By Rolf Boone
The Olympian
Two years ago, The Olympian published a story about an affordable housing development called Merritt Manor, which was set to break ground on the former Bailey Motor Inn site on Martin Way in Olympia.
Since that story was published, dozens in need of an affordable place to live have called the paper seeking tenant information. And the good news is the 82-unit property is aiming for a September opening.
The anecdotal glimpse the newspaper got into the demand for affordable housing was just a small taste of what Homes First, a Lacey-based provider of affordable housing, experiences every day, said chief executive Trudy Soucoup.
Starting four years ago, about the time that median home prices and rents began to rise significantly, the number of inquiries about affordable housing also began to increase. The volume of calls remains high, and the callers are becoming increasingly desperate, she said.
“That’s the most familiar thing we hear,” Soucoup said. “They are about to lose their home and where are they going to go?”
Or they are facing a rent increase that will make their home unaffordable, she said.
Before she found a place to live with Homes First, Pennie Breadmore, 51, of Lacey, who lives on social security disability benefits, rented a room in a house that cost $450. That single room now costs anywhere from $600 to $750, she said.
“Thurston County is much better than some other counties when it comes to affordable housing resources, but still, it’s just crazy,” she said. “The demand (for affordable housing) is intense.”
Soucoup said Homes First has 43 properties with 250 residents but the number of calls for housing far exceeds supply. She said they turn away about 800 callers a year.
How we got here
During the Great Recession, home prices and rents fell as the number of unemployed grew. It also slowed residential construction of all kinds, so that when a stronger economy and demand returned, median prices and rents on the stalled inventory of homes started to rise.
Some numbers over the past 10 years, according to Thurston Regional Planning Council data.
• Median home prices since 2008: Up 43 percent, from $221,962 to $315,800.
• Average rents since 2008: Up 31 percent, from $919 to $1,208.
• Median household income since 2008: Up 3.2 percent, from $72,387 to $74,718.
Although the data show slow household income growth, the county still has the fifth highest median household income in the state, according to TRPC.
If you’re wondering how that stagnant purchasing power has translated into higher median prices, the answer is local home buyers aren’t necessarily the driving force. Median home prices are much higher in King, Snohomish and Pierce counties and those buyers have looked elsewhere, including Thurston.
“The strong job market, a recent dip in mortgage rates, and the most affordable home prices of Washington’s major I-5 counties are all contributing to strong buyer interest,” said Ken Anderson, president and owner of Coldwell Banker Evergreen Olympic Realty in Olympia, last month.
TRPC also tracks housing affordability, which is benchmarked at 100. Anything more than 100 is considered increasingly affordable, while below that number is less so.
For the first quarter of 2019, the county’s overall housing affordability index was 127.
One reason that number is higher is because it takes into account those who have sold a home before and now have a nest egg for that next purchase, said Katrina Van Every, a senior planner with TRPC.
However, for first-time buyers in 2019 it rated a challenging 59.9. And that turns prospective buyers into renters, which creates more demand and higher rents.
And those increasing rents have the biggest effect on people at the low end of the socio-economic spectrum, who are struggling just to earn enough to afford a tiny apartment.
On Friday, the National Low Income Housing Coalition released new numbers showing how much a tenant must earn to afford a two-bedroom apartment in Washington’s cities and counties. In Thurston County, that number is $22.15 per hour — more than $10 per hour more than the $12 minimum wage. About 36 percent of Thurston County residents are renters, and they make a mean wage of $14.50 per hour — only enough to afford $754 in rent, well below the $1,208 average rent here.
The wage numbers are even more grim in Pierce County, where the necessary wage is $24.33, and King and Snohomish counties, where it is a jaw-dropping $36.52 per hour. Those numbers are what’s driving more people south to Thurston, increasing demand for those already hard-to-find affordable apartments.
How have Olympia, Lacey and Tumwater responded?
Thurston County’s cities have begun to look at ways to provide relief.
The city of Olympia has responded in a number of ways, including increasing housing options through an approach, viewed as controversial by some, called missing middle. Those new policies loosen requirements for adding smaller sub units of housing in single-family neighborhoods.
There’s also Merritt Manor, which Soucoup said is a partnership between a private developer, the city and other organizations, including Homes First and commercial real estate company Prime Locations.
The development is not public housing, she said. It will cater to a generalized workforce — teachers, baristas, construction workers — who may not earn the county’s household median income. Qualifying applicants will make about 80 percent of that median wage, Soucoup said.
Merritt Manor is the first Olympia project to receive a 12-year multifamily tax exemption, she said.
In Lacey, the City Council has waived building permit and other construction-related fees for Habitat for Humanity and other community-based housing development organizations.
And in Tumwater, in addition to what the state Legislature has done to protect tenants’ rights by extending eviction notices, the City Council in March had an early-stage discussion about “potential actions that could be taken on a regional or city-by-city basis to address tenant protection issues.”
An Olympia City Council committee had a similar, early-stage discussion in April.
Soucoup looks forward to Merritt Manor being successful and stabilizing for its tenants.
“They won’t be on the street, they won’t be in a shelter, they won’t be paying 60 percent of their income toward rent,” she said.
