Big trends putting pressure on Spokane’s housing supply

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Big trends putting pressure on Spokane’s housing supply

Amanda Beck, Assistant Planner II, 509.625.6414

Thursday, March 10, 2022 at 2:28 p.m

Big trends putting pressure on Spokane's housing supply

Why is housing in Spokane getting more and more expensive?

Organizations across the Inland Northwest are working hard to address the current housing affordability crisis. The city’s effort to shape Spokane Housing is an extension of the 2020 Housing Action Plan and focuses on some of the smaller projects and follows recommendations for solutions such as backyard housing and new lots. But why is the city concerned with these solutions for housing supply? There are several macroeconomic and local reasons why housing is becoming more expensive, both across the country and in Spokane. Here are three big trends.

The gap between income and house prices

Americans experienced wage growth from the 1960s through 2008. In other words, adjusted for inflation, wages rose and with them the purchasing power of a household. Since 2008, wage increases have not increased enough to keep purchasing power above inflation or rising living standards.

As it looks on the ground, that’s between 2012 and 2018 Median household income rose 21.2 percent, while the median home price rose 47 percent from 2010 to 2020, from $174,000 to $256,000. Median renter income increased 20.7 percent from 2012 to 2018, while the median rent for a two-bedroom apartment in Spokane increased 11.2 percent from $972 to $1,081 from 972 to 2020. While rising rental income is positive, it can also be an early warning sign Middle-income households stay in the rental market longer because they are priced out by the homeownership market.

Population growth and delayed housing construction

After the financial crash of 2008, housing construction lagged behind nationally and locally. The construction of single and multi-family houses has not kept pace with population growth in the last ten years. The COVID-19 pandemic has also caused problems as developers experienced a surge in building materials, snarls in the supply chain, or delayed works due to pandemic-related shutdowns.

The backward construction of single-family houses and multi-family houses is made more difficult by the population growth. Between 2010 and 2020, Washington state grew by over 931,000 people, with an influx of over 500,000 people from abroad. In these times, Spokane’s population increased by over seven percent, keeping Spokane the second-largest city in the state.

As more and more people want to buy fewer homes, buyers end up looking down. Higher price bracket buyers offer lower home prices after failing to secure a home in their preferred price range. The domino effect of squeezing each rung of the income ladder from the top means that the lowest income households are left behind. This suggests that more housing is needed at all income levels to address our housing shortage.

Spokane is still natural, almost perfect

As a medium-sized city, Spokane often scores highly for quality of life, employment, and amenities. Spokane has 87 city parks and five community centers with over 4,100 acres of protected green space. Thanks to the voter-approved library loan, the city library system will be upgraded with three new libraries and renovations to the other four libraries, which will serve as community anchors across the city. US News Best Places 2021-2022 ranked Spokane 78th nationally, including 101st for Best Places to Retire, and ranked Spokane 3rd out of 150 major cities for Best Place to Live When You Worry to do about climate change. In 2021, Best Cities ranked Spokane 64th and the only other city in Washington alongside Seattle (14th).

More people moving to our area means more opportunity and a stronger economy for all—a larger workforce for growing businesses, entrepreneurs looking to start new businesses, artists who can enrich Spokane’s arts and culture scene. That’s a great thing as long as there are enough houses for everyone who wants to come here.

Spokane’s quiet neighborhoods blend well with our diverse downtown, with infrastructure and support for thriving local entrepreneurs. It’s not hard to see why people enjoy the small-town feel of Spokane, with its big-city amenities and shops unique to 509.

engage

Will the proposed rule changes be enough to make it easier to build backyard homes like annexes and other smaller housing options? Learn more and provide feedback at the Spokane Housing Action Plan website.

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