State of Affordable Housing: Monday, January 22 nd , 2018 Northwest - - PowerPoint PPT Presentation

Our Vision

All people live with dignity in safe, healthy, and affordable homes within communities of opportunity

State of Affordable Housing:

Monday, January 22nd, 2018 Northwest Credit Union Foundation Affordable Housing Summit

Goals for Today

• Understand the current context of affordable housing
• Learn about some of the ways HDC and our member
• rganizations work to meet the need
• Explore roles that CUs can engage in to help ease the crisis

HDC’s Purpose

• HDC exists solely to serve as an advocate, broker and convener of and for our

150 member organizations and businesses.

• Since its inception 30 years ago, HDC and our members have known that it

takes a unique set of personal and professional skills to increase the effectiveness, visibility, and impact of the affordable housing sector.

• Mission: Through education, advocacy and leadership, HDC supports and

inspires its members as they work collaboratively to meet the housing needs of limited-income people throughout King County.

What we know

• Every community in Washington needs more affordable homes
• Our region’s uneven economic growth has contributed to the need
• No city in King County is meeting the proportional need for homes

affordable to households at or below 30% AMI

28% 16% 9% 5% Homelessness Lack of affordable housing Traffic 8% Transportation 8% Government / Administration 7% Growth 5% Cost of living 4% Poor infrastructure 3% Crime / Drugs 3% School / Education 3% High taxes 2% Other No Answer /Don't know

Most Important Problem: 2017

28% 16% 16% 12% 29% 5% 4% 2% 35%

Homelessnes s Lack of affordable housing Traffic / Transportation

2017 2015 2013

Some Would Call This a Pretty Wicked Problem!

The notion of “wicked problems” is explored in detail in: Developmental Evaluation: Applying Complexity Concepts to Enhance Innovation and Use

by Michael Quinn Patton (The Guilford Press, 2010)

A “Wicked Problem”…

… is difficult to define; … has tangled root causes; … involves stakeholders with diverse values, interests, and positions; … varies from person to person and community to community; … is constantly evolving; and … has no obvious answers or measures of success.

Median Home Values: Puget Sound Counties

Percent from pre-crisis peak +33% +15% +7% +4% +2%

• 6%

Courtesy of Zillow

Median Rents: Puget Sound Counties

Courtesy of Zillow

Average Weekly Wages: Growth from 2005 and 2012

Notes: Other Seattle Metro includes Pierce and Snohomish counties; Other Puget Sound includes Thurston,Mason and Kitsap Counties. 3-quartermoving average. Geography based on employerlocation. Source: U.S. Bureau of Labor Statistics, Quarterly Census ofEmploymentand Wages.

Courtesy of Zillow

Mortgage Rates Still Near Historic Lows Despite a Strong Labor Market

Courtesy of Zillow

Very Few Affordable Homes for Sale for Low-Income Households

Courtesy of Zillow

HUD determines a household to be cost burdened if the household spend more than 30% of their income on housing Households that spend more than 50% are also considered severely cost burdened

Cost burden is a measure of whether or not housing is affordable. Cost burden is both a concept and a data term.

Courtesy Community Attributes, King County Housing Affordability Task Force

290,100 Households (1 in 3) in King County are Cost-Burdened in 2017.

AMI Cost-Burdened Households Severely Cost- Burdened Households All Cost-Burdened Households

0-30% AMI 25,400 75,700 101,100 >30-50% AMI 43,300 28,900 72,200 >50-80% AMI 53,900 13,100 67,000 >80-125% AMI 32,200 3,500 35,700 +125% AMI 12,600 1,500 14,100 All Incomes 167,400 122,700 290,100

Courtesy Community Attributes, King County Housing Affordability Task Force

11% 11% 12% 12% 12% 11% 9% 18% 17% 17% 19% 19% 20% 19% 0% 5% 10% 15% 20% 25% 30% 35% King County Seattle Eastside

• S. Central

King South King North King East King

King County

Homeowner Cost Burden by Region, 2015

Housing Cost Burden

> 45% of renters are cost burdened, countywide, compared to 29% of homeowners. > South King and North King areas have slightly greater share of cost-burdened owners.

Sources: US Census Bureau, ACS 2015 5-Year Estimates; Community Attributes 2017

29% 28% 29% 31% 31% 28%

Severely Cost Burdened Homeowners Cost Burdened Homeowners

31%

% of Owner Households 470,600 137,300 107,600 89,900 71,000 34,900 29,900 11% 21% 18% 24% 0% 10% 20% 30% 40% 50% Home Owners Renters Severely Cost Burdened Cost Burdened

29% 45%

King County, 2015

Courtesy Community Attributes, King County Housing Affordability Task Force

21% 20% 17% 24% 25% 24% 19% 24% 24% 19% 28% 26% 25% 22% 0% 10% 20% 30% 40% 50% 60% King County Seattle Eastside

• S. Central

King South King North King East King

King County

Renter Cost Burden by Region, 2015

Housing Cost Burden

> Among renters, South Central King, South King, and North King have noticeably higher shares

• f Cost Burdened

Households.

Renter Cost Burden

Sources: US Census Bureau, ACS 2015 5-Year Estimates; Community Attributes 2017

45% 44% 36% 52% 51% 49% 41%

Severely Cost Burdened Renters Cost Burdened Renters % of Renter Households 349,000 160,800 60,300 69,800 34,400 17,400 6,300 11% 21% 18% 24% 0% 10% 20% 30% 40% 50% Home Owners Renters Severely Cost Burdened Cost Burdened

29% 45%

King County, 2015

Courtesy Community Attributes, King County Housing Affordability Task Force

Greater Numbers of Renters Experiencing Cost Burden

Seattle: 36.5% SeaTac: 44.2% Housingconsortium.org/maps

Many types of households struggle with housing costs

3 person HH at 30% AMI

> Cashier earning $25,410*, $12.20/hr > Home health aide earning $25,864, $12.40/hr

2 person HH at 50% AMI

> Teacher earning $37,447 > Restaurant cook earning $30,281

2 person household under 80% AMI > Full-time taxi driver earning $26,340 plus childcare worker earning $26,038 > Full-time welder earning $48,548 > Retired couple earning $42,200 in pensions

*All salaries represent the median annual salary for the occupation in King and Snohomish Counties as reported by WA ESD 2017

4 person household under 80% AMI > Biologist earning $76,900 > Accountant earning $69,940 > Full-time office clerk earning $37,566 plus full-time security guard earning $32,427

Courtesy Community Attributes, King County Housing Affordability Task Force

Many factors of supply and demand affect the price of housing.

DEMAND

Incomes and income inequality Growth of households and jobs Household sizes and composition Available inventory

• n the market

Vacancy rates Net new development Development costs

SUPPLY

Courtesy Community Attributes, King County Housing Affordability Task Force

The number of homes available for purchase has declined steadily since the recession.

> Source: Zillow, 2017

13,234 3,289 2,000 4,000 6,000 8,000 10,000 12,000 14,000 2010 2011 2012 2013 2014 2015 2016 2017

Homes For Sale

King County

Homes Available For Sale, 2010-2017

Courtesy Community Attributes, King County Housing Affordability Task Force

Housing development has struggled to keep pace with dramatic population growth.

The past two years have seen unprecedented growth in each of the following in King County > net new households > housing units built > gap in household increases over units built Source: OFM, 2017

6,400 11,400 8,200 9,900 20,600 10,300 9,400 12,900 8,500 14,000

• 5,000

10,000 15,000 20,000 25,000

2000-2005 2005-2007 2007-2010 2010-2015 2015-2017

HHs & HUs per year

King County

Annual Change in Households and Housing Units, 2000-2017

Households Housing Units

Recession: 2008-2009 Recession: 2001-2003

Courtesy Community Attributes, King County Housing Affordability Task Force

Countywide growth in households has included upper income households more than middle and lower incomes.

Sources: US Census Bureau, ACS 1-Year Estimates; Community Attributes 2017

Change in King County Households, by Income Range, 2006 - 2016

> Higher income households have increased substantially more than the number of lower and middle income households, since 2006. > The data have been adjusted for inflation.

Less than $50,000 $50,000 - $124,999 $125,000 or More

19,600 23,900 65,500

• 10,000

20,000 30,000 40,000 50,000 60,000 70,000 Lower Income Middle Income Upper Income

Households

249,700 319,500 292,000

0k 50k 100k 150k 200k 250k 300k 350k

<$50k $50k $125k > $125k

All King Co. Households, by Income, 2016

Courtesy Community Attributes, King County Housing Affordability Task Force

Average Area Rent Increases of Around 5 percent per Year, Push About 258 Seattle Metro Households into Homelessness

Courtesy of Zillow

Low-Income Renters in High Rent Growth ZIP Codes are ~2x Less Secure than Low-Income Renters in Low Rent Growth ZIP Codes

Source: Zillow Homeownership Aspirations Report, March 2017.

Courtesy of Zillow

As the share of income spent on rent rises, households are increasingly unable to save any of their income

Source: Zillow analysisof Federal Reserve Board, Survey of Households Economics and Decision Making, 2015.

Courtesy of Zillow

King County Requires 156,000 new homes to address countywide need for today alone (not including continued growth).

TODAY’S CHALLENGES

290,100 Households & 12,000 Experiencing

Homelessness

Household by Type Estimated Homes Required

11,600 People Experiencing Homelessness 9,700 122,700 Severely Cost-Burdened Households 75,700 167,400 Cost- Burdened Households 70,200 Requires

156,000

Homes in 2017

Courtesy Community Attributes, King County Housing Affordability Task Force

King County requires 244,000 new homes to address the countywide affordable housing need by 2040.

88,000

Households @ 80% AMI or lower

ADD GROWTH 2017-2040

Requires

244,000

Homes by 2040

156,000

Homes Required for 2017 Alone

Income Segments Households

0-30% AMI 29,700 31-50% AMI 23,900 51-80% AMI 34,500 81-125% AMI 36,300 > 125% AMI 77,100 Total Growth 201,500

Courtesy Community Attributes, King County Housing Affordability Task Force

What are we doing?

Lower housing costs require greater government intervention

>125% AMI More than $120,000 80-125% AMI $120,000 max 50-80% AMI $76,800 max 30-50% AMI $48,000 max <30% AMI $28,800 max 0-30% AMI

Rental:

Government support needed in all markets

50-80% AMI Rental:

Government incentives needed in some markets

Home

• wnership:

Subsidy or incentives needed in many markets

80-125% AMI Rental or Home Ownership:

Permissive zoning or zoning flexibility needed in some markets

Above 125% AMI

Market Rent and Home Ownership

30-50% AMI Rental:

Gov’t support needed in many markets

Sources: HUD, 2017; US Census Bureau, ACS 2015; CAI, 2017

Courtesy Community Attributes, King County Housing Affordability Task Force

Non-Regulatory Actions

• Education & Community

Engagement

• Strategy Task Force
• Partnerships
• State and Federal Advocacy

Example Policies

• Promote Equitable Communities of Opportunity

▪ In all neighborhoods, particularly near employment, education, and transit opportunities, encourage and support funding and permitting for the development of housing affordable to low-income households.

• Promote Partnerships

▪ Collaborate with other jurisdictions to assess housing needs, coordinate funding, and preserve and create affordable housing.

• Increase Public Funding

▪ Explore the feasibility of creating a City or regional housing trust fund.

• Provide Development Incentives

▪ Provide density bonuses, parking reductions, multi-family tax exemptions, fee waivers and permit expediting to encourage the development of housing affordable at below market-rate, for the greatest number of homes at the deepest level of affordability possible.

• Monitor, Evaluate, Review & Amend
• Measure, monitor, and report progress on addressing affordable

housing needs.

Development Incentives or Requirements

• MFTE
• Inclusionary/Incentive Zoning
• Commercial Linkage Fee
• Impact Fee Exemption
• Reduced Parking Requirements

Inclusionary Zoning

• Opportunity for action
• Policy Choices

▪ Voluntary or Mandatory? ▪ “Set-Aside” Requirement ▪ Income Targeting ▪ Incentives ▪ In-Lieu Fee?

Financing

• Housing Trust Funds & ARCH
• Housing levies
• HB 2263
• Mental Illness & Drug

Dependency sales tax

• Real Estate Excise Tax (REET)

Taxing Source Action Jurisdiction Authorizing Leg Housing Levy Property Tax Voter approval City or County RCW 84.55 HB 2263 Sales Tax Voter approval County, cities after 2 years (3 years in King County) RCW 82.14 REET Tax on the sale of real estate Council approval City Not yet authorized for affordable housing

Choices, Choices, Choices

Other Strategies

• Tenant Protections

▪ Tenant Relocation and Assistance Ordinance ▪ Just Cause Eviction Ordinance ▪ Section 8 Anti-Discrimination Ordinance ▪ Access to Housing Legislation, HALA

• Preservation

▪ Rental Inspections ▪ Acquisition/Code Enforcement Loan Program ▪ Preservation Property Tax Exemption ▪ Accountable Communities of Health

How Can Credit Unions Engage in This Crisis?

Resources

• A Regional Coalition for Housing (ARCH)
• Commerce Short Course on Local Planning
• GMA Website
• HDC Maps
• MRSC – Planning
• PSRC Housing Guides and Resources
• Seattle Housing Affordability and Livability Agenda (HALA)

Contact Info

Housing Development Consortium Seattle-King County Executive Director: Marty Kooistra, marty@housingconsortium.org (206) 682-9541 1402 Third Avenue, Suite 1230 Seattle, WA 98101

Our Vision

All people live with dignity in safe, healthy, and affordable homes within communities of opportunity

Thank you!