Megatrends Squeeze Housing Supply in Spokane
Amanda Beck, Assistant Planner II, 509.625.6414
Thursday March 10, 2022 at 2:28 p.m.
Why is housing getting expensive in Spokane?
Organizations in the Interior Northwest are working hard to address the current housing affordability crisis. The city’s effort to shape housing in Spokane is an extension of the Housing Action Plan 2020 and focuses on some of the smaller projects and the following recommendations for solutions such as backyard apartments and new land. But why is the City considering these solutions for the housing supply? There are several economy-wide and local reasons why housing is becoming more expensive, both across the country and in Spokane. Here are three major trends.
The gap between income and house prices
Americans experienced wage growth from the 1960s until 2008. This means that when adjusted for inflation, wages rose, as did the purchasing power of a household. Since 2008, wage increases have not risen enough to keep purchasing power above inflation, or an increase in living standards.
What it looks like locally is that between 2012 and 2018 the the median household income increased by 21.2%, while from 2010 to 2020 the median house price increased by 47%, from $174,000 to $256,000. Median renter income increased 20.7% from 2012 to 2018, while the average rent for a two-bedroom apartment in Spokane increased 11.2% from $972 to $1,081 from 2010 to 2020. Although the increase in tenant income is positive, it can also be a start. warning sign that low-income households stay longer in the rental market because they are out of the homeownership market.
Population growth and house building lagging behind
After the financial crash of 2008, housing construction lagged nationally and locally. The construction of single-family and multi-family residences has not kept pace with population growth over the past decade. The COVID-19 pandemic has also caused problems, with developers facing steep increases in building materials, supply chain snarls, or delayed work due to pandemic-related shutdowns.
The lagging construction of single-family homes and multi-family dwellings is complicated by population growth. Between 2010 and 2020, Washington State grew by more than 931,000 people, with an influx of more than 500,000 people from out of state. At the time, Spokane’s population has grown by more than 7%, making Spokane the second largest city in the state..
With more people looking to buy fewer homes, buyers end up looking for lower-end products. Buyers in higher price ranges bid for lower-tier homes after failing to secure a home in their preferred range. The domino effect of each step of the income scale being compressed by the top means that the households with the lowest incomes are left behind. This suggests that more housing at all income levels is needed to address our housing shortage.
Spokane is always close to nature, close to perfection
As a mid-sized city, Spokane often ranks well for quality of life, jobs, and amenities. Spokane has 87 city parks and five community centers, with more than 4,100 acres of protected green space. Through the Voter-Approved Library Link, the city’s library system is modernizing with three new libraries and renovations to the other four libraries that serve as community anchors throughout the city. For Top Places in American News 2021-2022, Spokane ranked 78th nationally, including 101st for Best Places to Retire, and Out of 150 Subways, Spokane ranked 3rd as the Best Place to Retire. live if you are concerned about climate change. In 2021, Best Cities ranked Spokane 64th and the only other city in Washington besides Seattle (14th).
An influx of people into our region means more opportunities and a stronger economy for everyone – a greater labor pool for growing businesses, entrepreneurs looking to start new businesses, artists which can add to Spokane’s arts and culture scene. It’s a good thing as long as there are enough houses for everyone who wants to come here.
Spokane’s quiet neighborhoods pair well with our diverse downtown, with infrastructure and support for local entrepreneurs to thrive. It’s not hard to see why people enjoy Spokane’s small-town vibe with its big-city amenities and businesses that are unique to 509.
Will the proposed rule changes be enough to facilitate the construction of backyard cottages, such as secondary suites, and other smaller housing options? Learn more and have your say on the Shaping Spokane Housing webpage.