King County Faces Housing Crisis Surging Home Prices, Rising Rents Spell Trouble For Many Residents

The number of new homes built in King County last year nearly doubled, but for many potential buyers, the prices are out of reach, a new report says.

Renters also are being hit hard, with rents rising faster than incomes and vacancy rates at an eight-year low, says the Annual Growth Report compiled by County Executive Ron Sims’ budget and planning staff.

The yearly report on economic, environmental and housing trends was released Wednesday.

“Home ownership is not an affordable option for King County households with typical renter incomes,” the report concludes. “Factors contributing to this problem include stagnating incomes, rising home prices and increasing ancillary costs, such as fees, taxes and insurance.”

New home construction grew 46 percent in the county last year, to 11,200 new units from 6,326 new units in 1995.

A fourth of the new units - 2,706 - were in Seattle and another quarter were in unincorporated areas, especially in the East Sammamish and Soos Creek areas, where county roads are exceeding capacity sooner than expected. Bellevue, Bothell, Kent, Kirkland, Redmond and Renton also had strong housing growth.

The number of new apartments and condos also nearly doubled, from 3,370 in 1995 to about 6,400 last year, but even that was not enough to meet growing demands for rental housing.

Homeownership is out of reach for an increasing number of renters, the report says. Last year the median-income renter in King County could afford to pay $87,100 for a home, but the median home price was about twice that - $174,300.

Among all families last year, the median-income household could afford to pay $157,500 for a home, assuming conventional financing. But a median-priced home cost $16,800 more than that.

As the affordability gap widens, home ownership rates will continue declining, especially among younger families and singles. About 59 percent of county residents owned homes as of the 1990 census, the report says.

Rents increased from 5 percent to 10 percent last year as apartment vacancies fell to 4.25 percent from 5.8 percent in 1995.

The report said the vast majority of new housing units are in urban areas where roads, schools and other government services are best able to handle growth. That trend fulfills the planning policies adopted by both county and city governments. Rural development was stable.

Although new home construction is booming, population growth remains slow at about 1 percent a year. The county has about 1.65 million residents.

“The suburban cities are acquiring the majority of King County’s growth, both through annexation and through new construction,” the report says. “With more than 677,000 people, the suburban cities together have far more population than either Seattle (536,000) or unincorporated King County (432,100).”

However, a healthy economy is expected to spur population growth, creating a housing squeeze and even higher prices, the report says.