Prosperity Partnership
Regional Housing Strategy Working Group

Affordable housing is a foundation initiative in the Prosperity Partnership's Regional Economic Strategy. Having an adequate supply of affordable housing located in proximity to major employment centers supports the region's businesses, workers and their families, and promotes sound economic growth.

The Prosperity Partnership formed the Regional Housing Strategy Working Group in May 2007. Its members include representatives from a broad array of regional housing stakeholders: non-profit developers and public housing authorities, private developers and real estate professionals, local and state government housing officials and planners, local elected officials, employers, or-ganized labor, and various non-profit organizations with an interest in housing issues. Chaired by Rita Ryder of the YWCA of Seattle-King County-Snohomish County and Bill Longbrake of Washington Mutual, the group was tasked with developing a consensus-based set of tools and strategies to increase access to housing for workers at all wage levels located near job centers throughout the region.

What is the Challenge?

According to the Prosperity Partnership's Puget Sound Regional Competitiveness Indicators, housing affordability levels in the region have dropped to an all-time low, especially for first time homebuyers. Median housing prices for existing single-family homes increased throughout the region from the first quarter of 2006 to the first quarter of 2007, with increases ranging from 8% in Pierce County to 14% in Snohomish County. Prices rose slightly faster than in the previous four quarters for most counties. The regional average of the All Buyer Affordability Index declined 7%. (Note: An affordability index value of 100 indicates the typical homebuyer has just enough income to qualify for a mortgage on a median priced home; the index value can be read as: "The typical homebuyer earns "X" percent of the income necessary to afford a median-priced home). All coun-ties in the region now fall below the 100 mark, a change from last year, when Kitsap and Pierce hovered just above the line. First Time Buyer Indices fall well below the mark for all four counties.

The Regional Housing Strategy Working Group

The Regional Housing Strategy Working Group brought together a diverse group of stakeholders around this very complicated and often controversial issue in a way that was intended to produce consensus. Rather than try to debate issues or convince participants to change their positions, the work of the group focused on identifying areas of existing consensus, and working group members were polled after each meeting as to which strategies they felt they could support. Only the strategies with significant support and no major objection were included in the working group's final report. The group met four times over a six month period, and evaluated 26 potential strategies, including (a) legislative efforts at the state level to create new tools and funding mechanisms to support and incentivize local affordable housing efforts and reduce the costs of housing, (b) consensus endorsement of existing regulatory and incentive-based affordable hous-ing tools and approaches that local governments can use to facilitate and stimulate affordable housing production, and (c) the use of education and technical assistance to promote the use of existing affordable housing tools and best practices by local governments.

What's Next?

The below actions should be taken to improve housing affordability in the Puget Sound region and throughout the state.

What the Washington State Legislature Should Do:

State Funding for Infrastructure to Accommodate Growth and Promote Affordability
Local jurisdictions need increased ability to provide adequate and reliable infrastructure to ac-commodate the current and forecasted growth for our region. One of the important tools to achieve this goal is state funding for local infrastructure projects that directly support the Growth Management Act's affordable housing goals. Funds would be awarded based on the adoption of policies or tools that promote housing affordability and that add to the stock of affordable units in a community. Legislation to enact this proposal will also include strict accountability measures, such as a sunset clause and reporting requirements on the grantee projects and their contribution to the production of affordable housing units.

Waiver on the State Portion of the Sales Tax for Low Income Housing Projects
A waiver of the state portion of the sales tax on the hard and soft costs of construction and re-habilitation of low-income housing projects is an effective way to increase the supply of afford-able housing. This measure would help to lower the overall costs of low-income housing devel-opments, which will incentivize a broader array of organizations to pursue the construction of affordable units. As with the funding for infrastructure, legislation to enact this proposal will in-clude strict accountability measures, such as a sunset clause and reporting requirements on metrics like the number of units built using this waiver.

What the Prosperity Partnership Will Do:

Creation of a Program to Encourage Jurisdictions to Use Available Tools
Local governments play a vital role when it comes to housing and housing production, and a number of tools and strategies are available to local governments to encourage housing diver-sity and promote affordable housing. While one size does not fit all, many tools can be applied in a manner that is tailored to local market conditions, community characteristics, and the vision for growth embodied in local comprehensive plans. The group agreed to establish a Housing Education and Technical Assistance Program to provide information to local elected officials about the full range of tools available to them, and technical assistance to help their jurisdic-tions adopt the tools which they identify as appropriate to the needs and circumstances of their particular communities.

A Broad Coalition
The Prosperity Partnership is a coalition of over 250 government, business, labor, education and community organizations from King, Kitsap, Pierce, and Snohomish counties that has developed and is implementing a comprehensive Regional Economic Strategy. Its shared goal is two-fold: long-term economic prosperity and 100,000 new jobs for the central Puget Sound region.


Contact
For more information, contact Eric Schinfeld, Senior Economic Policy Analyst, eschinfeld@psrc.org, 206-971-3053.


Consensus Housing Strategies
Regional Housing Strategy Working Group Report on Consensus Housing Strategies