Written by Jennifer Thomas, Government Affairs Coordinator at the Spokane Home Builders Association
SHBA | BUILDERS NEWS BRIEF
Approximately one year ago, the Mayor’s Housing Task Force was formed to gain critical insight and feedback on issues surrounding the extreme rate of growth, low housing inventory, and an escalating cost of living in our community.
The Mayor’s Housing Task Force has stated, “...the lack of (housing) supply has contributed to the cost of ownership and rent increasing by 50% over the last two years- an unsustainable amount for the more than half of our residents that are living in extreme poverty according to the US Census.”
TOP FIVE ISSUES DRIVING THE SPOKANE HOUSING CRISIS
Eight out of ten Spokane residents can’t afford to buy a home in current market conditions. Read that sentence again. We’re in a housing crisis like never before.
Home prices in Spokane rose 30% over the past year alone, hitting an all new high for the average median home price this week at $460, 000.
But the recent spike in home prices is only the tip of the housing crisis iceberg; the driving forces behind housing affordability started years ago.
It’s past time to take action, and that work begins by getting a clear understanding of what’s driving the crisis.
Here are the top five reasons we’re in such bad shape.
1. POPULATION GROWTH
Between 2010 and 2021, Spokane County’s population grew by 56,000 people, or around 14 people per day. That’s A LOT.
And data from the U.S. Census Bureau illustrates what many policymakers and homebuilders already know: Spokane is one of the cities leading the nation for population growth and the need for housing units.
The pace shows no sign of slowing. Spokane County’s population growth is expected to grow by nearly 50,000 people over the next decade, according to the state’s Office of Financial Management’s medium growth projections.
This is a problem we must solve for the sake of our growing community.
2. LACK OF SUPPLY
It’s simple economics; lack of supply drives up costs, and we’re way behind on supply. Between 2010 and 2021, Spokane County underbuilt new homes to the tune of hundreds of homes per year. Even now, we’re building around 1,400 fewer units per year than needed by our growing population.
Projections show that Spokane will need to add nearly 2,900 housing units per year to meet housing demand, but we’re only building around 1,500.
The supply issue is driving up costs in the rental market, too. As home prices increase, more would-be buyers are stuck renting, creating more demand for rentals.
“The rental and single-family housing markets are very tied together,” Joel White, SHBA’s Executive Officer, told The Spokesman-Review. The rental-to-housing market connection is evident by these rental statistics:
• 1.4% – Spokane County’s vacancy rate for all apartment units, according to the Washington Center for Real Estate Research’s fall 2021 apart- ment market report.
• 10% – The increase in median rent for all rentals in Spokane from May 2021 to May 2022, accord- ing to Apartment List, which publishes monthly reports on rental data.
• 34.5% – The increase in median rent for all rentals in Spokane since the beginning of the pandemic (March 2020), according to Apartment List.
3. LACK OF SKILLED LABOR
Our members experience the shortage in skilled homebuilders firsthand. In fact, our Workforce Development Program was created in response to SHBA members saying they’re having trouble finding skilled workers.
The demand for housing drives the demand for skilled workers and contractors are finding themselves in bidding wars for workers. This results in longer build times, which is another issue driving up the cost of housing.
The labor gap is expected to get worse as a large population of construction workers near retirement age. 23% of construction workers in the state are over the age of 55 and 750,000 will be of retirement age by 2030.
Unfortunately, budgets for career and technical education (CTE) in high schools continue to be cut and students lack access to career pathways for home building trades. There’s a misconception that school districts are prioritizing trade programs but budget allocations tell the real story. One of the latest cuts happened in Mead School District, the third-largest in Spokane County, where the CTE Director position was not included in the 2022-2023 budget.
Through Frame Your Future, SHBA’s industry-funded trades exposure program, we’re collaborating with Spokane area schools and industry leaders to create a future worker pipeline for residential construction but we can’t do it alone.
4. RESISTANCE TO ZONING CHANGES
Ok, so we know that we need more houses and more skilled workers to build those houses. Is there anything else keeping homebuilders from building enough homes for everyone? Unfortunately, yes.
In order to keep up with the demand for housing, Spokane needs about 2,900 more housing units per year. But under current zoning policies, that’s nearly impossible to do.
Jim Frank, SHBA member and founder of Greenstone Homes, said, “the Spokane development code makes it very difficult to build anything but large homes on large lots and restricts all multifamily development to segregated high-density zoning districts. When you look around Spokane, what you see are single family homes on large lots, along with large multifamily projects. There is virtually nothing in between.”
Missing middle housing types like duplexes, triplexes and townhouses make up only 9% of Spokane’s housing while single-family detached homes account for over 68%.
Sadly several neighborhood councils and currently elected City Council members are not eager to help change zoning.
John Schram, a co-chair of the neighborhood council in Spokane’s Comstock neighborhood was recently quoted saying “I have nothing against duplexes and triplexes, just not next to my house.”
That is in stark contrast to the prioritized agenda set forth by Spokane Mayor Nadine Woodward in an effort to help bring relief to the housing emergency.
“We need more housing and greater variety now,” Woodward said. “Business as usual isn’t currently equipped to deliver new construction quickly enough to immediately increase inventory.
