Thurston report shows disconnect between housing built and residents’ needs
New housing construction is not meeting residents’ needs, according to a 2020 report released this fall by the Thurston Regional Planning Council (TRPC).
The Housing Needs Assessment tells a story of how the region’s housing has evolved over the last 40 years, with Olympia being emblematic of the changes.
Households have gotten smaller and taken new shapes, spurring a demand for smaller housing units and pushing individuals into house shares and other more social arrangements. Yet, new houses are only getting bigger: The average new home being constructed is now more 2,000 square feet — 25% larger than it was in 1980.
The widening gap between household size and house size leaves a growing unmet need for studios and 1- and 2-bedroom units, most of which are now rentals.
While the county’s housing is becoming more dense, it’s doing so unevenly. A significant number of multifamily housing units have been built in Olympia, but so-called “middle housing” — duplexes, triplexes, fourplexes — is still relatively scarce.
And as prices continue to rise, the lack of affordable housing for lower-income households is creating rent burdens for more than 25,000 households and undermining the success of programs such as rapid rehousing, which aim to transition people out of homelessness.
What does ‘affordable’ mean?
The report fills in the details of an unavoidable fact: Thurston County needs much more affordable housing.
The need is greatest for the 9,000+ households in Thurston County making less than 30% of area median income (AMI), which in Thurston County is $21,000. About 75% of these households are cost-burdened, meaning they pay more than 30% of their income to rent.
But it’s not just the lowest-income households who struggle to find affordable housing. The report shows that the majority of families are cost-burdened until they make 80% of the median income, or $55,500, in Thurston County.
Median household income means that half of households earn more and half earn less — but incomes in Olympia skew lower than the county as a whole: Almost half — 45% or 5,420 of Olympia households — have an annual income of less than $35,000.
For the 25,000 households making under 80% of the median income, homeownership — and thus the potential for intergenerational wealth-building — is not even a consideration, leaving them with a rental market that’s not well-suited to their needs.
To avoid cost-burden at that income level, the maximum affordable rent would be $900 per month, or $500 per month for those at the lowest income bracket. The average rent in Thurston County right now is about $1,200.
Do small households require small homes?
Over the past four decades, Thurston County has gone from a place dominated by nearly 75% nuclear families to one where more varied arrangements — including individuals living alone, single-parent households, and people living with roommates — account for half of all households.
Olympia has changed the most of any city, with an equal number of people now living alone (36%) as in married couples (37%) — and twice as many roommate households (12%) as Lacey (6%). It also has become the only renter-majority city, with 54% renters.
Across the county, households of all types are getting smaller: 65% of households consist of one or two people (in Olympia it’s closer to 75%) and the average household size has shrunk from 3.1 in 1970 to 2.5 today.
Despite these trends, the private market continues to produce larger and larger housing units. In the 1980s, the majority of new homes built were less than 1,500 square feet. Now only 11% of new homes are.
For those lucky enough to be in a position to buy, most of what’s available are three- and four-bedroom homes.
Smaller homes are predominantly rentals (68%): there are only about 4,800 owner-occupied two-bedroom houses in the entire Olympia-Lacey-Tumwater area, and it’s unclear how many of them are on the market at any given time.
“If you’re a new family or young person looking to build equity, there’s not a lot of affordable homes — which tend to be smaller — out there,” Michael Ambrogi, Senior GIS Analyst for TRPC, told the Olympia Land Use Committee. “There’s a lot of competition for those smaller homes.”
But are smaller houses necessarily the answer to smaller households?
“I don’t think it’s a fact that follows that we need more small units because we have more small households,” said Olympia council member Clark Gilman at an October Land Use and Environment Committee meeting where TRPC presented the report.
Gilman pointed to a “distribution problem” exemplified by his own situation as a “baby boomer at the end of a mortgage,” who is living in a house that’s bigger than he needs but costs him less than renting.
A solution would be encouraging more forms of social housing, he said.
“Both elders and students may choose other forms of living, rather than hoping to create tiny units, SROs or micro apartments or whatever, that we might be encouraging other forms of social housing,” Gilman said.
The middle is still missing
The report estimates that 34,000 more housing units will be needed in the next 25 years to accommodate population growth.
Although Olympia has densified rapidly in the last 20 years — the average number of units per acre has more than doubled, from 6 to 15 — the majority of the housing stock in the urban area (64% or 32,418) remains single family homes, whether detached or attached (townhouses).
Construction patterns are trending towards more multifamily developments, although it’s unclear how much of that is townhomes, which TRPC includes in the definition of “multifamily” but counts elsewhere as single-family homes.
Despite persistent concerns from homeowners’ groups that policies and zoning to encourage duplexes, triplexes, and fourplexes would rapidly change the character of neighborhoods once restricted to single-family homes, the report shows that so-called “middle housing” is still scarce across the county.
Duplexes, triplexes, and fourplexes make up just 9% (or 4,645) of the housing units in Thurston County’s urban core. Multifamily apartment buildings (defined as five or more units) are more than twice as prevalent (11,134), and the majority of those are in Olympia (6,493).
That may change soon: A recent ordinance passed in early December effectively ends single-family zoning across much of the city and will open up R 4-8, Olympia’s largest single-family zone, to duplexes, triplexes, and fourplexes.
Manufactured homes a crucial form of affordable housing
Though Olympia has the most middle and multifamily housing, it has the least percentage of one often-overlooked yet crucial type of affordable housing: mobile and manufactured homes. The city has just 659, nearly the same amount as the much smaller city of Tumwater, with 649.
Most of the county’s nearly 10,000 units of mobile and manufactured housing units are in the unincorporated areas.
These units have a complex and contradictory function: In one sense, they offer the possibility of homeownership to low-income seniors in an otherwise increasingly out-of-reach marketplace.
Nearly 75% of them are owner-occupied, a higher percentage even than single family homes (71%) — yet these homeowners’ often live in parks of 10 or more other homes where they do not own the property their houses sit on, making them vulnerable to displacement if the property changes hands or is redeveloped.
A dearth of subsidized housing
Very little subsidized housing exists, and what does takes multiple different forms. Many of Thurston County’s 1,857 subsidized units are produced by private developers using government tax credits to include affordable housing in their projects (845 units). The Housing Authority of Thurston County owns 537 units, and nonprofit affordable housing providers operate 475 units.
HATC has just under 2,000 federal Section 8 vouchers (some of which are used by residents of those privately developed apartments).
Currently thousands of people are waiting for vouchers, with thousands more hoping for a spot on the waitlist, which last opened in 2019 and opens roughly every five years. Research has shown that nationally, the Section 8 program serves only 25% of people who are eligible for vouchers. President-elect Joe Biden has proposed to fully fund housing voucher programs for all who qualify.
Programs like rapid-rehousing vouchers can help people move out of homelessness, but the constraining variable is the lack of availability of permanent affordable housing. Only about 25% of people served by the county’s housing programs — such as rapid rehousing vouchers — successfully transitioned into a permanent housing situation.
The Housing Action Plan
The solution to this is, of course, more affordable housing. The report calls for two types specifically:
- Permanent supportive housing (defined as low-barrier permanent housing paired with supportive services); and
- Affordable housing for the lowest income bracket, households making under 30% of the median income, who are the most likely to be cost burdened and at highest risk of slipping into homelessness.
According to a 2018 study of behavioral health facilities by the state Office of Financial Management, the Thurston-Mason County region combined has only 139 supportive housing beds, the least of any of the 10 regions studied and by far the least per capita.
This number is set to increase in coming years: Interfaith Works’ 2828 Martin Way project, scheduled to be complete in 2022, will add 65 units of permanent supportive housing, a nearly 50% increase over current capacity.
The report is part of the regional housing action plan, a coordinated effort between the cities of Tumwater, Lacey, and Olympia along with TRPC that was funded by House Bill 1923, which offered funding to cities to take actions to increase residential building capacity.
The next steps are renter and landlord surveys that seek to better understand housing costs and distribution, and a list for specific actions the region can take to increase housing supply.
An online community forum will be held at 5 p.m. Jan. 13, where the public can ask questions about the report and the regional plan. Participants are required to register in advance through the TRPC website.
This story was originally published December 27, 2020 at 5:45 AM.
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