Affordable housing gap growing

Spokane County could become less attractive to companies thinking about locating here if homes keep getting more expensive.

Decreased affordability can harm a community’s ability to attract good-paying jobs, a consultant specializing in public affairs and civic leadership told members of the Spokane Affordable Homeownership Task Force at a Tuesday meeting at River Park Square.

Michael Luis of Michael Luis & Associates of Medina, Wash., delivered a message about the issues and challenges surrounding affordability to a task force comprised of city and county politicians, professionals, developers and nonprofits. The group is examining ways to create affordable housing in the face of double-digit real estate appreciation.

Spokane ranked third among metropolitan areas throughout the nation for appreciation of median-priced homes in 2006, according to statistics provided by the National Association of Realtors. Median home prices increased by 17.7 percent last year, to $184,100.

It was the first quarterly meeting for task force members, who listened as Luis shared insights into the nature of the real estate market and what can be done to create homes that everyday workers can afford.

Affordability issues are impacting residents of cities and towns across the state, he explained. Last year 81,000 people moved to Washington, Luis said. Many of the incoming residents are well-positioned to afford homes, which raises demand and pushes prices up.

“The people who come into a market can typically afford a market,” he said.

While Spokane County has seen steady population increases during the past two years and phenomenal job growth last year, wages and salaries have remained flat. In fact, incomes even fell slightly when adjusted for inflation, Luis said. During that same time, migration into the area helped drive median housing costs up by more than 30 percent —creating a growing affordability gap.

The problem could worsen if the region continues to attract more new residents and the number of building permits doesn’t increase enough.

“Those who don’t have houses right now are going to be hurting,” Luis predicted.

In the end, the ability to purchase a house boils down to two issues, he said — personal income and housing cost.

The solutions are separate, Luis explained, because while a subsidy could help the low-income afford a home, it wouldn’t address why home prices are increasing more rapidly than most incomes.

Luis discussed several developments built to provide affordability for communities in Western Washington. The projects created dense housing, with compact, yet attractive, homes built on small lots, but offering shared green space or parks nearby.

But during a dialogue after the presentation, some attendees questioned whether Spokane was ready for such a project.

Jason Wheaton of Greenstone Homes said the dense housing communities would be a better fit for urban than suburban areas. People struggling to afford a home, he said, won’t want the expense of commuting that typically comes with suburban life.

Future price increases will likely follow state instead of national trends, Luis said, adding, “Washington state is not a boom-or-bust kind of place.”