. I like our jurisdictions. But if you go back to regulation 10, 20 years ago, regulation now we're headed the wrong direction.
Speaker 2:And and and here's the funny thing I'm not that old. I mean, I've been doing this my whole life, but I'm not 80 years old, I'm not 79 years old and can talk about the good old days. I used to be able to walk in to Boise with a set of plans, sit with a planner for an hour and walk out with a permit Same date. I don't want to tell you how much time it takes. Now let's talk about it.
Speaker 1:I think this is important because it is part of the problem.
Speaker 2:Absolutely so. Now that same permit can take two to three months Minimum. You add a layer of hillside or in an overlay district or something, a historical district. It's months and months of uncertainty. It's months and months of uncertainty and the checklist to get an approval now is so high, is so long, and all that gets passed on. It gets passed on and I've sat in so many meetings where people say it's only $200 or it's only this. I'm like you're right, but I've had 100 meetings of it's only $200. And so and I get you know government says well, that's not going to be the tipping point. That's not going to well in this Valley. We've done a study for every thousand dollars you raise the price of a house, 900 people can no longer afford it. It doesn't mean there's 900 buyers just sitting waiting to buy. It just means that, based on the median income, that they can no longer afford that home. So that's $1,000. Do you?
Speaker 1:think this is across the whole valley because that's where we work. But do you think that? And I think that for the most part we have local governments that are in tune with business. But I would ask the next question um, do you think they realize how different it is and how onerous it is? And there's been some crazy things. Building code keeps the other thing, some of it's, out of their control, so there's several factors against us. You have building codes, international building codes, so these things change and then the cities, different cities, adopt different, different versions yeah, um, and when that happens, crazy things happen.
Speaker 2:The hard part is that even when you come with a common sense approach. So I'm going to back up for a minute on just getting an approval on an apartment or a townhome project. I've brought up and it's not a new idea, it's not my idea, but I brought up the fact that, hey, if I add an affordable component to this project, put it at the top of the stack, guarantee me approval in 90 days and I'll do more of these. The last project I did, downtown Boise, took me three years for 30 units. When I started the project it was 44 units. Got weeded down to 30 units, increased the amenities and then at my final hearing, a councilwoman asked me so how many of these units are gonna be affordable? I said, well, it's three years. Prices have done this, interest rates have done this, my amenities went up, you reduced my density. You cost me over $5 million in the project. Zero units will be affordable.
Speaker 1:But does that connect? Do you think there's?
Speaker 2:That's where I say they walk the walk.
Speaker 1:I think they walk. I wish that Because it's going to be a problem. One of the reasons that I really want to have you on is you. You, every single person I talk to now about almost anything. Pick the issue it's housing.
Speaker 2:And the beauty is it's at the national level, it's national state level, it's at the local level, and the hotter we get, the more micron does with all this.
Speaker 1:I mean this is this is not shutting off. No matter what they say, that's not shutting off and no matter what they legislate at the local or state level. People are coming here and it's only going to drive up prices. What really needs to happen but I have no idea how you do this is how do you go and convincingly say let's have a valley-wide kind of plan, because the hard part is it's at the local level is where it starts.
Speaker 2:There's only so much at the federal level. And to your point on codes and some of those things, we're fighting that fight the local level is where most land use decisions come from and that's where the layers get tacked on. Right now, with the legislature, we're getting a working group together, very political though Idaho the problem is I always joke the problem with Idaho is it's very conservative. The great problem with Idaho is it's very conservative. The great thing with Idaho is it's very conservative. And so, getting everybody together, having to your point a valley-wide conversation, checking your ego at the door and coming in with real-life solutions, our frustration, my frustration, is I'm usually pushed aside. It's like wait a minute, you want to talk housing? I actually met with the white house about a year ago and and uh, they said hey, housing's an issue, we're bringing it up to the state of the union. Um, we, we, we want to address this, we want to get this taken care of. We, actually we, the experts, the white house think that in order to get housing more affordable, we need to use more union labor and be building more energy efficient homes. I, my hand shot up, I, I, I couldn't let that comment go and I thought that's your, your solve to housing affordability. Um, you, you pushed us aside and you got your experts together and that's what you came up with. And that happens at all local, state, national. Um, you're pushing the experts aside, the free experts, the guys that are willing to show up and give you free expert analysis.
Speaker 2:I build roads for a living. I know how to get it more affordable. I build projects. I want better infrastructure. No one wants crappy schools and a sewer or water plant that's at capacity. That doesn't bode well for a project. Invite the people that do this all day, every day, into the room.
Speaker 1:But there almost seems to be. I don't think it's malintent, I think it's misunderstanding for sure. And then I think, when you're in government, even if you came from private sector, I think you're hearing, you're in that echo chamber 100, we're here to fix things. We're here to fix things and I think, instead of well, in medicine, it's do no harm, right right one of the hypocritical it's like right there yeah, first do no harm, because there are things you can do that are actually worse than the thing.
Speaker 1:And I think for government I wish they had the same thing on their wall. It's like first do no harm, get outside of your people and ask people hey, what should we do? Because we've got a problem? We've got a problem and if you look at listen, I mean we do commercial, right, we do a little bit of residential, but it is getting hard.
Speaker 2:One example of that, tommy, is that we had the legislature passed a bill 389, I think it was last year, year before to limit how much local cities could collect through taxes, property taxes. What they did was they artificially raised the cost of of on all these small cities it's for a big city like Boise, meridian, that grows at a pretty constant rate they weren't hitting that cap. But for star, for Middleton, for CUNA, these cities that are seeing the rapid growth, and they capped it. So now, city of star, for instance, I just pulled a permit. It was almost $20,000. You think they did that rapid growth and they capped it. So now, city of star, for instance, I just pulled a permit. It was almost twenty thousand dollars. You think they did that on purpose?
Speaker 1:well, because here's the deal, like if you've got constituents saying, hey, stop growth, stop growth. I don't.
Speaker 1:I don't know the answer to this question, because one of the ways you could stop growth, yeah there's always an underlying yeah if you make it so expensive, yeah if you truly screw it up so bad that a building permit and star is twenty thousand dollars and and it costs you know our median prices for our homes just keep going, and going, and going, like there is probably a point. What I don't understand about that is these same people. I can't believe they have families here. They're your neighbors, these are local people.
Speaker 2:They're local people. You're like trying to get you not want to have your kids live here.
Speaker 1:Do you want to not have? Because the answer is always going to be free market. The answer is going to be we need everything. Right, we just went through them we need we need affordable housing units, we need multi-family, we need townhomes, we need condos, we need single family starter homes, we need medium range homes. We need the whole thing to make this thing work and most of the time, I feel like we're we're battling against a wave that that people don't under, and I think we're, I don't know.
Speaker 2:And here's the problem is that we don't have like an organized first time homeowners group, meaning that when, um, once, you buy the house and you're in it, I don't want to say you don't care anymore. But you don't care anymore, You've made your purchase. So there's not like a you know torches and pitchfork group out there. That's advocate, there are some, but there's not an organized group. Once I have my piece, I don't want anybody else to have it. That's actually a really good point. Group Once I have my piece, I don't want anybody else to have it. That's actually a really good point. And so I think there's a concession of how do we slow growth down until it affects you? But then once your kids have their house, then you don't care anymore.
Speaker 1:It's a really good point.
Speaker 2:And if you have it, then you go to the, you go to the meeting and say I don't want any more and I've seen this at so many city council meetings the things that if you're ever really bored and you want to watch paint dry, go to a city council meeting and watch the comments.
Speaker 1:Well, like our worst one was when we got our downtown building approved. Like the sheer hypocrisy, oh.
Speaker 2:I was shocked, like the sheer hypocrisy of the testimony.
Speaker 1:And then the interesting thing, the first time we went through it was multifamily of the testimony. And then, the interesting thing, the first time we went through it was multi-family okay. And and we've got. We went back and did deep dives on all the people that testified yeah and like look, you know, they're all millionaires living next door.
Speaker 1:And their whole thing was hey, we don't want these apartment people in our neighborhood. Okay, so then we convert it to condos, drop the number of units. Those same people come, come back and say, no, we wanted a. So it's all lies veiled in this.
Speaker 2:Hey, I'm here, for I had a gal tell us and it was on public testimony I should go get the recording. But she said I don't want our kids playing with those kids. And I was just floored and my planner you know I'm like about to blow up and she's like sit down, sit down. And I said I can't. I said I have to address that comment and so I got up and it wasn't meant to be rude, but I said the average price of these projects will be way more than a house across your street. So I'm sure they don't want their kids playing with your kids, but the point is, they'll say anything they can.
Speaker 2:Yeah, I couldn't even believe that that was a. It was just hateful it was. I get that you're worried about property value. I get kind of the typical conversations out there.
Speaker 1:But no one complains when their value goes up because of the product product and they are able to now sell their home and make more money. Before this has been great, but but the other thing? So you hear two things and and they're in conflict with each other you hear everybody legislators, local people talking about property taxes. Everyone like, yeah, what are we gonna do? What are we gonna do? And you have everyone talk about affordability of housing. Yet at the same time, you have many of those same people supporting and not standing up for the restrictions, the process, when it's so obviously the answer, and I think, when you're in those elected positions, maybe the heat I don't know what like. Is it the heat of the NIMBY-ism? Is it the? I mean why? I don't think that they under.
Speaker 2:I mean it seems clear To you and I, because we deal with it all day.
Speaker 1:But politically, what I'm trying to say is politically, though, couldn't you say, if you were the mayor hey, I'm doing this because I'm trying to bring property taxes down, and I'm doing this because I'm trying to make it affordable for your kids and their kids to be here. That seems super compelling.
Speaker 2:You have two arguing comments or conversations here. You have price of homes and you have property taxes and you're trying to balance the two right. And then you throw in the third of growth and everybody's complaining about growth. And really in Idaho the complaints growth. And and everybody's complaining about growth, um, and really in idaho the complaints traffic and schools. No one complains about this building, the services, the extra costco that comes in the costa vida, that no one complains about. No one. Yeah, I'm but but the point is fewer people?
Speaker 2:yeah, but the point is it used to take me five minutes to get there, now it takes me six and I've lost it right. Or the school problem, which is a state problem, not a local. It ends up being a local problem, but it's a you know. So there's a lot to unpack there. So are you trying to slow growth down by making it more expensive? But then, by making it more expensive, you get higher property taxes and no one can afford to live in your city. I mean it's, it's the pendulum swings, and so what's the priority? Is it? Is it affordability?
Speaker 1:or is it anti-growth? The last thing I want, I think, really cause I know you think this way, um, so I know you do polling and I know you do research, cause I think, with your national organizations, I mean, instead of letting like subjective feelings of, well, this is what I feel, this is what I do, it it would be so good to objectively look at a lot of things like like how short are we and where are we short?
Speaker 2:and this idea of infill, right yeah I laugh.
Speaker 1:I laugh so hard sometimes because I will be talking to really good people in Boise about some projects just on the periphery of Boise and they're like we hate sprawl and I'm like, hey, I know you probably don't go past 16th Street ever, Right, right.
Speaker 2:We all love the Nubbubble.
Speaker 1:I know there's this thing past 16th Street that's called Meridian and Nampa and Caldwell.
Speaker 2:No, that's Eastern Ontario, it is. But that sprawl, yeah yeah, and yet the infill is so hard. Oh, it's just brutal. The project that took me three years. It was on two acres, Vista and Overland Like the prime on thebench great spot Utilities there infrastructure there, community center, bus stops, like all the things.
Speaker 2:And yet in three years I could have done 20 projects in Meridian at 100 acres. But why don't they listen? We've even provided the stats. So to your point, not just the fields. We've even provided the stats. So to your point, not just the fields that you know. We said, hey, what is the true impact of housing from a cost perspective, from a community perspective? What does it contribute to the economy, not only in the first year it's built, but then when you have a family living in it, the ripple effect how many people are working in you know for that home or on that home, and the ripple effect is gigantic. I'll get you in, you know for that home or on that home, and the ripple effect is gigantic. I'll get you a copy of that study. We do it, we did. We actually did it, um, in like 2006 or seven when things were gangbusters, and we did it in the recession to show the contrast when there was, when there was crazy growth and no growth, um, and then I think we updated that in 16 or 18.
Speaker 1:I'm going to switch just because I can't believe we've been going at this for long we have. Can you talk a little bit on? On the tariffs a little bit, although I think that changes day to day because I don't know how much of it is going to impact or not, and then, and then, kind of what if I, if I made you predict, kind of which, Steve?
Speaker 2:just to let you know it's impossible.
Speaker 1:What are you thinking with interest rates, specifically on housing tariffs, how they're going to affect pricing workforce? I mean, there's just so many different things. But what does 2025 look like? The rest of this year and going into 26 for your predictions?
Speaker 2:So the tariff discussion is one that I actually think has zero to do with tariffs Zero. I think it's a tool. It's a negotiating tool that you and I are getting caught in the middle of right, and I think it is to your point. It changes daily. I was just on a call a few minutes ago I can't remember Liberation Day or something that you know when we came out and liberated everybody from their equity in the market is what I call it. But when they announced all the tariffs, they actually came out a few days later and excluded Canada and Mexico on a few things, and that's where a majority of the things that we use in building come from.
Speaker 2:If we are bringing it from out of the country, china is mostly components, but um, lumber is the one that is kind of the poster child for when you want to talk tariffs, the tariff discussion.
Speaker 2:Though, even though some of those things are excluded in my business, your business, we have to plan for them. No matter what business doesn't do well with uncertainty. I can't get into a contract with a client um at price X when I when it could be price Y or price Z or wherever Um, and so I have to plan for those. So I build it into my pricing, which we all then pay for Um and and a good example. So in it, when COVID was going you know it was hot off the press and going crazy for a piece, a four by eight sheet of plywood it's OSB, but four by eight sheet of plywood that we use on the entire house we were paying about seven dollars a sheet right before COVID hit. When COVID hit we were paying 80 to 90 dollars for that same sheet. I remember those days I didn't know it was that bad for that same sheet.
Speaker 1:I remember those days.
Speaker 2:I had one house that we were building that I had to go to the client and say you owe us an extra $250,000 for lumber, not for a pool, not for a cool countertop or any upgrade for the same thing. No one's going to walk into your house and notice any difference, and so my fear with the tariff thing is that we can't get caught. You know we got caught flat-footed with covid. We can't get caught. So I have to build that into the model my things are gonna, even with the threat even with just uncertainty it's going to cost more, so everything with suppliers.
Speaker 1:Everything I'm bidding out right now it's just going to be more, whether or not they are whether it hits or not they're building it into all of all our subs correct.
Speaker 2:So there's affordability and and we really push that with this white house that you made housing a priority and you've brought it up several times. But this goes in the face of that and and I think that's the canada, mexico thing why it was excluded. But my suppliers are already planning for it, so they've already adjusted their pricing, they built it into the pricing model, whether it happens or not. So that's the tariff component. Then you have the immigration component and this one's really frustrating and it's near and dear to my heart because I see it every single day with my subs, my suppliers, with the workforce that we have in in this valley that is highly reliant on that. About 30% of the labor in construction is non-born workforce in this country. My frustration with this is that it's a problem that the federal government created and now we're vilifying an entire group. I always say there's 1% of anything that's bad, 1% of doctors, 1% of builders, 1% of immigrants, 1% of throw a dart and we're using that as the reason to go after an entire group of people and it's really frustrating. We've made this group out to be the boogeyman on something that they're not.
Speaker 2:I have guys coming to me saying, hey, I won't even send my people to this jurisdiction or this jurisdiction because there's the threat of being picked up. Now talk about labor shortage. We already have a labor shortage. We don't have people coming into the trades and now we're restricting the labor in certain markets. We also always kind of point to like the bottom of the barrel oh, that's the cheap labor and they're taking people's jobs. It's not true. I have guys that I know that are their companies making six to $10 million a year here illegally working with an immigration attorney. But job creators making great money, paying taxes, paying into a system they will never get a benefit from not complaining here for quality of life, building a family, sending their kids to college. So I think there's this poster child of what immigrant labor looks like. And it's not just the dairymen's, it's not just ag, it's not just the wine growers or restaurant and hotel business, it's not just construction, it's business owners it's families and again drives up costs drives up costs rates.
Speaker 2:So rates is an interesting one. Um, I had the opportunity to meet with chair pal last year and it was just me and about 10 other guys and we met with five of the board of governors along with him and we had this conversation and, uh, really interesting meeting. They were looking at a lot of different. You know shelter inflation, not just inflation. You know that that inflation target is trying to get around two to three percent. Oddly enough, if you take shelter inflation out of that and this is getting into the weeds a little bit but we're're at the 2% to 3%. The only way in my mind and I'm not an economist and definitely not the Fed, but the only way in my mind to get shelter inflation down is to add more units. The only way to add more units is to lower rates.
Speaker 2:Initially, when you lower rates, there's going to be more activity and it's going to raise prices. But I see in the long term there's the spike right the curve, and then I think it levels back out. When rates come down, you will see a flood of homes coming back on the market. You're stuck with a 3% interest rate not stuck, but you've got a 3% interest rate. No way you're selling your house, but you start getting rates and I don't think we'll ever see that again. But you start getting rates and I don't think we'll ever see that again. But you start getting rates in the fives and high fours and all of a sudden, yeah, it'll move again. Okay well, maybe I will sell my house because I've been wanting to.
Speaker 1:So you're thinking that there's a lot of pressure to get this down.
Speaker 2:There is, and I think that's the tariff thing, I think that's the. I mean, I think all of these things Trump's no dummy. Well, we're renegotiating, I think, $9 trillion of US debt at the same time, right Correct Plus we have a tax cliff coming up that I don't think anybody's willing to talk about, but that's a $4 to $6 trillion cliff. We're coming up just to extend, not increase, any tax savings but to extend the Trump tax cuts.
Speaker 1:Oh, Steve, we need to have you back again.
Speaker 2:This went by so fast.
Speaker 1:Hey, before we kind of, what's your website so I can send people?
Speaker 2:your way. So it's TradeWinsOfIdahocom. We didn't really talk about your core business, tradewinsofidahocom.
Speaker 1:Steve builds unbelievable homes here. Thank you, some of the most amazing homes that you'll see in Idaho, and you've done it for 20?.
Speaker 2:So I 06, so 22 or 18 years yeah.
Speaker 1:As the owner of Tradewinds. Well, hey, thank you for your leadership in Idaho. You're involved in so many things and this has been great.
Speaker 2:Thanks for having me.
Speaker 1:I appreciate it. It's a great, great topic and so timely for what we need to be thinking about and looking at for the Valley. So thanks for coming on, absolutely.
Speaker 2:Appreciate it, thanks everybody.