Homeowners around Payette Lake who lease their land from the state of Idaho will see their rents climb dramatically beginning Jan. 1.
Proposed rents for 2008 released by the Idaho Department of Lands show lakefront parcels increasing by two-thirds, with the top rents hitting the $60,000 mark.
State-owned leases off the lakefront are lower in dollar figures, but the percentage increases set for 2008 soared from 200 percent to 400 percent, with the top rates exceeding $7,000 in several cases.
The lands department releases the proposed rents for the coming year each July. A total of 169 lots owned by the state around the lake are leased.
The leases on the state-owned lots, which are exempt from county property taxes, are expected to raise just over $3 million in 2008 for the state, said Mike Murphy chief of the department's surface and mineral resources bureau.
The leases on the lots are calculated on a flat rate of 2.5 percent of assessed valuation as determined by Valley County, Murphy said. Homes and other buildings on lots are not included in the state lease, but are assessed separately for property taxes by the county.
The Payette Lake lease sites were part of the general reassessment of Valley County property that saw values increase by 50 percent, to $6 billion this year. The county has since issued lower assessments on many of those properties, and the lease rates will be adjusted accordingly, Murphy said.
However, the initial proposal has shocked leaseholders, many of who have had their McCall homes in their families for decades.
"We can't afford this increase, the little bit we use the cabin," said Ron Hon of Boise, whose lease on his 100-foot wide lot on the west side of the lake is proposed to increase from $34,500 this year to $59,000 next year.
"We just can't afford it, they are driving all the Idaho people off the lake," said Hon, a retired building contractor who said the land has been leased by his family for 40 years.
The Hon house may have to be put up for sale, which would be a disappointment, he said. "The whole family's attached to it, but we just can't justify it any more," he said.
"Lease rates are so high that many families will be forced to leave properties that have been held for generations" said Chuck Hervey, president of the Payette Lake Cabin Owners Associations.
Hervey leases land away from the lakeshore, and his rent is proposed to increase 276 percent, from $1,600 to $5,900.
"Lessees want fairness from the State of Idaho," Hervey said. "We are not expecting special treatment but the current situation is beyond what is fair and reasonable."
The state needs to bring back stability to the leasing program, association board member Jim Young said.
"We need an exit formula for lessees that are being forced out and establish a stable market rent formula and terms for lessees willing to continue leasing their properties," Young said.
Proceeds from the state leases go into a state endowment fund dedicated to education and state institutions. Payette Lake rents are earmarked for endowments that benefit the state's public schools and State Hospital South, a mental-health facility in Blackfoot.
The state land board has appointed a subcommittee to study how to improve the cottage-site leasing program when current 10-year leases on Payette Lake as well as similar leases on Priest Lake in northern Idaho expire in two years.
"We are not unsympathetic" to the plight of the leaseholders who face large rent increases, said Idaho Secretary of State Ben Ysursa, who is a member of the subcommittee along with State Superintendent of Public Instruction Tom Luna.
"We are very cognizant we can't be heavy handed and work with those folks," Ysursa said.
Earlier this month, the land board voted to ask the 2008 Idaho Legislature to extend the 10-year lease terms, which are set by law, to 30 years.
This would make the homes on the state parcels easier to sell because the leases would match a typical 30-year mortgage, Ysursa said.
Lands department staffers also have proposed limiting lease rent increases to once every five years and tying the lease rates on Payette Lake to private appraised values, as is done at Priest Lake, rather than assessed values set by the county.
Those topics and others will be on the table when the subcommittee meets, Ysursa said. No date for the first meeting has been set.
However, rents are bound to only increase in the future, he said. Two new leases to be auctioned at Priest Lake will be rented at 5 percent of value, a level that is likely to be set for other cottage site leases, Ysursa said.
