A (Partial) Victory for the Self Storage Industry in Idaho

CJ Moore | March 20, 2012 @ 4:45 PM

Nearly two years ago, National Self Storage Association President Michael Scanlon raised a stink about a self storage facility in Boise, Idaho that the state purchased and set up as an endowment to support public schools. Scanlon wrote a letter to the state in November 2010 that the facility, Affordable Self Storage, had an unfair competitive advantage and the state should sell the facility. Earlier this month, Scanlon and the self storage industry were close to a victory, as the Idaho House approved a bill by a 66-3 vote that would force the state to sell Affordable Self Storage and prevent the purchase of other businesses. Even with overwhelming House support, the bill hit a dead end last Wednesday when it failed to pass through the Senate Resources Committee. According to the Associated Press, the Senate panel was flooded with pleas from school boards, the PTA and Idaho Education Association to reject the bill. Since the purchase of Affordable Self Storage in August 2010, it has become one of the endowment’s most successful assets, returning annual profits of about 8 percent. The argument from the Department of Lands director Tom Schulz, who oversees the properties, is that the businesses are run by third parties. "There are no state employees sitting out at any of our buildings," Schultz told the AP. "We pay for professional services to manage those assets." That doesn’t necessarily defeat the belief that Affordable Self Storage has an advantage over its competitors. “If I'm not paying property taxes and you are, who do you think is going to win the battle of price? That’s what it boils down to," Scanlon told the AP back in November 2010. “They've crossed the line, when they go into direct competition with the taxpaying base that supports government.” I put Scanlon’s theory to the test back in November of 2010.  To see if the pricing was similar to other Boise self storage businesses, I called Affordable Self Storage to find out some rates and compare them to the rates of facilities listed on StorageFront. At the time, Affordable Self Storage charged $32 per month for a 5-by-10; a nearby Boise facility charged $60 or $65. For a 13-by-44 unit, Affordable Self Storage charged $166; the largest unit offered in the area by a StorageFront customer was a 10-by-30 and that unit went for $139 per month. So Scanlon’s theory had some legitimacy. It obviously was controversial enough that a bill was introduced and nearly passed. It’s uncertain what will happen now that it has stalled in the Senate; however, the fact that it made it this far should discourage other states from similar acquisitions, and that's a win for the self storage industry.

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