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The Community Impact of Cost-Burdened Citizens

Brown toy house with a jar of change its side with coins sliding out.

Lack of accessible, affordable housing is a human problem: Kids who don’t have stable housing fall behind in school. Cost-burdened seniors on fixed incomes face homelessness. The cost of housing takes priority over healthcare and food. Large populations of cost-burdened residents put a strain on social services and destabilize our local economy by reducing the consumption of goods and services. It is in the best interest of everyone, citizens and officials alike, to work towards a solution to help our neighbors access affordable housing.

In this article, we break down what “cost-burdened” means in relation to housing and unpack why affordable housing is essential to prevent homelessness.

What Does Cost-Burdened Mean in Relation to Housing?

According to the United States Census Bureau: “Households are considered cost burdened when they spend more than 30% of their income on rent, mortgage, and other housing needs.” This is a pressing issue across the country, with incomes lagging behind the rising cost of housing. In 2022, the U.S. Census Bureau published findings from a survey conducted by the American Community Survey which found that more than 40% of renter households in America qualify as cost-burdened.

Bellingham is no exception. According to Bellingham’s 2023 - 2027 Consolidated Plan Review, there was a 71% increase in families with children seeking support from the Homeless Service Center in 2022 versus 2018. In that same period, senior households needing services from the Homeless Service Center increased by 72% (City of Bellingham Washington Consolidated Plan Review for Council, June 2023 - July 2027, April 27 2022 version).

The City of Bellingham Washington Consolidated Plan Overview (June 2023 - July 2027) states: “In Bellingham, 24% of homeowners and 56% of renters are cost-burdened.” Considering 54% of Bellingham’s housing is renter-occupied and 46% is owner-occupied, the number of families and citizens who are cost-burdened in our city requires ongoing and evolving solutions to proactively create a more sustainable future for our community and economy.

Lack of Affordable Housing Impacts the Rate of Homelessness

When a disproportionate amount of someone’s income goes to housing, it requires them to make sacrifices in other aspects of their life, but many times, those sacrifices aren’t enough. A report by the National Low Income Housing Coalition (NLIHC) puts the extent of these sacrifices into a stark perspective:

“Severely housing cost-burdened and poor renters make significant sacrifices to pay for housing. An extremely low-income family of four with monthly income of $2,312 paying the average two-bedroom fair market rent of $1,342 only has $970 left each month to cover non-housing expenses. The U.S. Department of Agriculture’s thrifty food budget for a family of four (two adults and two school-aged children) estimates a family needs to spend $967 per month to cover food alone, leaving no funds left for transportation, childcare, and other necessities.”

Numbers like these should concern everyone because an increase in economic inequality destabilizes the future of our economy. Spending too much on rent and falling behind with other critical life expenses makes it nearly impossible for renters to save enough to purchase a home.

When a large portion of a community is classified as cost-burdened, it has rippling effects on the local economy. Cash-strapped residents reduce their spending on the local goods and services provided by the businesses and organizations who pay taxes that are funneled back into the community.

According to Joseph Stiglitz, an economist, public policy analyst and professor at Columbia University, “When those at the bottom of the income distribution are at great risk of not living up to their potential, the economy pays a price not only with weaker demand today, but also with lower growth in the future.”

Across the U.S., wages have not kept pace with the cost of living and certainly not the cost of housing. The 2022 U.S. Census reports Bellingham’s median household income was $59,163 between 2017 and 2021 while the median cost listing price was $625,000 in October 2022 a figure that puts homeownership out of reach for the average earner. Think renting is better? Think again. According to the Bellingham Herald, the average rent for a one-bedroom apartment is up 22% from 2020 with one-bedroom rents now averaging $1,450.00 per month. When renters become cost burdened, or severely cost burdened (spending more than 50% of their income on housing), it causes a cascade of effects that strain our community’s resources.

The statistics in the Consolidated Plan Overview shed light on some of the difficulties facing cost burdened members of the Bellingham and larger Whatcom County community:

● “In 2022, over half (52%) of the new intakes for the Housing Pool were people in families with children.”

● “Annual applications to the Housing Pool have increased from 781 households in 2018 to 1,071 households in 2022 (a 37% increase).”

● “The Bellingham Food Bank recorded its busiest week ever in 2022. Visits to the food bank have more than doubled since February 2020, from 17,000 to 35,000 monthly.”

Today, 56% of renters in the City of Bellingham are cost burdened which is cause for concern as there is a limited and long waitlist (that prioritizes the elderly) for low-income public housing that is guaranteed to keep rents at 30% of a renter’s income. Low-income public housing should not be confused with “affordable” housing which determines the cost of rent according to 30% or 50% of the area median income. For people living on fixed incomes, such as the disabled or elderly, the fluctuation of the area median income can price them out of their “affordable” homes, as we’re seeing with Mercy Housing’s Eleanor Apartments on North Forest Street in Bellingham. Today residents in Eleanor Apartments are paying 40% of their income on rent, now three-quarters of those renters are cost burdened and many are fearful of becoming homeless.

As we’ve highlighted before, homelessness is a housing issue. A webinar put on last year by the Bellingham For Everyone Learning Series, through the Whatcom Housing Alliance, introduced housing scholar Gregg Colburn, who explained how severe shortages of affordable housing limit upward mobility and homeownership. Residents remain renters because they cannot afford to buy. When there is no upward mobility in the housing market, rental vacancy rates decrease and homeless rates increase.

Despite the numerous studies that point to the fact that homelessness is a housing issue, many people are resistant to prioritizing the development of affordable housing, especially in their own neighborhoods. This opposition is often described as NIMBY-ism, the acronym standing for “Not In My Back Yard.” The fear is that affordable housing projects will increase crime and lower home values. However, a study from the University of California - Irvine challenged this notion, finding that affordable housing placed in existing neighborhoods did not negatively impact the neighborhood— in fact, public safety increased and there was no negative effect on home values.

Cost-Burdened Aren’t Typically Decision Makers

The other notable issue in a community with a high-volume of cost burdened households is that those with means (time and money) are typically the ones who make the decisions. Severely cost-burdened households who require government support with housing and food are much less likely to have time to get involved in public discourse about housing and other important policies.

Studies show that the administrative barriers, which severely cost-burdened households have to navigate, increase their day-to-day demands so much that the paperwork alone often prevents people who need assistance from accessing the programs that are designed to help them. On top of managing work, meals, transportation, and childcare, this sector becomes excluded from the democratic benefit of public participation.

Renters who make too much to qualify for government assistance, but too little to afford their own home, are less likely to be involved in public discourse as well because they are more likely to work multiple jobs in order to make ends meet to cover the cost of living.

As a result, those who are making policy decisions or advocating for or against development are usually not those who are cost-burdened. Yet, community advocacy is essential. It’s just as, if not more, important than voting because it’s an ongoing and evolving process that directly impacts the day-to-day experience.

We know those who are working full time, or more than full time, are less likely to participate because parsing the information about existing or proposed policies is time consuming. Even those serving as City and County Council Members who hold full-time jobs can benefit from professional assistance to help dissect the complex layers of housing and land use policies.

With pandemic relief resources drying up, Bellingham’s housing crisis is becoming more apparent. In the second part of the City’s May 8th, Community and Economic Development Committee Meeting, City staff relayed grave news to Council Members outlining residents' desperate need for housing assistance. While the Federal Government distributes over $22 million each year in housing vouchers to the Bellingham and Whatcom County Housing Authority, only one in every four households that need support receive assistance. If every household in need received assistance, Bellingham’s Housing Authority would need $90 million a year from the Government to help support cost-burdened and severely cost-burdened residents throughout Whatcom County.

At this point in time, well-vetted, out-of-the-box thinking is needed to help solve Bellingham’s housing crisis. The economic implications that go hand-in-hand with a lack of housing are far reaching, impacting our social, emergency, education and healthcare systems and services.

As we enter the 2025 Comprehensive Planning Process, we will continue to examine the issues and explore tools and ideas that may offer potential solutions to help ease the housing crisis.

Housing for Bellingham is here to serve as a resource to support the general public so that they are informed and able to provide input on future development and housing in Whatcom County. Use our calendar to stay up to date on council meetings, agendas, summaries, and other key issues.

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 we understand land use planning processes, we can make more informed decisions about housing and land use policies in our community.



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

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