Three Idaho Cities Pass Ballot Measures Dedicating Tax Revenues to Housing Initiatives

Voters in the Idaho cities of Hailey, Ketchum, and Sun Valley approved local ballot measures that will dedicate existing tourism tax revenues towards housing initiatives. The ballot measures, which passed in local elections on May 16, will collectively raise approximately $2 million for housing across the three cities. Voters in all three municipalities approved the ballot measures with overwhelming support (85% in Hailey, 76% in Ketchum, and 85% in Sun Valley), far surpassing the 60% supermajority threshold required for passage. The measures will take effect on July 1.

Idaho state law allows small resort cities to enact Local Option Taxes (LOT) that raise revenues to address the financial impacts of tourism. Hailey, Ketchum, and Sun Valley each have an original and a supplemental LOT, which apply to a different set of goods and services in each city: for example, Hailey’s supplemental LOT taxes car rentals and lodging, while Ketchum also taxes retail (excluding food, liquor, and building materials). Each city’s ballot measure asked whether to devote half of existing revenues from its 1% supplemental LOT to fund community or affordable housing initiatives. Currently, all revenues from the 1% tax are dedicated to supporting commercial air service. The passage of the ballot measures splits each city’s 1% supplemental LOT for air service into a 0.5% supplemental LOT for air service and a 0.5% supplemental LOT for housing.

“In Idaho, the LOT is the only meaningful mechanism available to local governments that need to raise funds,” said Carissa Connelly, housing director for the city of Ketchum. “The passage of this ballot means that we now have much needed recurrent funds to address the housing crisis, which we will do through using LOT to preserve housing for locals and leverage public land, partnerships, and other resources.”

Each municipality plans to take a different approach to allocating its new housing resources. The City of Hailey plans to conduct a public engagement process to determine what types of community housing projects to fund. Sun Valley Mayor Peter Hendricks indicated that his city would use the housing resources for four initiatives: an eight-unit project for first responders at a local fire station, conversion of a city-owned inn into affordable housing, housing assistance payments to qualifying city employees, and fuel subsidies for qualifying city employees with long-distance commutes. 

The City of Ketchum plans to place the housing funds in a designated account for community housing, which will enable the city to implement its first-ever Housing Action Plan. A recent analysis to inform the Housing Action Plan determined that Ketchum must develop, preserve, or convert between 660 and 980 homes for locals within the next decade. The city developed the Housing Action Plan as population growth skyrocketed during the pandemic and the community’s housing needs became more acute. Ketchum’s population grew by 25% during the first year of the pandemic, and many new residents were remote workers earning far higher wages than local workers. The population influx resulted in rising prices and displacement.

As city leaders recognized the need to address the problem, Ketchum brought in partners from other resort communities to discuss their solutions and recommendations and sought input from stakeholders and community members countywide. The city originally dedicated state and local fiscal relief funds to its housing initiatives, but these resources were only temporary, and city officials recognized the need for a permanent funding stream.

Ketchum initially attempted to generate new housing resources with a ballot measure in May 2022, but voters narrowly rejected that measure, which would have raised the LOT tax and invested supplemental revenues into workforce housing. Carissa Connelly, housing director for the city of Ketchum, noted that community members were not aware that the existing resources were dedicated to other activities, like public safety, and were insufficient to divert to housing even if that were an option. Over the past year, city officials focused on educating community members about the structure of the city budget, the need for more funds, and what housing programs could be funded. These educational efforts built momentum for the 2023 ballot measure, which redirects existing revenues into housing initiatives rather than raising taxes.

While city officials focused on education, citizen advocates launched the “Yes for Housing & Air” campaign, which collected endorsements and mobilized voters to support the supplemental LOT measures across all three cities. Wendy Jaquet, campaign coordinator for the citizens’ committee, described the committee’s organizing tactics that contributed to the measure’s success: “The key is having a citizen’s committee and being familiar with all the tools for running a campaign,” she said. The citizens’ committee was made up of three co-chairs (one for each municipality) and 13 members, including one member who had moved to the region recently and informed the committee’s outreach to new residents. To make information about the ballot measures accessible to the public, the committee created a website, worked with a technical writer to create easy-to-read campaign materials, and translated its materials into Spanish. Campaign volunteers tabled at post offices and grocery stores, gave presentations in public forums such as the local Botanical Garden, and canvassed door-to-door in Ketchum, where the vote was expected to be toughest. To get out the vote, the citizens’ committee sent postcards, hired a vendor to send text reminders, and launched a relational texting campaign, in which campaign volunteers personally reminded their own close contacts to vote.

The trio of successful ballot measures in Idaho indicates that housing is a winning issue at the ballot box, as previously demonstrated in the November 2022 midterm election cycle. Voters had the opportunity to weigh in on nearly 100 housing-related ballot measures in the midterm elections, leading to billions of dollars in new housing resources, groundbreaking tenant protections, and zoning changes to facilitate housing development.

Find a summary of ballot measures from the November 2022 midterms here.