Washington Housing Affordability

January 2015
State of Washington Housing Affordability Advisory Committee has just released their report on housing affordability. Here are a few excerpts from the Executive Summary.

HOUSING NEEDS ASSESSMENT

EXECUTIVE SUMMARY
Housing affordability is a problem in Washington State. Thirty-six percent (936,260) of Washington’s households are cost-burdened. More than 390,000 households (15.2%) are severely cost-burdened. In fact, the proportion of the lowest-earning households (earning less than 30% of the state’s median family income) that are severely cost-burdened is greater than those who can reasonably afford their housing.

Obviously, homelessness is another critical affordability problem one step beyond cost burden. While homelessness is not captured in cost-burden data, it is discussed in the Housing Needs Assessment.
The Housing Needs Assessment was commissioned by the diverse, governor-appointed membership of the Washington State Affordable Housing Advisory Board to create an unbiased accounting of housing affordability in Washington. It is meant to serve as a foundation for current and future policy discussions. In future years this study can be replicated to understand trends and the effectiveness of policy decisions and investments.

This study is a snapshot of housing affordability in Washington

COST-BURDENED:
when a household pays more than 30% of its income for housing expenses

SEVERELY COST-BURDENED:
when a household pays more than 50% of its income for housing expenses

AFFORDABLE:
when a household pays no more than 30% of its income for all housing costs

Affordability varies by region. There are housing affordability problems in every county inWashington, but the size and nature of the problem varies by region due to differences in housing costs and incomes.

For example, in Pierce County a four person household needs an income of $54,160 (75.5 percent of the local median family income) to afford to rent a three-bedroom apartment. 

Although most households with incomes below 50 percent of the state’s median family income are cost-burdened, many households earning above 80 percent can find affordable market-rate housing.

Similarly, 53.8 percent of owner-occupied housing units across the state are affordable to a household earning the median family income.

What income does it take to afford the typical rent or the median valued home?
GAP
Only 28 affordable units are available for every 100 extremely low-income households.  In Washington State, 118,092 units of subsidized rental housing have been built using state, local, federal and private capital funds. In addition to these physical units, 40,169 tenant-based rent vouchers are in circulation across the state.

A significant unmet need remains for special groups with limited incomes such as seniors, people with physical and cognitive disabilities, families, victims of domestic violence.

Affordability is a considerable problem for lower-income households

For extremely low- and very low-income households, Washington State has a deficit of 327,136 affordable and available housing units. In other words, for every 100 extremely low and very low-income households, only 51 units are affordable and available to them.

The remaining 49-unit gap represents households in the state who are paying more for housing than they can reasonably afford.

Since 2000, incomes in the state have declined by 2.4 percent but median rents have increased 7.8 percent in real dollars. This means that housing affordabilty in the state has been a growing problem over the past
decade.

Washington State’s above-average economic and job growth is forecast to continue, resulting in continued population increases. Most of that growth will be driven by low-income households.

The affordable housing gap is shrinking, but very slowly.
The number of housing units priced for low-income households is forecasted to grow at a
similar but slightly faster rate than the number of low-income households.

If the current status quo in Washington remains unchanged, it will take at least 30 years for the gap in affordable and available housing to close.

Available online: You can find the report and all its components atwww.commerce.wa.gov/housingneeds.

Happy Investing!