Prioritizing Workforce Housing Development in Bellingham

Bridging Bellingham's Wealth Divide

Bellingham, Washington, is currently the most expensive small city in America with the highest home-price-to-income ratio. A growing divide is emerging between those who can afford to live in the city and those whose labor keeps it running. Teachers, nurses, tradespeople, grocery clerks, and public safety officers form the backbone of our local economy, yet increasingly find themselves priced out of the very community they serve. This affordability gap threatens not only individual families but also the social and economic fabric of Bellingham. As we prepare for the next 20 years of growth through the Comprehensive Planning process, it is essential that Bellingham prioritize workforce housing development—homes attainable for those earning 80-120% of the Area Median Income (AMI).

Bellingham's Housing Affordability Crisis

The cost of housing in Bellingham has risen by 127.9% over the past decade. Recent data show the average home price has reached $750,000, and the average rent exceeds $2,000 per month. This dramatic rise has significantly impacted renters who are unable to buy homes and renters make up over half of the city’s residents. According to the City of Bellingham's 2023-2027 Consolidated Plan, Bellingham's housing is 54% renter-occupied and 56% of those renters are cost-burdened— spending more than 30% of their income on housing. Of these, roughly 6,000 households are severely cost-burdened, paying over 50% of their income toward housing costs. Being severely cost-burdened leaves little to no room for unexpected expenses, making renters vulnerable to eviction and homelessness.

As housing costs climb, so too does homelessness, putting additional pressure on social services and emergency systems. The 2023 annual Point-in-Time Count (PITC) reported more than 1050 individuals experiencing homelessness in Whatcom County, the highest level on record. The City's website identifies the lack of affordable housing as the leading cause of homelessness— making it not only a housing issue but a public health and safety concern.

It is also an environmental issue. Those with resources who can't afford to live in the city are forced to move to rural areas or smaller cities where housing is more attainable. This results in longer commutes, increased vehicle miles traveled, higher greenhouse gas emissions, and more stormwater run-off pollution affecting local ecosystems and waterways.

The Need for Housing Variety to Meet Affordability Benchmarks

To address the affordability crisis, Bellingham must expand its housing supply. A well-documented correlation exists between increased housing supply and reduced housing costs. However, it is not just about quantity—homes must also be affordable for working-class residents. Smaller housing units typically cost less, and increasing the diversity of housing types, including smaller homes, will help ensure options are available at various income levels.

Housing that is affordable to a range of incomes isn't just ideal— it is now mandatory under Washington State's Growth Management Act. In 2021, House Bill 1220 was passed requiring cities and counties to plan for housing affordable to all income levels. To assist with this process, the Department of Commerce created a Housing for All Planning (HAP) tool which uses projected population growth to estimate housing needs by AMI category.

The AMI represents the midpoint of all household incomes in a region and is used to determine eligibility for housing programs. It is a valuable tool that provides a view of income inequality and determines the economic stability of an area. In 2025, Bellingham's AMI is $108,400 for a household of four. This calculation is provided annually by the U.S. Department of Housing and Urban Development. A household earning $86,720 (80% AMI) is considered low-income, one earning $54,200 (50% AMI) is very low income, and a household earning $32,500 (30% AMI) is classified as extremely low income.

To afford a $750,000 home in Bellingham without becoming cost-burdened, a household would need to earn more than $175,000 annually—this number does not include property taxes and utility costs. This is far above the median incomes of many essential workers: registered nurses in Whatcom County earn about $85,000, teachers around $75,000, and police officers approximately $80,000. These salaries fall well below what is needed to purchase an average home in the current market. Consequently, many in Bellingham’s workforce are left renting or commuting from more affordable areas, which strains infrastructure and diminishes quality of life.

Reducing the home-price-to-income ratio is essential to solving Bellingham’s affordability crisis. Despite challenges such as high construction costs and regulatory fees, one Bellingham builder has shown that affordable workforce housing is achievable. 

Larrabee Springs – A Model for Workforce Housing

Larrabee Springs, a residential development located in north Bellingham has consistently produced some of the most affordable new homes for working-class residents over the past decade. Envisioned by Caitac USA and realized by green builder Alex Wynstra of AJW Builders, the community exemplifies a balance of environmental responsibility, affordability, and thoughtful design. Today it is recognized as the largest green-built, solar-powered community in Washington and offers a replicable model for workforce housing.

What distinguishes Larrabee Springs is its combination of affordability and sustainability. Sales data from 2020 to 2025 shows that 69% of homes in Larrabee Springs were affordable to 4-person households earning between 80% and 120% of AMI. Homes are green-built, energy-efficient, and come standard with eight solar panels. The development prioritizes working with local contractors and sourcing building materials from as many local businesses as possible to stimulate Whatcom County’s economy and reduce its environmental impact. This approach demonstrates that affordability and environmental stewardship can coexist—an important lesson as Bellingham prepares for two decades of population growth.

A Critical Window for Action

Bellingham’s 2025–2045 Comprehensive Plan presents a pivotal opportunity to transform the city’s housing future. By investing in necessary infrastructure and establishing the right incentives that prioritize workforce housing—particularly for those earning 80–120% of AMI—the city can support the kind of housing production necessary to retain essential workers. This will reduce commuter congestion and promote long-term economic and social stability. Developments like Larrabee Springs demonstrate that it is possible to build high-quality homes that are both affordable and environmentally responsible.

If Bellingham hopes to be a thriving, equitable city where working-class residents can afford to live, the time to act is now. Encouraging housing development tailored to the needs of working families will help build a resilient, inclusive community where everyone has a chance to succeed.