December 8, 2007 in Business

Proactive measures urged for housing

By The Spokesman-Review
 

By the numbers

November home sales

481 – home sales in Spokane County

$203,204 – average sale price

$176,000 – median sale price

$97.7 million – sales volume

2,864 – number of residential properties on the market

Spokane Association of Realtors

The Spokane area can’t rely on “business as usual” to house a growing population in the face of rising home prices, according to a report released Friday by the Spokane Affordable Homeownership Task Force.

Model projects resulting in “new, innovative market rate housing developments” are needed to prevent the area – projected by a state agency to see 153,000 more residents by 2030 – from looking like the Puget Sound region, where working-class people may struggle to pay for a home, task force representatives told about 100 Realtors, officials and businesspeople at the Spokane Convention Center. Stating that housing stock will remain traditional, or leaning toward single-family units, for “the foreseeable future,” it also calls for more cooperation between homebuilders and governments.

But Bellevue-based consultant Mike Luis, hired to mediate task force discussions and write the report, said the hardest phase is still ahead: convincing risk-adverse people alternatives can work.

“This is a wonderful community – don’t screw it up the way we did, in terms of making it unaffordable,” Luis said.

The report culminates several months of task force analysis of the Spokane housing market. An abrupt increase in area housing prices following a “long period of sustained affordability” spurred the Spokane Association of Realtors and Spokane Home Builders Association to act.

Spokane ranked 13th among the top 20 U.S. cities for highest rates of house price appreciation, with 8.79 percent over the year ending Sept. 30, according to the Office of Federal Housing Enterprise Oversight.

Spokane County median home sale prices increased more than 55 percent over five years, reaching $186,000 in September, said Realtor Ken Garceau. The area’s median income increased about 16 percent since 2003, to an estimated $45,500 in 2006.

“This is not the end. This is still the beginning, what we’re hearing today,” Garceau said.

“What you have right now is a price problem, it’s not an income problem,” Luis said.

But first-time home buyers also may face obstacles. A typical Spokane County household trying to buy its first home had 60.1 percent of the income required to quality for a starter house in the third quarter of this year, according to the Community Indicators Initiative of Spokane. That compares with 94 percent in early 1998.

Realtors stressed what they see as a distinction between low-income housing and “affordable housing.”

People who relocate to Spokane include retirees looking for places with universities and good health care; people who move from small, regional communities without a lot of skills or earning power; and young, single and college-educated people with higher earning power, Luis said.

Mid-level projections for Spokane County released last month predict a 2030 population of 589,623, compared with an estimated population of 436,300 in 2005, according to the state Office of Financial Management.

Focus groups conducted earlier this year revealed prices still haven’t reached a point to cause people to buy differently, Luis said. Affordable housing also isn’t yet a key political issue, he said.

The report recommends:

• Starting a demonstration program, showing examples of alternative forms of home construction that Luis said can provide context for infrastructure and regulatory issues;

• Further study of market demand, focusing on groups other than first-time and lower-income buyers, who were already surveyed;

• Promoting zoning, permitting and other regulatory changes, such as allowing “performance zoning” that aims to regulate the effects of development instead of “unit counts and building envelopes”;

• Presenting task force findings to city councils and county planning commissions.

A new TV and radio advertising campaign promoting planning and community action, sponsored by the Realtors, will kick off early next year, said Steve Taylor, government affairs director for the association.

City and county representatives who spoke at a panel discussion said both governments have regulatory provisions for denser or alternative types of dwellings, but they are underutilized.

The Home Builders Association wants to collect evidence to advise members whether alternative projects are more marketable, said Joel White, executive officer.

“It’s going to be an emerging segment of the market,” Jason Wheaton, president and chief operating officer of homebuilder Greenstone Corp., said of mixed-use development.


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