The Annual Affordable Housing Bulletin is a publication of the King County Executive's Office of Regional Policy and Planning. Its purpose is to monitor the cost of home purchase and rental housing in King County, particularly in relationship to the income of the King County workforce.

Disclaimer
This document has been edited to improve readability and allow availability on King County's web site. The Affordable Housing: Annual Bulletin is available from King County's Office of Regional and Policy Planning.

Table of Contents

>> How Affordable is Housing in King County?
>> Housing Prices, Income Requirements and Typical Occupations
>> Highlights: Buying a Home
>> Highlights: Rentals
>> Median and Average Home Prices by Jurisdiction: First Quarter 1999
>> The Sub-Regional Picture: South County Leads the Way in Affordable Housing
>> King County and its Partners Find Means to Provide Housing for Lowest Income Groups
>> Maps:   Affordable Rentals, Single Family Homes, Condos and Townhouses
>> No Market-Rate Housing for 52,000 Households in Lowest Income Group
>> Home Ownership in King County Lower than Most Urban Counties
>> Saving for a Down Payment
>> Definition of Terms
>> Methodology

How Affordable is Housing in King County?

A lively debate has been taking place in King County this year over whether housing is affordable to those who live and work here. From 1990 to 1998, the price of a median single family home rose 53.5%. Rents have also increased and vacancy rates are low, making it difficult for low-income renters to find anything they can afford. Our housing costs are among the highest in the nation. But King County wages have also risen dramatically during that period, and from 1994 to 1998 mortgage interest rates were falling, making the same-priced home slightly more affordable.

Are we in a housing crisis, or is this business as usual? As our sons and daughters finish school and look for an apartment, can they afford to live in a place close to work and friends? When they begin their families can they find a home that they can pay for with less than two full salaries, or with full-time child care costs to pay as well? Anecdotally, we know that housing costs exceed the means of many of our family members and friends, yet some studies indicate that housing today is no more expensive than it was 20 or 30 years ago. What are the facts?

Housing Prices, Income Requirements               and Typical Occupations

1999 Housing Prices in King County	Income Requirements for this Housing Type	Typical Occupations with Required Earning Power *
$145,000 Median-Priced Condo	Income Required after 5% down: $47,750 per year Hourly wage for one full-time and one half-time worker: $15.30 Availability: 50% of KC condos are priced at or below this amount.	1 full time and 1 half-time public school teacher ($31,800 + $16,000) or 1 full-time university professor or 1 full-time heavy construction worker
$174,000 "Starter Home"	Income Required after 5% down: $57,290 per year Hourly wage for one full-time and one half-time worker: $18.40 Availability: 25% of KC homes are at or below this price.	1 full-time senior police officer or 1 full-time corrections officer ($39,000) and 1 full time social service worker ($18,400)
230,000 Median-Priced Home	Income Required after 10% down: $71,740 per year Hourly wage for one full-time and one half-time worker: $23.00 Availability: 50% of KC Homes are at or below this price	1 full-time insurance broker ($47,500) and 1 full-time clothing store employee ($23,700) or 1 full-time aerospace engineer, computer programmer, or educational administrator ($70,000-$74,000)
$277,000 Average-Priced Home	Income Required after 10% down: $86,400 per year Hourly wage for one full-time and one half-time worker: $27.70 Availability: 65% of KC Homes are at or below this price.	1 full-time assistant bank manager ($43,000) and 1 full-time public health nurse ($43,500) or 1 full-time firefighter ($55,000) and 1 full-time bookkeeper or dental assistant ($31,000)
$732 per month average rent for a 2 Bedroom, 1 Bath Unit	Income Required: $29,280 per year Hourly wage for one full-time worker:$14.10 Availability: About 50% of 2BR, 1 BA units rent at or below this amount.	1 full-time entry-level bus driver ($29,200) or 1 full-time administrative assistant ($29,000) or 1 full-time grocery clerk ($22,000) and 1 part-time child-care worker ($9,000) *(Salaries are estimated based on averages for entry to mid-career earners unless otherwise specified)

Highlights: Buying a Home

• The median single-family home price in the first quarter of 1999 was $230,000. This is a 7% rise over the median for 1998, and a 24% increase since 1997.
  
• Median household income in King County rose about 6% from 1998 to 1999 (based on H.U.D. estimates), and about 13.5% since 1997.
  
• A household earning the 1999 median income for the County could afford a home costing $191,000. However, only about one-third of King County homes were priced at or below that amount. At 80% of median income, only 8.6% of homes were affordable.
  
• In 1970, a median income household could easily afford a median-priced home. But from 1980 to the present, a median-priced home has almost always cost more than a median income household could afford.
  

• In 1998 low interest rates and rising income made home purchase more affordable than in either 1980 or 1990, but still much more expensive than in 1970. In 1999, with higher interest rates, households can afford less house than during the past few years.
  

• First-time home-buyers, earning about 80% of median income could afford only about 8.5% of the single family homes for sale in King County this past spring. A " starter home", priced in the lowest 25% of home sales, would cost that household about $300 more a month than they could afford.
  
• Condominiums constituted 21.4% of home sales in the first quarter of 1999. The median price of a condo was $145,000, nearly $10,000 more than the affordable home price for a household at 80% of median income. Condo fees average about $150 -$200 a month.

Highlights: Rentals

• Although there are low income owners, and high income renters, the majority of renters earn less than 70% of median income, while the majority of owners earn over 120% of median income.
  

• Average rent for a two bedroom, one bath unit rose from $708 in 1998 to $732 in mid-1999. An apartment with two bedrooms and two baths cost $890 a month. The King County average for all types of apartments was $747.
  
• In 1998, the median rent for a single family home was $1200. A household of three persons at 80% of median income could not afford this rent.

Single Family Rental Homes Not Affordable for Many Families

Not all households who need affordable housing can manage with a two bedroom, one bathroom apartment. Even a family of three, consisting of a single adult and a teenage son and daughter, will have a difficult time with two bedroom housing. There is a need for affordable rentals of a larger size, especially when the high cost of home purchase makes it inaccessible for many young, growing families.

In 1998 a typical single family home rented for $1200. Out of all single family rentals, less than 30% rented for under $1000. Since about 23% of King County rental housing (65,000 units) consists of single family homes, the affordability of this type of housing is significant. Larger apartment units are nearly as expensive as rental homes. A three bedroom, two bath unit rented for an average of $1013 in early 1999. A household would need to earn $40,000 to $44,000 to afford a rental in the range of $1000 to $1100. In this rental range they could probably find a three bedroom apartment unit, and possibly a three bedroom rental home, but the supply of rental homes would be very limited. Many of the less expensive rental homes will only have one or two bedrooms. Households in this income range are earning 80%- 90% of the King County median household income. A family consisting of a full-time retail clerk, a half-time bookkeeper, and two children would just barely be able to afford a three bedroom rental. The rent for a three bedroom unit is beyond the budget of a single income household supported by an early-career teacher, a bus driver, or a secretary.

Return to:  Table of Contents | Regional Policy and Planning Home

King County Median and Average Home Prices: First Quarter 1999

The Sub-Regional Picture:   South County Leads the Way                                                  in Affordable Housing

The picture that emerges from the maps is clear. South King County has more affordable housing available - whether rental units, homes for sale, or condominiums and townhomes for sale - than the Eastside, the North end, or Seattle. The rural cities of Enumclaw, Black Diamond, Covington, and Snoqualmie also have some affordable ownership opportunities. Some cities have more affordable rental stock, while other jurisdictions have more affordable homes or condos for sale. For instance, about 28% of Seattle's rental units (both multifamily and single family) are affordable to households at half of median income, while less than 11% of its home sales are affordable to a family at 80% of median income. The index of overall housing affordability by jurisdiction combines the number of rental units affordable at 50% of median income (the rental market) with the number of condos, townhomes, and detached single family dwellings that are affordable at 80% of median income. Dividing this combined number of affordable housing units by the total number of existing units yields the percentage of a city's housing stock that is affordable. This index allows for a rough comparison among cities. It gives cities credit for existing housing. It does not adequately represent the efforts that cities are currently making to add to their stock of affordable housing.

King County and its Partners Find Means to Provide Housing for Lowest Income Groups

People are King County's most valuable resource. Their well being affects the prosperity of the region. There are various resources in place to address the housing needs of lower-income County residents, including people with special needs, such as the elderly and people with disabilities.

There are approximately 46,000 assisted and subsidized rental units in King County, including Seattle. About 80% of these are permanent units rather than shelter or transitional housing. Roughly 55% of the assisted and subsidized rental housing in the county is located in Seattle, and 45 % is outside Seattle. As of June 1999, the King County Housing and Community Development inventory of assisted housing includes a total of 16,218 rental units for the county outside Seattle.

Among the forms of capital assistance in place in King County are the following:

• Publicly-funded capital loans and grants through state, county and city funding sources for acquisition/purchase and rehabilitation of existing housing stock, and new construction of units predominantly owned and operated by non-profit housing developers and housing authorities.
  
• King County Housing Authority manages 3,737 Section 8 rental subsidies, operates 3,384 public housing units, and manages other project-based Section 8 subsidies. Seattle and Renton Housing Authorities manage and administer similar types of programs.
  
• King County has developed the Housing Opportunity Fund (HOF) to fund non-profit housing development serving special needs populations and households below 50% of the county median income ($28,150 for a family of three, $33,800 for a family of five). Executive and Council initiatives in recent years have expanded the HOF and enabled it to also address workforce and mixed income housing (e.g., challenge grant targeted to suburban cities; downpayment assistance for first time homebuyers; credit enhancement program; and surplus property program). King County has also used federal sources to fund emergency, transitional and permanent housing serving up to 80% of median income ($43,000 for a family of three).
  
• Locally, jurisdictions have set aside funds for preservation and rehabilitation of housing units affordable to low and moderate-income households. Some jurisdictions, like the City of Bellevue through its trust fund, and the City of Seattle through its housing levy, are creating funds for housing development. Some other public initiatives include:
  1) Tax credits for rehabilitation and construction of new low- and mixed-income     units;
  2) Purchase assistance for homeownership by South King County HomeSight;
  3) Privately-funded capital loans and grants from banks, corporations,     endowments, and trust funds; and
  4) Land trusts designed to subsidize low-income housing, such as one creating     20 affordable units on Vashon Island.

Affordable Housing Maps:   Rentals, Single Family Homes,                                                 Condos and Townhouses

Note: The urban part of unincorporated King County is represented by the shading appropriate to its overall affordability level. However, there may be significant variation in affordability in different regions of the unincorporated urban area. Rural unincorporated areas are not represented on these maps.

>> View Maps:

Rental Units .pdf file (296 KB)
Single Family Homes .pdf file (289 KB)
Condos and Townhomes .pdf file (285 KB)
1998 Home Ownership Rates in King County Jurisdictions .pdf file (273 KB)

No Market-Rate Housing for 52,000 Households in Lowest Income Group

For the approximately 52,000 households who earn less than 30% of the median income for their household size, there are only 420 rental units that those households could afford. King County does have adequate rental housing for most households earning over 30% of median income. Altogether about 280,000 households in the County depend on rental housing. 65,000 of those households occupy single family or mobile homes, and 215,000 occupy apartments, or rental condos and townhomes.

As the chart below shows, a single person at 30% of median income could afford a monthly rent of $329 per month. There are virtually no market rate apartment units in King County that rent for that amount. The median for a studio apartment in King County is $563 per month and for a one bedroom unit, the median is $654. The problem becomes more acute for households of four persons or more. At 50% of median income (about $31,300 for a household of four), no more than $783 should be spent on housing costs including utilities. There will be sufficient two bedroom, one bath units available at this amount, but there will be almost no three bedroom apartments or single family rentals available within this budget.

Except where public incentives are in place, the housing market works without deference to low income households. When a household occupies a unit affordable to a lower income level, that decreases the supply that is actually available to households with the lower income. For instance, if there were no assisted housing, nearly all the 52,000 renters under 30% of median income would have to occupy housing affordable at the next income level up. Since the supply at the 31% - 50% level is also limited, some of the households in that group would also be forced into more expensive housing because the supply would not be equal to the demand. The reality of finding affordable housing is complicated by a low vacancy rate, high move-in costs (deposits, etc.), and competition with higher-income renters for acceptable low-rent housing. Publicly-assisted housing is a significant and necessary complement to market-rate housing in King County (see article on King County and its partners). Last year there were over 35,000 rental households benefiting from some form of public support for housing costs.

Nevertheless, there remain at least 20,000 households who cannot afford market rate rentals, and who do not receive any assistance. This means that most of these households are paying more for their housing than they can realistically afford. As a result, other basic needs are not met, and these households are at increased risk for homelessness.

Home Ownership in King County Lower than Most Urban Counties

The most recent estimate of the home ownership rate in King County puts it at 59% of all households. This is the same level of home ownership as was reported in the 1990 Census. In 1997 the average rate for the 75 largest metropolitan areas in the U.S. was 64%. The home ownership rate is the percent of homes that are owner-occupied.

As the table shows there has been a declining trend in the home ownership rate in Washington State, in King County as a whole, and in Seattle over the last 30 years. This has occurred during a period when the ownership rate for the U.S. has shown a moderate increase. Two-thirds of the country's households live in a home that they own.

Cities and urban counties typically have lower home ownership rates than suburban and rural counties. They are likely to have larger concentrations of typical renter populations such as single people, students, and lower-income groups. Comparison among metropolitan areas is difficult because the amount of suburban or rural area that is included varies widely. The Seattle-Bellevue-Everett MSA, with an ownership rate of 63% includes all of Snohomish and Island Counties as well as King County. Home ownership in the Portland-Vancouver MSA stands at 61.1%. The City of Seattle's rate of 48.6% is roughly the same as San Francisco's ownership rate of 48.8%. As the table below indicates, the lowest home ownership rates tend to be in the south end of the County and in Seattle (See also: the map reflecting the 1998 home ownership rates in King County jurisdictions).

Redmond and Kirkland also have relatively low home ownership rates because of the high proportion of multi-family buildings in those communities. Historically, Kirkland has also had a relatively high proportion of single family rentals. The map at lower right shows home ownership rates in King County cities and in the unincorporated area as a whole. Generally speaking the rate of ownership is highest in the less densely populated areas where single-family homes dominate. The highest ownership rates are in the "Point" cities, and rural areas.

Saving for a Down Payment

As housing prices have risen over the last 10 years, falling interest rates have helped to slow the growth in the cost of monthly mortgage payments.

However, saving the 5% or 10% down payment for a starter home, has become more difficult for moderate income families. In 1970, a 10% down payment on a

starter-home (lowest 25% of the market) would have cost $1562 and it would have taken a moderate income household about 2.1 years to save for it, assuming a 10% savings rate on the same annual income. In 1999, it would take about 4.1 years to save the $17,400 needed for a 10% down payment on a starter home.