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Housing Panel Wows League Member Audience

At the fall member meeting, three panelists talked about the housing crisis from three very different perspectives.

Cynthia Stewart, Issue Chair of the Housing and Homeless group of LWV Washington, explained that housing is a national, state, and local problem, and dealing with it locally is almost impossible.

There are two issues:  supply and affordability; i.e., it is affordable when it costs less than 30% of a family’s income. 

Nationally there are only 36 housing units for every 100 very low-income households. Population growth in Washington is exceeding the availability of new housing.  Rental markets are tight—more higher income people are staying in the rental market, and nationally there has been an increase in corporate ownership of single-family homes, which tends to result in higher rents. Cynthia provided some statistics on the average rental rates in Whatcom County, the income required to afford those rates, and a sample of some local salaries. 

In Washington the median home price is $522,000, and only 28% of households can afford that price.  The cost of construction is a major problem right now. One of the solutions is described as the “missing middle”:  duplexes, triplexes, and townhomes with a lower price per square foot but a higher density.  This is what the State Legislature is focusing on right now.

For the chronically homeless, including those who have mental health or substance abuse issues, it is necessary in many cases to provide fully subsidized permanent supportive housing.  These types of housing tend to be resisted by neighbors (NIMBYism), as are proposals to increase density.

The state League is advocating for increased funding for affordable housing.  Local League members can support LWVWA’s legislative agenda and also monitor their local comprehensive plan update, due in 2025. They can advocate for increased density, transit-oriented development, and educate the community about the need for change. 

Next, Mollie Janicki, who manages finance and marketing for The RJ Group, talked about some of the challenges faced by local developers.  One of their current projects is Alpen Grove, a townhouse community on undeveloped land north of Costco with two- to four-bedroom homes from 1306 to 2111 sq. ft.  Even though this is a high-density development, Mollie showed how the developer’s costs can range from $450,000 to almost $500,000 per unit.  Then the banks will determine an appraised value and require the developer to sell at that amount.

The permitting process may take 18-24 months, which is about how long it takes to get loans to build the project.  So, it takes almost two years from starting the project to getting the product on the market, and in the meantime, there are expenses that have to be paid.

An apartment complex costs just under $200,000 per unit, including the land; about 450-575 sq. ft. (studio).  The banks will require that rental rates hit a certain margin in order to qualify for the loan to build the building.

Sometimes if an attempt is made to include non-profits subsidizing affordable housing, it’s a “red flag” to the banks, making it more difficult to get private financing.

Blake Lyon, City of Bellingham Planning and Community Development Director, explained that 70% of Bellingham is dedicated to single-family residential, supporting 50% of the city’s housing units, which has an impact on where growth can occur.  A chart of the number of residential units permitted over the last 20 years shows a huge drop between 2008 and 2012, with a low of 72 units in one year.  Last year 1,286 residential units were permitted, of which more than 80% were multi-family units.  Even so, we still haven’t caught up with demand.  The vacancy rate for rentals is a very low 1.9%, influenced in part by university students and a strong proliferation of short-term vacation rentals.

Blake showed some images of alternative kinds of housing that are both attractive and more dense than we find in traditional single-family neighborhoods.  Other images showed alternative construction options, such as using shipping containers or 3-D printed homes.

There are a variety of factors in the shortage of housing, such as supply chain issues, cost of building materials, land availability, labor shortages and a complex regulatory environment, not to mention issues mentioned earlier regarding financing and neighborhood concerns.

The city is trying to address some of these issues with urban villages, the Infill Toolkit, and other strategies. They have access to funds for a variety of housing types and work with a wide range of partners, such as the Opportunity Council and Kulshan Community Land Trust. 

Blake encouraged us to educate ourselves and those we know, and advocate for policies that we feel have the most value and benefit.

Following their presentations, the speakers had an opportunity to ask questions of one another to elaborate on issues such as the cost of mitigation, which is the developer’s support for schools, roads and parks due to the impact of new home buyers or renters; what it means to age in place; the impact of climate change, and property rights.

Responding to a question from the audience, Blake made the point that a property with four residential units or more is considered commercial development, with many more requirements.  Another break point is how high the building: up to five or six stories they can be built of wood.  Higher than that, they must be built of steel.

It’s not the 1950’s anymore! To view the entire recording, click here.