Op-Ed

Should cities expand boundaries to encourage affordable housing?

This York District home was for sale in 2013. Whatcom County has the sixth-highest housing prices in the state, the UW’s Runstad Center for Real Estate Research’s second quarter 2016 snapshot reports.
This York District home was for sale in 2013. Whatcom County has the sixth-highest housing prices in the state, the UW’s Runstad Center for Real Estate Research’s second quarter 2016 snapshot reports. The Bellingham Herald

An appeal of Whatcom County’s Comprehensive Plan was filed Oct. 10 by the Building Industry Association of Whatcom County, Whatcom County Association of Realtors, Whatcom Business Alliance, Citizens’ Alliance for Property Rights, South Yew Street Group, and Whatcom Affordable Housing Group. This is an attempt to ensure that planning here takes existing conditions into account and protects and accommodates all citizens.

The Building Industry Association’s mission is to advance home ownership, to create a strong community and economy. The association believes not enough is being done to enable housing that residents want and can afford. This is a social justice issue. While local governments’ comprehensive plans address low-income residents’ needs, they ignore the middle class – which now earns a median income far below the median single-family home price ($369,900 in the third quarter of 2016, according to the Multiple Listing Service – the highest such figure since 2006). The Bellingham Herald has noted that people are buying fewer small homes in Bellingham because so few are available. Yet little is being done to change that.

Housing price problems

Whatcom County has the sixth-highest housing prices in the state, the UW’s Runstad Center for Real Estate Research’s second quarter 2016 snapshot reports.

We have the least affordable rents in the state, according to the 2015 Washington State Housing Needs Assessment.

Only 34 percent of owner-occupied housing here is considered “affordable,” comparing median income and housing prices, the assessment reports. By comparison, in neighboring Skagit County, 47 percent of housing is considered affordable. The state average is 54 percent.

People often complain about builders, asking, “Why don’t they just build smaller houses?” The simple answer is economics. With land prices so high, these don’t pencil out. Many would like to build more affordable homes, but usable residential lots are scarce in Bellingham (the county’s designated urban center). As a result, land prices have jumped.

Builders used to say land should represent 20 percent of a project; now the norm is 40 percent. Lots that once cost $60,000 now cost $120,000-$140,000. The cost of getting permission to build has also risen – permits and fees for a single-family home in Bellingham now run $25,000-$35,000. If there are wetlands or steep slopes, engineering and other studies may be required. You simply can’t get an appraisal that will justify the cost and support financing.

As costs have jumped, small and mid-range housing inventory has tightened. Supply and demand dictate the market. As The Bellingham Herald said on July 12, “Tight inventory is really doing a number on local real estate prices.”

Yet government hasn’t recognized that the lack of affordable, buildable land is a problem. The comprehensive plan doesn’t expand Bellingham’s Urban Growth Area – land outside a city targeted for growth in the coming 20 years. We believe this is a mistake. Single-family housing of some sort remains the public’s overwhelming preference, and the city is already short of affordable residential lots. If you can’t meet current demand, how can you adequately meet future needs?

According to city Planning Department testimony, Bellingham’s existing urban growth area is “largely built out,” much of the remaining “buildable land” is impacted by wetlands, steep slopes, streams – and the buffers that protect them, and infill is not “politically viable.” Yet Bellingham is continuing to rely on “urban villages,” where multi-family housing is the norm, to accommodate growth. The National Association of Home Builders’ January 2016 survey of housing preferences notes:

Of all buyers, 65 percent want detached single-family housing. The numbers vary some by age: Millennials, 68 percent; Gen X, 72 percent; Baby Boomers, 63 percent; and seniors, 55 percent.

In Bellingham, most residents now live in rentals, and most newcomers will have to live in rentals – for lack of alternatives. Where do you want your children and grandchildren to grow up?

The county comprehensive plan was approved Aug. 9 – before Bellingham or Lynden finish theirs. The Bellingham Urban Fringe Plan, which addresses areas no longer in the urban growth area, was not reconsidered – we believe in violation of the Growth Management Act. Capital facilities plans are inadequate to meet existing deficiencies, let alone growth. The required analysis of current housing needs isn’t adequate. And land capacity analyses underpinning these plans overstate densities in many areas.

This community deserves better, more accurate planning. Our residents deserve more choice in urban housing forms. To avoid sprawl, urban areas must meet current and future needs. The intent of this appeal is to encourage local government to get serious about doing that.

Linda Twitchell is the government affairs director for the Building Industry Association of Whatcom County.

  Comments