|
Housing Indicators in King County
Show Improving Affordability (For Some)
NWREporter March 2005
Arrows are pointing in opposite directions for
sellers and renters of housing in King County. A recently released
issue of the King County Benchmark Report concluded the rental market
is exhibiting predictable patterns, but the sale market “is
behaving in somewhat unorthodox ways.”
Rents increased only 1.5 percent from 2001 to
2002, then, reflecting the effects of high unemployment, rental
rates fell 2 percent in both 2003 and 2004. “The fortunate
result is that over half of King County’s cities now have sufficient
rental housing for those making about 50 percent of median income,”
the researchers commented.
For the 65,000 renter households in King County
who find themselves in the lower bracket (those who make 30 percent
of median income or below), the supply of affordable housing “remains
almost non-existent.”
For homebuyers, it was a somewhat different story.
Falling mortgage rates during the past five years helped stimulate
home sales as both first-time and move-up buyers took advantage
of favorable financing. Despite a listless local economy, home sales
surged and prices rose.
To meet demand, King County has been building
close to one new housing unit per person in the County during the
past four years, according to data compiled by the County’s
Growth Information Team. That production, which includes detached
single-family homes and multi-family dwellings, yielded more than
40,000 new units for a population increase of about 50,000 persons.
Calling it an “almost unprecedented rate
of housing growth,” the King County staffers who produce the
Benchmark Reports predict the strong home-building and home-buying
market will likely change in the next few years. They cite two factors
as likely culprits: 1) an expected rise in interest rates, which
could make homes that were affordable last year no longer affordable
to some moderate income buyers, and 2) demand that may have peaked.
With an abundant supply, the authors note, prices are likely to
stabilize and perhaps even drop.
The County’s researchers suggest a drop in
home prices “may be a good corrective for housing affordability,”
but caution it could also have negative consequences. At risk are
households that may have “overpaid” or have an adjustable-rate
mortgage that becomes burdensome as it adjusts upward.
In examining affordable housing, the analysts
considered nine indicators and their corresponding outcomes in the
context of Countywide Planning Policies:
Supply and demand for affordable rental housing.
While there is a surplus of market rate affordable rental units
for those earning 40 percent or more of median income, there is
a shortfall of nearly 120,000 units for households in the lowest
brackets (making less than 40 percent of median income).
Percent of income paid for housing. Among all households (owners
and renters), the proportion paying more than 30 percent of their
income for housing costs jumped from 27 percent in 1989 to 38 percent
in 2002 (the latest period). In 2002, 46 percent of renter households
were paying more than 30 percent of their income for housing. Nearly
three of every four renter households (74 percent) in the two lowest
income categories paid more than they could afford for housing,
according to the 2000 Census.
Homelessness. The homeless population for 2003 was estimated at
more than 8,000 per night, or about one person out of every 220
residents in King County. The street count of homeless persons showed
an increase of 12 percent from 2003 to 2004. The high cost of housing
is listed as one of the underlying factors of growing rates of homelessness.
Home purchase affordability gap for a) buyers with 80 percent of
median household income (typical first-time buyers); and b) buyers
with median income. A median-income household in King County could
afford a home costing about $233,300 in 2004. Using a median home
price of $293,000 (the figure for the first 10 months of 2004),
there is a gap of nearly $60,000. (Editor’s note: see chart)
Home ownership rate. King County’s home ownership rate for
2002-2003 is estimated to be between 61 and 62 percent, the first
time it has climbed above 61 percent since 1980. (See chart)
Apartment vacancy rate. The current apartment vacancy rate in King
County is 7.2 percent. Low mortgage rates are believed to be a factor
in high vacancy rates of the past few years. Many middle-income
renters have been able to afford to buy their first home, taking
advantage of favorable financing. As vacancies increase, rents stabilize
or decrease.
Trend of housing costs in relation to income. Between 1990 and 2004,
the rate of growth in median income for King County has averaged
about 3.7 percent per year. During the same 14-year period, home
prices rose at an annual rate of 5.4 percent.
Public dollars spent for low-income housing. For all of King County,
just over 27 percent of housing is affordable to those earning 50
to 79 percent of median income (moderate income households). This
compares positively to the 16.5 percent of all households who are
in that group, according to the authors of the Benchmark bulletin.
Affordable housing is not equitably distributed throughout the County.
Cities in South County and two rural cities have disproportionately
high amounts of affordable housing, while most Eastside cities have
very little. “This creates long commutes for many low-earning
workers, and militates against equal opportunity in public schooling,”
the authors observe.
The Affordable Housing bulletin is part of a series of Benchmark
Reports produced by King County’s Office of Management &
Budget. Inaugurated in 1994 by the Growth Management Planning Council,
the program comprises 45 Benchmark Indicators that are used to monitor
progress in implementing the goals of the King County Countywide
Planning Policies.
Copies of the Benchmark Reports and the
county’s comprehensive Annual Growth Report are available in
various formats. The publications may be viewed and downloaded at
http://www.metrokc.gov/budget.
Information provided by the
Northwest
Multiple Listing Service
|
