October 2, 2003
Eastside tries filling an affordable housing gap
By ARTHUR SULLIVAN
A Regional Coalition for Housing
Over the last 10 years, housing development in East King County has been fairly healthy, with cities developing plans to allow greater amounts and more types of housing.
From 1993 through 2000, total housing development in East King County was over 26,000 units. This amount actually exceeds housing production targets established under the Growth Management Act.
Yet relatively high housing costs still persist.
In the third quarter of 2002, average resale prices of homes in East King County was about $367,000, compared to about $300,000 countywide. Rents in Eastside cities typically are $100 to $270 higher than the countywide average rent of $850.
Employment growth in East King County is a key factor contributing to high housing costs.
During the 1990s, over 100,000 jobs were added in East King County compared to the 26,000 new homes. Job growth in the area even outpaced job growth in Seattle, where about 67,000 jobs were added. While much of this job growth was in the higher paying technical sector, a large portion of these jobs were retail and other moderate paying jobs.
Changes in the population also impact the housing market. Suburbs, long considered the bastion of two-parent families with children, have also become home to singles, childless couples, elderly and others. In the 2000 census, 27 percent of East King County households were single-person, 29 percent were married couples without children and 25 percent were married couples with children.
Another local trend has been increased cultural diversity. Based on the 2000 census, 17 percent of all East King County residents were foreign born (24 percent in Bellevue).
Impacts on housing
One response to the increase in smaller households has been the increased popularity of condominiums and housing in downtown areas such as Bellevue and Kirkland.
However, demand resulting from employment growth has resulted in several areas of the market being underserved.
One underserved group is rental housing for lower income households (earning less than $31,000) who can afford rents of $750 or less. This group includes retail employees, office support staff, laborers and seniors on fixed incomes. Based on the 2000 census, 14 percent of households in East King County were lower income, yet less than 7 percent of housing was affordable to that income.
Another underserved group is moderate-income households (earning less than $60,000) who are looking for a home to buy. This includes a large segment of our community, such as teachers, middle managers and heath care workers.
These gaps have several impacts.
First, local employees may seek housing further away in order to find lower prices, which then contributes to traffic congestion.
Second, employers could find it increasingly difficult to recruit or retain employees, especially for more moderate paying positions.
“Lake Washington School District loses one third of new hires within five years,” said Bob Collard, assistant superintendent for the district. “Many of these exiting teachers report high housing costs and long commutes as a significant reason for their leaving.”
Third, lower income families have to pay a higher portion of their income for housing, leaving less income for other needs such as insurance or health care. Not only does this impact those families, but can also impact the larger community.
Local cities’ efforts related to housing have looked not only at how much housing is allowed, but also at having a mix of housing that can meet the needs of its residents and employees. Land use regulations are the primary tool used by cities to impact local housing conditions.
Over the past decade, several cities have encouraged housing development in their downtowns or commercial areas. For example, in a portion of Redmond’s Overlake neighborhood, the city created a “housing emphasis” area where it allows higher density for housing uses. The intent is to create a small pedestrian-oriented, mixed-use neighborhood with housing.
Redmond’s special zoning led to the development of the Village at Overlake, a new rental housing project targeted at moderate-income households.
Other commercial areas with strong housing growth in the last decade include downtown Bellevue, Kirkland and Redmond. Other communities, including Mercer Island, Woodinville and Kenmore, have plans to encourage more housing in their downtowns.
Many cities allow slightly higher densities in new development if some of the housing is targeted toward moderate-income families. A number of private developments in Kirkland, Bellevue, Redmond and Woodinville have used such incentives, resulting in condominiums, town homes and duplexes for moderate-income homeowners. These homes are intermingled among market rate units, and have covenants to ensure their relative affordability over time.
Another regulatory effort used by most cities in East King County is to allow accessory dwelling units, ADUs, in single-family homes. This can help older homeowners maintain their home or young families buy a home, while providing a relatively affordable form of housing for smaller households.
In Mercer Island, over 160 ADUs have been created since 1994.
“ADUs have been a wonderful solution for Mercer Island’s need for affordable housing,” said Richard Conrad, Mercer Island city manager. “They have allowed a city that is almost built out to increase housing opportunities within their existing housing stock.”
Beyond these regulatory efforts, cities have taken a more proactive step toward addressing housing needs of lower income residents. Ten years ago, local governments began a formal partnership to work cooperatively on various housing issues. Originally three cities (Bellevue, Kirkland and Redmond) and King County created this partnership called A Regional Coalition for Housing — ARCH.
The coalition has become a nationally recognized organization and its membership includes King County plus all 15 urban cities in East King County. It provide assistance to its members on a variety of housing initiatives.
Cities use ARCH to pool local resources through the ARCH Housing Trust Fund, which has directed $18 million in loans and grants to a variety of housing projects for lower income families. These have included both new construction units and the acquisition and rehabilitation of existing housing.
“One thing that excites me about ARCH is that it’s a great example of a successful partnership between the cities and King County to address a common issue and find successful solutions,” said Bellevue Mayor Connie Marshall.
The result has been the creation of over 1,800 units of housing for lower income families, seniors, homeless families and individuals with special needs.
“These days it takes creativity and flexibility to make difficult affordable housing projects come to fruition,” said Mark Thometz, executive director of DASH, a Bellevue-based nonprofit housing agency. “ARCH is an invaluable resource to its member jurisdictions and housing developers in structuring partnerships that work and enabling local jurisdictions to leverage their limited resources.”
There is no indication that East King County’s tight housing market will end any time soon. Local plans call for employment growth at levels which could outpace housing growth. Therefore, it can be expected that local employees will continue to juggle the trade-off of choosing less housing with more convenience versus more housing with longer commutes.
Cities and builders will continue to look to downtown areas to provide housing. In addition, early efforts by cities and builders to find other ways to house an increasingly diverse population through ideas such as “cottage housing” will continue.
One looming obstacle for the building community is the increasing difficulty of building condominiums due to liability insurance issues. If not addressed, reductions in development of new condominiums could be devastating to efforts in East King County to provide a range of ownership opportunities.
Efforts over the last 10-plus years have not led to a perfectly balanced housing market, but they do indicate the public and private development sectors continue to evolve as housing conditions and needs change. Many of the “ideas” of 1990 have become reality in 2000.
“Eastside cities have been innovative at creating new types of housing,” said Rob Odle, Redmond’s policy planning manager. “This spirit of innovation needs to go to a next level. We will need housing that meets demands from growth, but is also within the character of our existing community. We need to seek new alternatives both in terms of design and ownership opportunities.”
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