Washington’s growing population is increasing the demand for homes beyond the supply. State demographers predict our population will continue to grow by one percent per year, increasing to 8.3 million by 2030. Growing families and in-migration heighten the need for more homes. But there are more people looking than there are homes available, and that’s pushing prices up.

According to the Center for Real Estate Research at Washington State University, many counties experienced dramatic increases in home prices last year: Clark County, 26.8 percent; King County, 17.8 percent; Pierce County, 21.4 percent; Spokane County, 21.5 percent; and Thurston County, 29.2 percent. Across the state, home prices increased by an average of 19 percent last year. With no action by the Legislature to expand the housing supply, the problem is likely to worsen before it improves sufficiently to meet this market dynamic. The Housing Affordability Index is one way to measure the misery produced when home seekers increase faster than the housing supply. The index analyzes the degree to which home ownership is within reach of typical Washington families. A score over 100 means people have more income than they need to afford a home; 100 is the break-even point where income just meets the cost for an “average-priced” home.

In 2006, the Housing Affordability Index rating for our state fell to its lowest point in 12 years! The affordability crunch is hitting Kitsap County residents particularly hard: County rated a dismal 80 on the scale, meaning typical families only have 80 percent of the income required to purchase an average home, which costs about $390,000.  The news is worse for first-time home-buyers, who have only about half of the income needed to buy a “starter” home.  The 56 percent affordability rating released last month was the third consecutive quarter of record-low rankings since the Center for Real Estate Research was created in 1989. The Washington REALTORS® and it stakeholders are attempting to fix this problem, but legislative assistance is a vital part of the equation.

The purchase price of a home is just the beginning of the affordability vice. When home prices increase, so do property taxes, and this crushes family budgets. That’s when family problems begin to touch on all of our lives. People have to look for affordable homes further and further from where they work. An increasing number of commuters adds to freeway congestion and the pressure on already-strapped government to build more roads and infrastructure of all kinds.

Despite the housing crisis, homebuyers were not among lawmakers’ priorities this year. The legislative graveyard is full of bills that would have expanded all kinds of housing options and made fuller use of the buildable land available.

Lawmakers killed a bill requiring that local Growth Management plans result in no net loss of housing. They killed a measure to let home owners build “accessory dwelling units,” such as apartments over garages and “mother-in-law” apartments. The Legislature refused to allow all cities to provide a property tax exemption for multi-use housing – an option only available to cities over 30,000 now. Also dead is a proposal that would have allowed a single building lot to be divided into two or more lots, as long as together the average area of the lots met the legally required minimum.

Ignoring growth doesn’t prevent it, anymore than ignoring traffic will make it go away. By not addressing the challenges that population growth brings, legislators are consigning Washington residents to sprawl, leap-frog development, more traffic congestion, and higher property taxes. As the home crunch worsens, it will be more and more difficult for policymakers to ignore the state’s home ownership crisis. The Washington REALTORS® will be refocusing its efforts to move this vital issue back onto its priority list in the next legislative session.