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A Look at Our Affordable Housing Crisis

yellow house. coins and a yield sign that reads affordable plan

Affordable housing is desperately needed in Bellingham, Whatcom County, and throughout America. When Americans don’t have access to affordable housing, everyone suffers. Families, individuals, the economy, and municipalities — all sectors of society.

If headlines are any indication, affordable housing is top of mind for Bellingham, but what is the City of Bellingham doing to foster and increase the development of affordable housing for its residents? Let’s break down what you need to know about affordable housing.

What Qualifies as Affordable Housing?

In some ways, affordable housing might seem very straightforward — a mortgage or rent that is affordable to the people occupying their home. But affordable housing is defined and measured by the federal government as costing 30% or less of a household’s income. Affordable housing is a necessity for quality of life and for economic stability. When people spend no more than 30% of their income on housing costs, they not only are able to increase their savings but they also have more disposable income to inject back into the economy.

According to the U.S. Census Bureau, between 2017 and 2021 40% of American renters reported spending more than 30% of their income on housing, which qualifies this large population, 19 million households, as cost burdened. In a recent article, Vox reports that, “nearly 11 million households spend more than 50 percent of their income on rent,” placing these households in the severely cost-burdened category. When households spend more than 30% of their income on rent, it makes it nearly impossible to save for a down payment on home. But, the issue of being cost burdened does not exclusively apply to renters — 22.8% of homeowners spent more than 30% of their income on housing in 2021. Learn more about the community impact of cost-burdened citizens by reading our recent article.

The Shortage of Affordable Housing

Across the nation, demand for affordable homes has far outstripped the supply and factors such as the cost of building materials, economic uncertainty, zoning regulations, land use restrictions and other administrative barriers have made it challenging for developers to build the number of homes that Americans need. Some estimates indicate that America has a shortfall of 3.8 million affordable homes. Others say that number might top 7 million.

The affordable housing shortage has been acknowledged by the Biden administration, through legislation including “Build Back Better,” as well as vocalizing to local governments that denser housing may be a solution for helping communities decrease rents. But many say this is not enough.

As things stand, there is no place in the United States where someone who works a full-time job making minimum wage can afford to live in a two-bedroom apartment, according to the National Low Income Housing Coalition. A significant population of cost-burdened residents strains government resources. Locally, in our own community, there are not enough resources to support the need. The Bellingham Housing Authority spends $22 million each year, allocated by the federal government, to help keep cost-burdened residents of Whatcom County housed. However, the program can only afford to support one out of every four households in need. In Whatcom County alone, an astronomical $90 million a year is needed to help all of the cost-burdened households in our community.

Paving the Way to More Affordable Housing

We need to change our approach to creating more affordable housing for our community. Currently, Bellingham’s Consolidated Plan Overview states that it costs $400,000.00 to build one apartment in a multi-family building. The costs of land, building materials, labor, permitting and building fees affect the cost of housing. The Urban Institute put together an interactive model to demonstrate that building affordable housing is “not particularly affordable.” In short, the Urban Institutes points to the need for government subsidies to help make development more affordable and rent more affordable so developers can recoup their costs. However, the need for government subsidies in our community is greater than the resources we have allocated for housing.

Current government funding is said to be able to build or maintain “110 to 130 units of affordable non-profit housing per year.” Yet according to the 2023 – 2027 Consolidated Plan Overview, Bellingham estimates it needs closer to 425 affordable new homes per year to house low-income households. But 425 is still not enough. Using Washington State’s Department of Commerce projections, Bellingham will need to produce about 525 homes a year over the next 20 years that are affordable to those making 80% or less of the Area Median Income (AMI).

With a problem this big and limited resources to meet the need, the City of Bellingham has to adopt out-of-the-box thinking to mitigate the economic and social impact of the affordable housing shortage before it gets worse. When people have access to affordable housing, quality of life improves and the health and wellness of households improve as well. People aren’t forced to choose whether their income goes to their health or house. Research also points to increases in productivity and greater economic growth when households have extra expendable income.

We need to think creatively and urgently about how to address the affordable housing shortage now. HB 1110 depends on homeowners to create more housing by building accessory dwelling units (ADUs) in their backyards or by tearing down their single-family homes to build four and sixplex condos. With the costs of building materials and labor, it is unrealistic to expect the average Bellingham homeowner to make a dent in the housing supply that Bellingham needs.

As we know, private developers have an incentive to build faster, more efficiently and cost effectively than independent homeowners. We have to look to the professional builders and developers to help fill the gap between the current needs and the limitations of the existing systems. One solution to expedite new home construction in Bellingham, is for the City to use grants and subsidies to lay the infrastructure needed to sustain new housing: roads, water and sewer lines. Once the infrastructure is in place, there are fewer barriers to new home development.

ABOUT — Housing for Bellingham is a community resource that works to explain the fundamental processes and terminology associated with housing related decisions in effort to inform the public. When the people understand land use planning processes and terminology, everyone can make more informed decisions about housing and land use policies in their communities



Contact your Bellingham City Council representative and tell them you support a proactive plan for sustainable growth.

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