Housing Affordability is a Foundation of the Region's Economy The Prosperity Partnership has worked over the last year to identify immediate steps to improve the climate for housing affordability in the central Puget Sound region. Under the leadership of Rita Ryder at the YWCA and Bill Longbrake at Washington Mutual, representatives from many different sectors - developers, nonprofits, business and government - found agreement on achievable steps. The top shared priority is the need to increase state funding for infrastructure to accommodate growth and promote affordability. Keeping up with aging and inadequate infrastructure is one of the most pressing problems for local jurisdictions, who often cannot afford to accept more density or more residents; this inability to accommodate growth dramatically affects our local communities' abilities to provide affordable housing. The Partnership has worked closely with the Legislature during the current legislative session to pass HB 3180. The bill would create an infrastructure program through the department of Community, Trade and Economic Development to provide low interest loans to local cities and towns for infrastructure improvement and expansion projects that support the development of affordable housing in dense, transit oriented neighborhoods. The Partnership will be sure to provide information about the successful passage of this priority as soon as it occurs. The infrastructure program is one of the three recommendations from the Prosperity Partnership's Regional Housing Strategy Working Group report, which also includes a waiver on sales tax for low income housing construction projects and the creation of an education and technical assistance program to promote the use of existing affordable housing tools and best practices by local governments. The Challenge Many of the Puget Sound's domestic peer regions - places like Denver, Minneapolis, and Phoenix - have more affordable housing than the Seattle metropolitan area. This can put the central Puget Sound at a competitive disadvantage, making the region comparatively less attractive to some people and companies. The Prosperity Partnership's Regional Competitiveness Indicators use an index to monitor the affordability of housing. An 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." The Indicators report that, in each of the four central Puget Sound counties. In each of the four counties the index is below 100, meaning that the median income household does not earn enough to buy the median priced home. First time home buyers fared even worse, with the median income first time buyer in King County earning only 40 percent of what he or she must earn to pay only 30 percent of household income for a median priced home. Another unfortunate impact of housing affordability challenges can be longer commutes, as the result of people living further from their jobs in order to afford a suitable home. This "drive until you qualify" can contribute to increased traffic congestion, impeding the economy by negatively impacting the speed and reliability of delivering goods and services, delaying workers, and loss of productivity. In central Puget Sound, the average commute for the region's residents increased by 5 percent between 1999 and 2006, from 12.2 to 12.8 miles. The Issue Affordable Housing is at the nexus of transportation, growth, and economic development. To embrace the opportunities that come with economic growth and increased development, the region must be attentive to the housing and transportation needs of the population. Housing affordability is a fundamental part of the equation. Without access to a home close to a job for workers at all wage levels, people cannot effectively participate in the economy. Housing affordability also directly impacts the region's economic competitiveness. In a world where top businesses and high-demand employees can choose where they want to locate, issues like quality of life and affordability often determine whether the region can attract the jobs and the talented people to compete globally. For all these reasons, the Prosperity Partnership has prioritized the improvement of housing affordability this year. Watch for more details on legislative action soon. For more information, contact Eric Schinfeld, Senior Economic Policy Analyst, eschinfeld@psrc.org, 206-971-3053. back to top