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East King County Housing Analysis Pursuant to RCW 36.70A.070(2), Growth Management Act of Washington. [Substitute cover sheet with city’s logo.] 1/6/2012 ---PAGE BREAK--- Housing Analysis I-2 January, 2012 Table of Contents List of Charts and Exhibits I-3 I. EAST KING COUNTY NEEDS ANALYSIS I-4 INTRODUCTION I-4 HOUSING NEEDS I-5 Population Growth I-5 Household Types I-5 Household Sizes I-5 Senior Population I-6 Ethnicity/Immigration I-6 Household Incomes and Cost-burdened Households I-7 Local Employment I-9 Persons with Special Housing Needs I-11 HOUSING SUPPLY I-13 General Housing Stock I-13 Housing Targets / Housing Capacity I-17 SUMMARY FINDINGS I-19 II. NEEDS ANALYSIS SUPPLEMENT: SAMMAMISH LOCAL DEMOGRAPHIC HOUSING DATA NEIGHBORHOOD CONDITIONS SUMMARY OF LOCAL HOUSING STRATEGIES OVERALL RESULTS III. APPENDIX A-1 ---PAGE BREAK--- Housing Analysis I-3 January, 2012 List of Charts and Exhibits CHART TITLE PAGE 1. HOUSEHOLD TYPES, E. KING CO. CITIES, 2010, AND HOUSEHOLD TYPES, KING COUNTY, 2010 I-5 2. POPULATION AGE, 2010 I-6 3. HOUSEHOLD INCOMES, 2009 (ACS) I-7 4. COST–BURDENED (35%) HOUSEHOLD BY HOUSEHOLDER AGE AND TENURE, EAST KING CO. CITIES, 2009 ACS I-8 5. JOBS–HOUSING BALANCE RATIO: DEMAND TO SUPPLY OF HOUSING, 1970 – 2006 I-9 6. AVERAGE PRIVATE-SECTOR WAGES, 2008 I-10 7. PERCENTAGE OF LOCAL JOBS HELD BY SAME-CITY RESIDENTS, 2000 I-10 8 CAUSES OF HOMELESSNESS, 2007 I-12 9. HOUSING UNITS PER BUILDING, EAST KING CO. CITIES I-13 10-A. AFFORDABLE AND ACTUAL AVERAGE RENTS I-15 10-B. CHANGE IN HOUSEHOLD INCOME, SALES PRICES AND RENTS SINCE 1999 I-15 10-C. AVERAGE SALES PRICES OF SINGLE-FAMILY HOMES (INCLUDING CONDOS) I-15 10-D. AFFORDABLE AND ACTUAL AVERAGE SALES PRICES OF SINGLE-FAMILY DETACHED HOMES AND CONDOS, EAST KING COUNTY CITIES I-15 11. PROGRESS TOWARD 1992–2012 AFFORDABLE HOUSING TARGETS, 1993–2008 I-18 12. HOUSING CAPACITY AS PERCENT OF 2006–2031 HOUSING TARGETS I-19 ---PAGE BREAK--- Housing Analysis I-4 January, 2012 I. EAST KING COUNTY NEEDS ANALYSIS INTRODUCTION Under the provisions of the Growth Management Act, each housing element is to “include an inventory and analysis of existing and projected housing needs that identifies the number of housing units necessary to manage projected growth.” Further guidance on preparing a “needs analysis” is provided in the Countywide Planning Policies. The goal of this East King County Needs Analysis is to provide all ARCH (A Regional Coalition for Housing) member cities with consistent data and analysis which will inform and assist in the updates of local comprehensive plans. The housing needs analysis should inform readers as to the specific needs that they can expect to exist within the forecast population. It is also intended to help understand who lives and works in East King County in order to inform our individual cities and overall sub-region’s existing and projected housing needs. Cities in East King County have created a partnership through ARCH to help them better address local housing needs. This partnership of cities has acknowledged that they are all part of a larger contiguous housing market with common issues facing many member cities. This needs analysis has been organized to reflect this partnership and recognize the many common housing market conditions and needs. Along those lines this document is organized into three sections: East King County Report. This report highlights the key demographic and housing information for East King County. Much of the information in this section is provided at the sub-regional level with some mention where cities vary significantly from East King County averages. City Summary Report. A separate report is also provided for each city that is a member of ARCH. This report highlights: where an individual city’s conditions vary significantly from the results reported in the East King County report; unique characteristics of the city that impact local housing conditions; and local efforts made in the past to address local housing needs. Housing Needs Analysis Appendix. The appendix includes a wider range of demographic and housing related data, including more detailed tables for all the information provided in the sub-regional and city summary reports. Most data is provided at the city, sub-regional and countywide level. There are several elements of the East King County needs analysis. The first part, Housing Needs, provides demographic and other information for local residents. It also includes information regarding the local workforce. This information helps to define the demand for housing in a community. The second part, Housing Supply, looks at the type and affordability of existing housing in the community. The third part, Summary Findings, identifies areas of needs by comparing demand—for various housing types and affordability levels for existing residents and employees and projected growth—with existing and projected housing supply. ---PAGE BREAK--- Housing Analysis I-5 January, 2012 HOUSING NEEDS Population Growth Population in East King County has grown more than 15% between 2000 and 2009. This growth is more than double the rate of Seattle nearly one and a half times that of the King County average and greater than the state population growth rate of 13%. The cities in East King County with the highest proportion of population increase included Issaquah, Redmond, Sammamish and Newcastle, while the population of Mercer Island and the “Point Cities” (Medina, Clyde Hill, Yarrow Point, Hunts Point, Beaux Arts Village) remained essentially unchanged. (See Exhibit A in the Appendix.) Household Types The mix of household types at both the County and East King County level, have remained essentially the same since 2000 (Chart Compared to countywide, East King County has a larger proportion of married households. Similarly, Eastside cities have not seen a significant change in their mix of household types from 2000 levels. (See Appendix, Exhibit Most East King County cities have a similar mix of household types, with the notable exceptions that Sammamish and the Point Cities have high proportions of married with children households, and Kirkland and Redmond have high proportions of one-person households. One-person households and married couples without children compose 57% of East King County households. Sammamish, at just over 40%, is the only Eastside city with less than 50% of households in these two categories. Household Sizes Based on the household mix, it is not surprising that 64% of Eastside households have one or two people. Thirty percent (30%) have household size of three or four-persons and only 7% are CHART 1 Source: U.S. Census Bureau (2011) Living Alone, 27% Married, No Children at Home, 29% Married, Children, 26% Single Parent, Children, 6% Other Households, 13% Household Types, E. King Co. Cities, 2010 Living Alone, 31% Married, No Children at Home, 25% Married, Children, 20% Single Parent, Children, 7% Other Households, 17% Household Types, King County, 2010 ---PAGE BREAK--- Housing Analysis I-6 January, 2012 larger than four people. (See Appendix, Exhibit One- person households are more likely to be seniors, or living below the poverty level. Senior Population Unlike the period from 1990 to 2000 which saw a percentage increase in seniors, especially over the age of 75, the percentage of senior residents has remained relatively stable since 2000 (about 12%). Relative to the East King County average, Bellevue, Mercer Island and the Point Cities have a relatively high proportion of seniors, while Sammamish, Newcastle and Redmond have a relatively low proportion of seniors. (See Appendix, Exhibit Seniors remain about equally split between seniors aged 65 to 75, and those over age 75. This could be implying that the increasing senior population resulting from longer life spans may be beginning to flatten out. However, as shown in Chart 2, the ‘Baby Boom’ will be entering the 65- to 75-year age group in the next decade. The Area Plan on Aging (Aging and Disability Services, 2007) predicts that residents over age 60 could make up almost a quarter of East King County’s population by 2025. Ethnicity/Immigration Ethnic mix in East King County has seen significant shifts over the past 20 years. Minority populations have gone from just over 10% in 1990 to 32% in 2009 (Appendix, Exhibit A large portion of this increase has been due to increases in Asian population. Since the early 2000s there has also been a large proportional increase in Hispanic population, though the percentage of Hispanics is significantly less than Asian population. By comparison, the African- American population has remained proportionately stable countywide, and in East King County has remained at a relatively low proportion of 2% of the population. Foreign-born and Linguistically Isolated1 Populations: A high proportion of the increase in minority population correlates to a large increase in foreign-born residents (Appendix, Exhibit This can lead to a higher number of linguistically isolated 1 The Census Bureau defines a linguistically isolated household as on in which no one 14 years old and over speaks only English or speaks a non-English language and speaks English "very well." CHART 2 Source: U.S. Census Bureau (2011) 0% 5% 10% 15% 20% 25% < 5 5-19 20-34 35-44 45-54 55-64 65-74 75 + Years of Age Population Age, 2010 EKC cities King County ---PAGE BREAK--- Housing Analysis I-7 January, 2012 residents who typically earn less, are at a higher risk of becoming homeless, and can experience difficulties finding and obtaining affordable housing and information about affordable housing opportunities. There has been a steady increase in the number of linguistically isolated individuals in East King County. However it is about half the proportion of countywide figures. Household Incomes and Cost-burdened Households Household Income. Overall, household median incomes are higher in East King County cities than the countywide average. In terms of understanding housing demand, it is more relevant to look at the cross section of household incomes (Chart This evaluation shows that approximately 18% of all East King County households earn under 50% of median income (low-income, $42,800 for a family of 4 in 2010. See Appendix, Exhibit S for more detail). Of those about half earn less than 30% of median income. An additional 16% earn between 50% and 80% of median income (moderate- income, $68,480 for a family of 4 in 2010). While significant levels, both of these figures are lower than countywide figures. Middle-income households (80% to 120% median income) make up another 18% of households, which is similar to countywide figures. Compared to 2000, there has been an increase in the proportion of low-income households, and a small decrease in the proportion of moderate- and middle-income households (Appendix, Exhibit Lower income households are more likely to be households headed by persons under 25 years of age, or to a lesser extent, above 65 years of age. Poverty Level.3 Approximately 5% of households in East King County have income below the poverty level, compared to 12% in Seattle and 9% countywide. Poverty levels have increased 2 “2009” data from the U.S. Census Bureau refers to the American Community Survey, five-year averages of 2005-2009. It is the latest dataset from the Census Bureau that reports this data for city geographies. 3 Households are classified as poor when the total income of the householder’s family is below the appropriate poverty threshold. The poverty thresholds vary depending on three criteria: size of family, number of related children, and, for 1- and 2-person families, age of householder (U.S. Census Bureau). CHART 3 Source: U.S. Census Bureau (2010)2 0% 10% 20% 30% 40% 50% 60% Percent of Households Percent of King County Median Household Income Household Incomes, 2009 ACS EKC cities King County ---PAGE BREAK--- Housing Analysis I-8 January, 2012 from about 4% in 2000, a similar level of increase as countywide. Poverty levels range from as low as 3% in Issaquah, Mercer Island Sammamish and Point Cities, to as high as 8% in Kenmore. These households live predominantly in rental housing, are less likely to be families versus other types of households, and more likely to be seniors. (See Appendix, Exhibit Cost-Burdened Households. Cost-burdened households are those that pay more than 30% of their income for housing. Overall, about 34% of all households in East King County are cost- burdened. This is less than countywide figures. (See Appendix, Exhibit In East King County, rates have increased somewhat since 2000, especially for homeowners, which could be explained by the large increase in home prices relative to median income. Percentages of cost-burdened households increased at a greater rate countywide. Most significantly, a much higher proportion of lower income households—75%—are cost- burdened, compared to fewer than 10% of higher income households. A somewhat higher proportion of renter versus owner households (38% versus 31%) are cost- burdened. Though the number of cost-burdened households is spread throughout all age groups, a higher proportion of young households and senior households are cost-burdened (Chart Severely Cost-Burdened Households. Households who pay over 50% of their income for housing are considered severely cost-burdened. About 14% of all East King County households are severely cost-burdened. About one-third of cost-burdened homeowners are severely cost- burdened, while about one-half of cost-burdened renter households are severely cost-burdened. (See Appendix, Exhibit CHART 4 Source: U.S. Census Bureau (2010) 0% 10% 20% 30% 40% 50% 60% 15 to 24 25 to 34 35 to 64 65 or older Percent of Households Age of Householder Cost-Burdened (35%) Households by Householder Age and Tenure, East King Co. Cities, 2009 ACS Owners Renters ---PAGE BREAK--- Housing Analysis I-9 January, 2012 Local Employment Jobs-Housing Balance. A primary driver of the demand for housing is the local workforce. Many of the cities in East King County and East King County as a whole over the last 30 years have transformed from suburban “bedroom” communities to employment centers. This workforce can impact the local housing market in several ways. First is the overall demand for housing. Chart 5 shows that East King County and many of its cities have a greater demand for housing resulting from employment than there is housing available (“jobs-housing balance”). While the last eight years has seen some stabilization in this ratio of demand for housing from employment, it is still relatively high. When planned for employment and housing growth is added to existing levels, the cumulative impact could further increase the imbalance of housing to employment in East King County (Appendix, Exhibit Local Salaries. A second important driver of housing demand is how well the supply of housing matches the profile of the local workforce, both in terms of the type and affordability of housing. A common perception is that local employment is skewed toward higher paying technology related jobs. East King County does have a relatively high proportion of tech jobs (57% versus 43% countywide), and represents the sector with the highest employment growth CHART 5 A ratio greater than 1.0 means that local employment generates a demand for housing greater than the number of housing units. Housing demand is estimated by 1.4 jobs per household. Source: ARCH. 0.0 0.5 1.0 1.5 2.0 2.5 3.0 Ratio Jobs-Housing Balance Ratio: Demand to Supply of Housing, 1970 - 2006 1970 1980 1990 2000 2006 ---PAGE BREAK--- Housing Analysis I-10 January, 2012 over the last 10 years in East King County. In particular, 70% of Redmond’s jobs are service sector jobs, and have an average salary twice the countywide average. But for the other two-thirds of service sector jobs in the rest of East King County, average salaries are comparable to county wide salaries (Chart In addition, other than the WTU sector (wholesale, transportation and utilities), average salaries in cities for the balance of jobs are at, or in many cases, less than countywide salaries for similar sector jobs (Appendix, Exhibit In other words, while 25% of jobs in East King County have salaries relatively high compared to countywide salaries for similar jobs, 75% of jobs have similar or lower salaries than countywide averages. Relationship to Commuting. An indirect impact of this balance between the local workforce and housing supply can be an impact on local transportation systems and potentially economic development. Commute patterns in East King County appear to support the data on jobs-housing balance described above. In 2000, the majority of people that worked in East King County lived outside of East King County (Chart This compares to almost 75% of workers in Seattle living in Seattle. One question this leads to is who is commuting and why? How much is it a choice versus an economic decision? Overall housing costs and resident median income are relatively high in East King County, though many jobs have similar salaries as countywide averages. In looking at local housing costs and the number of cost-burdened households in CHART 6 Source: Puget Sound Regional Council (2009) CHART 7 Source: U.S. Census Bureau (2002). $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 Average Private-Sector Wages, 2008 Eastside Cities King County 0% 10% 20% 30% 40% 50% 60% 70% 80% Bellevue Bothell Clyde Hill Issaquah Kenmore Kirkland Medina Mercer Island Newcastle Redmond Sammamish Woodinville EKC Cities Seattle Percentage of Local Jobs Held by Same-City Residents, 2000 ---PAGE BREAK--- Housing Analysis I-11 January, 2012 East King County, it is a fair assumption that a large number of employees find it difficult to live in East King County. This type of situation where workers may “drive to qualify” has led to increased interest in accounting for both housing and transportation expenses when considering overall housing affordability. There have been attempts to develop an index that measure these combined costs. Time and money spent on commuting have financial and quality of life impacts on household, as well as potentially impacting the ability to recruit qualified workers. This could be particularly true for employers such as hospitals and school districts being able to recruit or retain employees for positions that have similar pay in different regions. Persons with Special Housing Needs Within any population there are smaller sub-groups that have additional needs, especially related to housing with appropriate services, affordability, or both. This includes seniors, persons with disabilities, and the homeless. Given the size of these populations, their needs are typically described on a more regional level, but needs to some degree exist in all communities. Following is some information to give perspective on these needs in East King County. Supplemental Security Income (SSI). One indicator of persons with special needs are persons receiving Supplemental Security Income (SSI), which provides a minimum level of income for needy aged, blind, or disabled individuals. Overall, about 2,700 households in East King County receive SSI (Appendix, Exhibit At 1.8% of total households, this is lower than the 2.9% countywide average. Communities with high proportion of households receiving SSI include Kenmore and Kirkland, and those with lower proportion of seniors typically having smaller proportions. Group Quarters. Another indicator of residents with special needs is persons who live in group quarters.4 This is consistently less than one percent of the population of Eastside cities. The percentages are higher in the rest of King County and Washington (1.5% to (See Appendix, Exhibit Homelessness. In 2005, government officials, funders, homeless people, and housing and service providers initiated a plan to end homelessness in King County in ten years. It has galvanized efforts to improve housing and services for homeless people, resulting in significant increases in housing targeted to the homeless. As part of that effort, the Eastside Human Services Forum and Eastside Homeless Advisory Committee created a plan targeting the needs of homeless in East King County. The report includes data on the causes of homelessness (Chart with 52% indicating the primary cause is the lack of affordable housing. The report estimates 4 A group quarters is a place where people, usually unrelated to one another, live or stay in a (home) that is owned or managed by an entity or organization providing housing and/or services for the residents… These services may include custodial or medical care as well as other types of assistance, and residency is commonly restricted to those receiving these services. Group quarters include such places as college residence halls, residential treatment centers, skilled nursing facilities, group homes, military barracks, correctional facilities, and workers’ dormitories (U.S. Census Bureau). ---PAGE BREAK--- Housing Analysis I-12 January, 2012 a need for 820 units to serve single adults, 930 units for families, including 75 for victims of domestic violence, and 96 for youth and young adults. Each of these populations can have different needs, so different types of housing and services are appropriate. Since 2005, close to 300 new units have been created for the Eastside, more than doubling the 229 that existed prior to the 10- Year Plan to End Homelessness (Committee to End Homelessness in King County, 2005). (See Appendix, Exhibit P-4.) Reports such as those prepared by school districts (reports on homeless students) and the One- Night Count help to track results of local efforts. The state Superintendent of Public Instruction’s report for the 2009-10 school year showed a 41% increase in homeless students in East King County schools from the 2006-07 school year (614 students, up from 436; Appendix, Exhibit The One-Night Count has showed an overall decrease in homeless persons found unsheltered over the last two years. These reports show that while progress is being made, there are still a significant number of homeless persons in our cities. CHART 8 Causes identified by case managers at Sound Families intake. Families could list more than one cause of homelessness. Source: Eastside Human Services Forum (2007). 0% 10% 20% 30% 40% 50% 60% Causes of Homelessness, 2007 Eastside Homeless Families ---PAGE BREAK--- Housing Analysis I-13 January, 2012 HOUSING SUPPLY This section discusses the existing housing supply in East King County and how the supply of residential housing has changed over time. It includes information on the type and cost of existing housing, capacity for new housing, and targets for new and affordable housing. General Housing Stock Type and Cost. The most basic distinction in housing is if it is single-family, multi-family or manufactured housing. Chart 9 shows that the proportion of single-family homes in East King County has decreased about 5 percentage points over the last 20 years, with a proportional increase in multi-family housing, primarily in developments with more than 20 units. This trend is fairly consistent among ARCH cities, and is consistent with local policies to encourage new development in their centers and preserving existing single-family areas. Homeownership Rates. Over time, the rate of homeownership in East King County (64% in 2009) has generally been higher than the countywide average (61% in 2009), and has followed trends similar to countywide/national trends. (See Appendix, Exhibit Homeownership rates decreased in the 1980s, followed by increases into the early 2000s, and then decreases in recent years, the overall result being a slight decrease in ownership rates from 1980 to present. This overall trend appears to be as much due to national financial policy as local policies or housing supply. Among East King County cities, the two cities that buck this trend are Issaquah, which saw its ownership rate go from less than the countywide average to more than the countywide average, and Redmond, which experienced the opposite. Condominiums. The continued strong ownership rates in the midst of shifting housing type are explained by another shift in the past 20 years. In the past, multi-family housing was synonymous with rental housing. Increasingly over the last ten to 20 years, however, multi-family housing includes ownership housing, both through new construction, as well as conversion of existing rental housing. ARCH has surveyed new multi-family housing over the last 15 years, and approximately 37% of new multi-family housing surveyed were condominiums, ranging CHART 9 Source: U.S. Census Bureau (1992, 2002, 2010). 0% 10% 20% 30% 40% 50% 60% 1, detached 1 to 19, attached 20 or more Other (incl. MH) Housing Units per Building, East King Co. Cities 1990 2000 2009 ACS ---PAGE BREAK--- Housing Analysis I-14 January, 2012 from 17% in Mercer Island to almost 47% in Issaquah (Appendix, Exhibit Condo conversions were very popular in the mid-2000s but essentially stopped after 2008. While they generally provide one of the most affordable types of ownership housing, they also result in the loss of rental housing that is typically affordable at lower incomes. Because they often do not require permits, it can be difficult to track the exact amount of conversion. A Dupre+Scott Apartment Advisors publication from 2008 reported that conversions hitting the King County market grew from 900 in 2003 to 1,800 in 2004, 3,600 in 2005, and more than 6,000 in 2006. But conversions fell to 2,800 in 2007 and just 168 units had converted or were scheduled to convert at the report’s publication date. New Housing Affordability. ARCH’s multi-family survey also evaluates the affordability of new multi-family housing. (New single-family housing has not been surveyed because new single-family homes are affordable to households having incomes greater than 120% of the median). Of surveyed units, about 15% overall were affordable at 80% of median income, and approximately 20% affordable at both 100% and 120% of median income (Appendix, Exhibit For the units affordable at 80% of median the majority were smaller (studio or one- bedroom) rental units. For individual cities, the percentage of new multi-family housing affordable at 80% of median ranged from 1% in Mercer Island, to approximately 46% in Kenmore. Housing Age and Condition. Overall, the housing stock in East King County is relatively new compared to Seattle. Seventy-five percent (75%) of housing in East King County was built since 1970, compared to 57% countywide and 36% in Seattle. The only East King County cities with a lower proportion of housing built since 1970 are Bellevue, Mercer Island, Kenmore and the Point Cities (Appendix, Exhibit More important in terms of local housing issues, however, is the condition of existing housing and the likelihood of redevelopment. Is reinvestment occurring as homes age? This is becoming a more important question in East King County because a larger proportion of homes is reaching an age (over 30 years old) where ongoing maintenance is more important and costly. Another increasing phenomenon in East King County is redevelopment of property. This can range from major remodels or rebuilding of single-family homes, to redevelopment of central areas with more intensive development. This type of reinvestment within communities is important to maintain the stability of the community as well as for cities to achieve their long term goals. In East King County, this issue seems to occur primarily in scattered locations or smaller localized areas, and not in large contiguous areas. Each of the city chapters of this document will include a section identifying particular areas of the community where general building condition or other factors suggest that redevelopment is likely to occur. Areas where this is occurring include older neighborhood shopping areas and existing manufactured housing communities. As cities plan to address these areas, another consideration is to what extent these areas currently provide relatively affordable housing, and will this housing be lost, or if efforts can be taken to preserve or replace affordable housing in these areas. ---PAGE BREAK--- Housing Analysis I-15 January, 2012 Housing Costs. Historically, costs of both rental and ownership housing have been higher in East King County than the countywide average, with the exception of sales prices in Kenmore and Bothell being somewhat below the countywide average (Appendix, Exhibit Charts 10A, 10B, 10C and 10D show changes in rents and sales prices since 2000 for East King County. This shows a period of widely fluctuating rents; but across the entire period from 2000 to 2010, rents rose about the same as median income and home prices increased more than median income. In general, price increases in individual cities have been similar, though with stronger than average increases in rents and home prices occurring in Mercer Island, Bellevue and Kirkland. Specialized Types of Housing. Of special note are a handful of housing types that increase housing options, meet a specialized housing need, or provide services to meet the needs of residents. Accessory Dwelling Units (ADUs). Over 500 accessory dwelling units have been permitted in East King County Cities, with the vast majority being permitted in Mercer Island, Kirkland and CHARTS 10 A, B, C, D Source: Central Puget Sound Real Estate Research Committee (2000–2010). $600 $700 $800 $900 $1,000 $1,100 $1,200 $1,300 $1,400 $1,500 $1,600 Affordable and Actual Average Rents Affordable at 80% Median Avg Rent, EKC Cities Avg Rent, King Co. Affordable at 50% Median 0% 20% 40% 60% 80% 100% 120% 140% 160% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Change in Household Income, Sales Prices and Rents Since 1999 Avg Sales Price, EKC Median Income, King Co. Avg Rent, EKC $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 Average Sales Prices of Single-Family Homes (Including Condos) Avg Price, EKC Cities Avg Price, King Co. Affordable Price at Median Income $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 Affordable and Actual Average Sales Prices of Single-Family Detached Homes and Condos, East King County Cities Avg Sales Price, SF Detached Avg Sales Price, Condo Affordable Price at Median Income ---PAGE BREAK--- Housing Analysis I-16 January, 2012 Bellevue (Appendix, Exhibit ADUs provide a relatively affordable form of housing for smaller households, which can also benefit existing homeowners and can be created at relatively low cost. Manufactured Housing. Manufactured housing is mentioned here because it provides a relatively unusual form of ownership housing, in many cases targeted toward senior households (Appendix, Exhibit In East King County it is a relatively small amount of the overall housing, with most located in the northern half of the area. Typically they are located in manufactured housing communities, and often located on leased land which can be threatened with closure. In addition, much of the manufactured housing stock is aged and can be challenging to maintain. In the last ten years, no new communities have been created, several smaller communities and one larger community (located in downtown Woodinville) have closed, and other closures have threatened. (ARCH members assisted preservation of one community in Redmond.) Adult Family Homes. Adult family homes are state-licensed facilities that are typically located in single-family homes. They serve two to six individuals and can provide services for a range of needs including dementia, developmental disabilities and mental health. While many primarily serve seniors, they can serve other populations with special needs. In 2010, there were approximately 375 licensed adult family homes in East King County serving over 2,100 persons, with over 70% in Bellevue, Kirkland and Bothell (Appendix, Exhibit Senior Housing with Services. There are a variety of facilities providing services to seniors including independent living, assisted living and nursing homes, with many facilities providing a variety of level of services. (This combination is known as “continuum of care.” For more information, see ARCH’s website at http://www.archhousing.org/current-residents/senior- housing.html.) In East King County, there are over 60 facilities with capacity to serve over 5,800 residents that are located through East King County. Based on survey information collected by ARCH, this includes a minimum of 1,750 new units permitted from 1995 to 2007 (Appendix, Exhibit Subsidized Housing. In East King County there are a total of about 7,500 publicly assisted housing units with long term affordability restrictions (Appendix, Exhibit This represents about 4.5% of the overall housing stock and is spread throughout East King County. They have been created through a variety of local, state and federal programs, including local incentive programs, and target a range of incomes up to 80% of median income. Almost 50% is either owned or administered by the King County Housing Authority (KCHA). Of these almost 1,500 are Section 8 vouchers which are used by individuals in privately owned housing. This is just under 20% of the total vouchers administered by KCHA countywide outside Seattle and Renton. One reason that a low proportion of vouchers are used in East King County is relatively high rents. A priority of ARCH and its members has been to preserve privately owned Section 8 “project-based” housing. Over the last 15-plus years, 485 units of privately owned, federally ---PAGE BREAK--- Housing Analysis I-17 January, 2012 assisted housing have been preserved long-term as affordable housing, with 140 units remaining in private ownership. Housing Targets / Housing Capacity Housing Targets. Each city has planning targets for overall housing, employment and affordable housing, which are updated every five years (Appendix, Exhibit The most recently updated targets are for the 2006–2031 planning period. Each city’s affordable housing targets are set as a percent of their overall housing target (24% for low-income and 18% for moderate-income). These percentages essentially correspond to the amount of additional low- and moderate-income households that will result from planned growth throughout the county. Progress toward Targets. In terms of overall housing development, all of the cities have been meeting, and generally exceeding, their overall housing goals (Appendix, Exhibit This has also been true countywide, even accounting for the downturn of recent years. Affordable Housing Targets. Cities have created affordable housing through a variety of means, including direct assistance ARCH Trust Fund, land donation, fee waivers), development incentives density bonuses, rezones, ADUs), and the private market. “New” affordable housing can involve creating new units or preserving existing housing with explicit long-term Progress Toward 1992-2012 Affordable Housing Targets, 1993–2010 CHART 11 Source: ARCH Actual Actual Actual Target Total Actual Target Total Beaux Arts 0 0 0 0 0 1 Bellevue 50 163 858 118 116 2,022 Bothell 7 29 115 45 20 715 Clyde Hill 0 0 3 0 0 4 Hunts Point 0 0 0 0 0 0 Issaquah 13 55 227 19 39 336 Kenmore 6 34 72 13 24 161 Kirkland 14 69 258 28 49 490 Medina 0 0 2 0 0 1 Mercer Island 4 19 61 13 14 219 Newcastle 2 12 22 1 8 17 Redmond 16 98 296 51 69 922 Sammamish 1 38 9 0 27 3 Woodinville 4 29 71 12 20 187 Yarrow Point 0 0 0 0 0 0 TOTAL 118 546 1,995 300 387 5,077 Pct of Goal 22% 78% Annual Averages Annual Averages Low-Income Housing Moderate-Income Housing (50% of Median Income) (80% of Median Income) ---PAGE BREAK--- Housing Analysis I-18 January, 2012 affordability. Chart 11 summarizes progress toward affordable housing goals of 1992. (See Appendix, Exhibit R for more detail.) This data shows that communities have used a wide range of approaches to create moderate-income housing and have cumulatively achieved moderate-income goals. Individual cities that have done better at meeting their moderate- income goals include those with active incentive programs, or where the market has managed to provide moderately priced units, which typically have been smaller (studio or one-bedroom) rental units. This points to the continued importance of cities working on a variety of strategies to increase the diversity and affordability of housing in their cities. Progress toward low-income goals has been more elusive. Cumulatively, cities have achieved just fewer than 30% of their low-income goals. Almost all of this housing has required some type of direct assistance. While progress toward goals has varied significantly from year to year, one trend appears to be achieving a lower proportion of the affordable housing goals over time. Possible explanations include the ARCH Trust Fund being relatively flat for the last ten years, while housing costs have increased; and newer multi-family housing being relatively more expensive than in the past. (See Capacity, below.) Capacity for Housing. Having sufficient land capacity for growth is the first step in being able to achieve future housing goals. This means in terms of overall capacity, as well as a diversity of CHART 12 Source: King County (2007b). 0% 50% 100% 150% 200% 250% 300% Bellevue Bothell Issaquah Kenmore Kirkland Mercer Island Newcastle Redmond Sammamish Woodinville Point Cities EKC cities Seattle King County Housing Capacity as Percent of 2006-2031 Housing Targets Net New Housing 2006-08 Single-Family Capacity Multi-Family Capacity Mixed-use Housing Capacity ---PAGE BREAK--- Housing Analysis I-19 January, 2012 capacity to meet the range of needs in the community including affordable housing. Based on information from the 2006 Buildable Lands report (King County, 2007b), Chart 12 summarizes each city’s housing capacity relative to their overall housing target, and also by type of housing (single-family, multi-family, mixed-use), with the following observations: Most cities have sufficient land capacity to meet their housing targets. Three cities do not show sufficient capacity (Kirkland, Mercer Island, Woodinville), but have taken action in recent years which could increase capacity in their centers enough to be able to meet their goals. Given costs of single-family housing, it is important to have sufficient zoning capacity for multi-family housing and other less expensive forms of housing ADUs) to plan for affordable housing goals. When accounting for recent actions by cities cited above, Sammamish adopting a town center plan in 2010 and Redmond updating the plan for the Overlake Urban Center in 2007, cities seem to have achieved that objective. Over the past decade, almost all cities in East King County have taken action to increase housing opportunities in their centers. As a result over 50% of future housing growth is planned for mixed-use zones. While this can be a way to create forms of housing not currently available in the community and create more sustainable development, the reliance on this development makes it imperative that these areas provide housing for a wide range of household types (including families), and affordability. Of note is that to date, new housing in these zones has been relatively more expensive than new housing in more traditional, lower density multi-family zones wood frame, surface parking). This places greater importance on cities being more proactive in these mixed-use areas to ensure that housing is developed, and to create affordable housing opportunities. Several cities have taken steps along those lines by actions such as using FAR (floor-to-area ratio) instead of unit density (encouraging smaller units), linking affordability to rezones or height increases, and offering incentives such as fee waivers and exempting property taxes for a period of time in exchange for affordability. SUMMARY FINDINGS Stabilizing/Maturing Communities. Demographically, we may be seeing signs of maturing or stabilizing communities. Demographic patterns in East King County cities are becoming more similar to countywide figures. Also, there were less significant shifts in items such as household type and senior population as there have been in previous decades. Senior Population. The proportion of seniors did not change over the last decade; however, seniors can be expected to increase in proportion over the next ten to 20 years. The potential relevance to housing is twofold. First, some portion of seniors have specialized housing needs, especially older seniors (over age 75), which are half of the senior population. Second, for seniors that rent, a relatively high proportion are cost-burdened. ---PAGE BREAK--- Housing Analysis I-20 January, 2012 Increasing Low-Income Population. The percentage of the population that is very low-income (under 30% of median income) and low-income (30% to 50%) has increased both in East King County and countywide. Jobs-Housing Balance. The jobs-housing “imbalance” creates an excess demand for housing relative to local supply. Based on future employment and housing targets, the relative demand for housing from employment could become even proportionately higher. The demand for housing from local employment not only puts pressure on the overall supply of housing, but also the diversity and affordability of housing to match the needs of the workforce. Rental Housing and Cost-Burdened Households. On the surface, data on rental housing can look encouraging. Average rents are affordable to moderate-income households, and over the past ten years rent increases have essentially matched increases in median income. However, a significant portion of renter households are very low-income or low-income, for whom the affordable supply is lower. This is reflected in the large portion of lower-income households that are cost-burdened. Also, relatively high rents in East King County may contribute to the relatively low portion of the East King County workforce that lives in East King County. Housing Capacity in Mixed-Use Zones. Much of the capacity for future housing growth is in areas zoned for mixed use. This can provide opportunities for creating more sustainable communities. But the first generation of housing in our urban centers has been relatively expensive compared to multi-family housing built in the past. These factors could place more emphasis on communities being more proactive in developing strategies to increase a range of types and affordability of housing in these centers. Single-Person Households. The high proportion of one-person households presents opportunities to explore less conventional housing types as a way to increase diversity and affordability. More efficient forms could range from ADUs to multiplexes and more innovative forms of housing, especially near transit smaller spaces, prefabricated housing). Ethnic Diversity. Increased ethnic diversity should lead to sensitivity in designing housing programs, especially for non-English speaking households. Homelessness. Recent one-night counts suggest that the 10-Year Plan to End Homelessness, a “housing-first” approach, and additional shelter capacity have had some effect on arresting growth in the number of unsheltered families and individuals countywide. Surveys indicate that homelessness is still a significant problem across Eastside communities, but working together has more than doubled the emergency shelter beds and service-supported housing units in just five years. Progress against Affordable Housing Targets. East King County cities together have kept pace with their collective moderate-income housing target, but achieved only 28% of the low-income target. Individual cities achieving more moderate-income housing are those with active incentive programs, or where the market has managed to provide smaller, moderately priced units. Almost all of the lower-income housing has required some type of direct assistance. Another concern is ---PAGE BREAK--- Housing Analysis I-21 January, 2012 an apparent trend toward achieving lower proportions of the affordable housing goals over time. Possible explanations include the ARCH Trust Fund and several other public funding sources being relatively flat for the last ten years, and newer multi-family housing being relatively more expensive than in the past.