The State of Housing in Thurston County
We all know by now that our county is facing a housing crisis, one that is felt keenly here in the Puget Sound region. With a mission to build homes, communities, and hope, South Puget Sound Habitat for Humanity recognizes the urgent need to grow the supply of homes and preserve the existing supply. The demand for housing has far outpaced available housing for well over a decade now. In our service area, Thurston County, we are experiencing a historically low inventory of affordable housing units for sale and rent. Consequently, the lack of available homes contributes to much higher prices and cost burdens for residents. These issues will persist without an increase in housing that people can consistently afford.
What’s contributed to the high cost and low inventory of homes? Pressure for housing comes from various sources. If we look back 15 years to the foreclosure crisis, we can see how the blunted growth of home construction that resulted can’t catch up to the ever-increasing appetite for housing.¹ The cost and stock of homes are also affected by ongoing supply chain disruptions and labor shortages. We’ve all experienced this to some degree in our daily lives. The construction industry has been hit especially hard. Essential building materials are expensive and often difficult for homebuilders to get their hands on, and a lack of workers slows construction.
Locally, it’s estimated by the Thurston Regional Planning Council that 34,000 new units will need to be built in the next 25 years to accommodate growth in our area. The county’s population is projected to grow by nearly 90,000 people in that time.² That’s compounded by Millennial’s, the largest generation, who are currently in their prime household-forming years. They have driven the formation of households in the South Sound at a rate of over 30% of what it was 20 years ago.³ Thurston County is also attracting households from the Seattle area due to the high cost of real estate in that market. Those households tend to have higher incomes, resulting in Thurston County currently having the fourth-highest median household income in the state.
The influx of new residents with higher wages has caused vacancy rates to plummet and housing prices to soar. Currently, Thurston Co. has a rental vacancy rate of 3.4%, lower than that of King and Pierce counties.⁴ The median home sales price was $473K in October 2021.⁵ These record-high prices have significant consequences for residents in our region. Approximately 12% of the county’s households are cost-burdened, meaning they spend more than 30% of their income on housing expenses. Of those, almost half are paying more than 50% of their income on housing costs.⁶ As income declines, the percent of households that are housing cost-burdened increases, meaning the less money a household makes, the more likely they are to need to use a higher percentage of their income for housing costs.
High prices and a scarcity of homes are some of the reasons why South Puget Sound Habitat is committed to putting and keeping safe and affordable housing within reach. One way we do that is by constructing homes and making homeownership affordable for low- to moderate-income families. We are in the final stages of building Deyoe Vista, a 5-acre cottage development in Lacey. When finished, it will include 33 single-family homes with 2-, 3-, and 4-bedrooms, as well as two playgrounds, 33 community garden beds, and an outdoor eating area with grills and tables. We have 30 homes completed and occupied, with the final 3 homes being constructed.
For two upcoming projects, South Puget Sound Habitat is taking advantage of new regulations and changes in zoning to construct a variety of housing developments. We are preparing to construct 14 duplexes that will house 28 families on a 3-acre parcel in Tumwater and will break ground in 2022. We are also planning to develop a 2.30-acre parcel in Yelm. The Yelm development will include a mixture of 2- and 3-bedroom homes with 3- and 4-bedroom townhomes.
We are also focused on keeping people housed. Our Critical Home Repair Program helps homeowners whose homes are negatively impacting their health or safety well-being. These types of issues can force people from their homes and into homelessness. The Critical Home Repair Program completes repair work and additions (like wheelchair ramps) that keep low-income homeowners from being forced out of homes they can afford and improve the quality and health of their homes. Long term, maintaining ownership of a home elevates the homeowners’ personal wealth. In 2017, homeowners’ median wealth was nearly 89 times larger than the median wealth of renters. Being able to remain in their homes means low-income homeowners retain a wealth-building asset.⁷
Tackling the huge and complex issue of housing can feel more than a little daunting. Yet we feel that our vision of a world where everyone has a decent place to live is achievable. Small steps can turn into big changes. South Puget Sound Habitat continues to do what’s in our power to house individuals and families in safe, affordable housing. We always rely on and are ever grateful for hard-working and passionate volunteers and donors that bring their energy, joy, and commitment to our mission. Together, we will transform our community’s housing crisis into an opportunity to thrive.
References
¹ Blumenthal, Pam, and Gray, Regina, “Opportunities to Increase Housing Production and Preservation,” PD&R Edge, September 7, 2021, huduser.gov/portal/pdredge/pdr-edge-trending-090721.html?eId=119ff713–9874–420a-8dc2-b9cbb6ac0e65&eType=EmailBlastContent&utm_source=pocket_mylist
² Thurston Regional Planning Council, “Housing Needs Assessment,” January 2021, trpc.org/DocumentCenter/View/8067/Housing-Needs-Assessment?bidId=
³ Frankel, Matthew, CFP, “Housing shortage: 5 more million homes needed for supply to catch up to demand,” USA Today, September 24, 2021, usatoday.com/story/money/personalfinance/real-estate/2021/09/24/5-million-more-homes-needed-in-the-us-what-investors-need-to-know/118840812/?utm_source=pocket_mylist.
⁴ Thurston Regional Planning Council, “Housing Needs Assessment.”
⁵ Redfin, “Thurston County Housing Market — Trends,” November 14, 2021, redfin.com/county/3102/WA/Thurston-County/housing-market.
⁶ Thurston Regional Planning Council, “Housing Needs Assessment.”
⁷ Habitat for Humanity International, How does homeownership contribute to wealth building?, December 2020, habitat.org/our-work/impact/research-series-how-does-homeownership-contribute-to-wealth-building