Allowing more homes to be built on less land to reduce costs is the objective of Idaho Senate Bill 1352 that was passed in July.

SB1352 requires homes to be permitted on lots at 1,500 square feet, but only in cities with 10,000 people or more.

“Hopefully, what it does is it unlocks more of those starter homes, those smaller homes for people that are at the lower end of the market,” Post Falls Community Development Director Bob Seale said. “There are not very many homes available to the median household income in the region.”

One group already working with smaller lot sizes is the Panhandle Affordable Housing Alliance, which was instrumental in the Miracle on Britton development in Post Falls. 

Miracle on Britton aims to provide a real-world blueprint for making starter homes affordable for middle-income families. The community has built or is building 28 homes since 2024 on plots roughly 5,000 square feet. The median lot size for a new single-family home is 8,506 square feet, according to the National Association of Home Builders.

“Post Falls is a shining example of a city that has embraced it,” PAHA Executive Director Maggie Lyons said. “I mean, they already have smaller lots in their zoning. So, for them, it's not a thing that bothers them.”

Homes are priced below market and, through a resale formula, will never price to market, ensuring middle-income households can access homeownership every time the home sells.

“Area median income in Kootenai County is $100,000 and we did 80% AMI, so $80,000 income then up to $120,000 in income, so that's who these homes are designated,” Lyons said. “When these homes resell, the only constraint for when they sell is that a household with that designated income is who goes into that house. So over time, it builds a perpetual inventory.”

So far, the experiment has worked. 

Homebuyers at Miracle on Britton range in age from 22 to 34, much lower than the median age of 40 for first-time homebuyers. Another similar community in Post Falls is The Arc, with houses on lots around 2,400 square feet. The buyers of these homes fall into the same age range. 

“In Post Falls, we've been pursuing allowing for smaller lot sizes for the better part of eight or 10 years,” Seale said. “It made it available or attainable to a group of individuals who, prior to that, didn't really have the option to buy.”

According to the Coeur d'Alene Regional Realtors, the median sales price in Kootenai County is $565,000. Median home prices in other counties as of July: Shoshone, $314,750; Bonner, $522,450; Benewah, $330,000; and Boundary, $402,500. 

One of the most common misconceptions is that the bill eliminates local governments' authority, but that assumption is false, according to real estate attorney Peter J. Smith IV.

“The statute limits a city’s ability to impose local regulations that conflict with the Legislature’s decision to permit qualifying starter home subdivisions,” Smith said in a statement. “Cities will continue to regulate street design, utilities, drainage, fire access, public infrastructure, building codes and health safety standards.”

Lyons said smaller developments will not increase traffic.

“The further you push workers out, the more traffic you've got on your roads, it’s that simple,” Lyons said. “They're commuting, causing traffic, because the jobs are here. They have to live in Athol, or they have to live over in Shoshone County, or they have to live over in Liberty Lake.”

Other opponents have moved to Idaho from areas which didn’t handle growth well and are imputing their prior experience here. They feel the new developments will take away from the small-town charm.

“Didn't you have kids that wanted to buy a house? Don't you have grandkids that are probably getting to that age?” Lyons asked. “If you drive your families out, you're not going to have a supporting community that is vibrant.”

She said for many people, the “American Dream” of home ownership has felt fleeting. SB1352 and its supporters are working to change that.

“They thought they were going to have to leave, and they didn't want to because their families are here,” Lyons said. “I love to call this the starter home revival. Everybody ends up having hope again.”

    Lyons