Data Analysis

 Housing Needs Assessment

How many housing units are needed to serve the unmet demand of middle-income populations in Bellingham?
Can the supply of housing stock be matched to the needs of Bellingham’s labor economy?

Understanding the Housing Needs Assessment (HNA)

Both of the above research questions guiding my data analysis can be investigated through the existing methodology of a Housing Needs Assessment (HNA), a broad overview of a city and county. Available data metrics tend to keep market rate housing inventories separate from subsidized affordable housing inventories (Bellingham Housing Statistics Story Map, 2022; Housing & Human Services Story Map, n.d.). In consulting with one department manager at the Opportunicy Council’s Home Improvement Department, it was expressed that the reporting data that most social service programs focus on tracking is the total number of clients served and units produced – for weatherization and home repair services, as well as affordable housing and housing support services. The amount of time eligible clients spend on waitlists was not part of their public data reporting. Current waitlists in Bellingham for weatherization and home repair services are reported to be over two years, while waitlists for subsidized housing units and housing choice vouchers are often considerably longer than two years. Receiving a dedicated long-term housing subsidy like Section 8 housing vouchers is much like winning a lottery.

Senior staff at housing service provider agencies report on the continually shifting baseline of ever increasing populations of people experiencing housing cost burdens while at the same time, programs struggle to increase already limited capacity. The operational result is an environment of triage, where incoming clients are sorted along metrics of highest need; anyone not experiencing an active and immediate crisis is often sidelined into a waitlist. This reporting is corroborated by the United Way’s Alice Report, as presented in the Introduction section of this report, showing national and global trends of steadily increasing housing cost burdens for middle income wage earners and ALICE populations (Washington | UnitedForALICE, 2022).

The numbers represented in Figures 21 and 22 (Figures 12 and 13, repeated) are a good indicator of the existing operational capacity of housing support services in Bellingham, Washington. Current services and programs are targeted almost exclusively to households earning below poverty level income. There is no comparison between total capacity of current services and overall need within the  Housing & Human Services Storymap.

Conducting an HNA: Community Profile, Workforce Profile, Housing Inventory, Gap Analysis

There is a well defined methodology for conducting a Housing Needs Assessment, required as part of the Comprehensive Planning process under Washington’s Growth Management Act (Ramsey, 2020). This methodology includes four general sections: community profile, workforce profile, housing inventory, and gap analysis. In preparing my data analysis, I reviewed the City of Bellingham’s 2016 Comprehensive Plan, the 2018-2022 Consolidated Plan, a Housing Needs Presentation to City Council on February 9, 2023 by the Long Range Planning Manager, the 2023 – 2027 Consolidated Plan Overview published in March 2023, and the Housing Statistics and Housing Services Storymaps published on the City of Bellingham website. Not wanting to duplicate work already being done by the city planning department, I used the data analysis below to fill-in information I didn’t find in existing reports, and to arrange data visualizations in a way that allowed further interpretation of the data. Building from the City of Bellingham Housing Statistics and Housing Services Storymaps, I filled-out my community profile, workforce profile, and housing enventory using the 2022 Rental Market Study published by COB Staff, Census Quickfacts, and Zillow Home Values.

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Communicy Profiles:
Who Has Access to Homeownership and Who Can Afford Median Rent in Bellingham, Washington?

Household Characteristics

Figure 23 shows that Bellingham currently has more renters than owners, with 46% of households who live in a home they own, and 54% of households who live in a home that they rent. Figures 24 and 25 shows that Bellingham’s existing housing stock doesn’t match current household sizes, and reflects an oversupply of large single family homes. As shown by the calculations in Tables 3 and 4 below, a renting household in Bellingham that earns Area Median Income has a housing budget of $1,475/mo and can just barely afford a studio or one bedroom unit, but not a 2-bedroom or larger unit. When combined with the inventory of Housing Units by Bedroom Count shown in Figure 25, one can see that smaller households of all income levels compete for a constrained supply of smaller housing units.

Housing Cost Analysis                                                                                                         

Table 3, below, shows a calculation of a monthly housing budget and a mortgage purchase budget for a household earning median income in Bellingham, and Table 4 shows a survey of median home values and rental rates in Bellingham, Washinton. In 2021, households earning the City of Bellingham median household income of $59,163 could afford to purchase a home costing $305,000, assuming the standard mortgage terms as shown in Table 3 (Affordability Calculator – How Much House Can I Afford?, n.d.; Mortgage Calculator, n.d.). The current median home sale price in Bellingham is $635,981, as shown in Table 4 (Bellingham WA Home Prices & Home Values | Zillow, n.d.). Under standard lending terms shown in Table 5, home buyers have to be earning more than 200% area median income to afford Bellingam’s current median home sale price,asshown in Table 4.

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Housing Inventory:
What type of housing is currently available, and who is it owned by?

Figure 26 and Table 5 below shows a detailed breakdown of Bellingham housing inventory by unit type and property ownership. This chart is compiled from two reports prepared by city planning staff, one looking at multifamily housing, and the other looking at single family housing. When combined into one chart, these reports give a more complete picture of Bellingham housing stock by building type, and they reveal rates of out-of-town rental property ownership by building type. Figure 26 and Table 5 reveal that out-of-town property owners hold far more multifamily buildings of more than five units than any other housing type, and that property owners with an address within Whatcom County own 64% of all rental properties.

Table 5 (below) – Total of All Types of Bellingham Housing Units by Owner Location, showing % of total for owner locations. Combined totals from “Bellingham & UGA Single-Family Home Ownership by Holdings and Owner Locale (2022)” and “Bellingham & UGA Multi-Family Home Ownership by Unit Type and Owner Locale (2023)” reports by COB planning staff.

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Most Single-Family Rental Properties are Owned by Local Residents

Table 6 shows a detailed breakdown of single-family housing inventory by owner mailing address, from the data analysis conducted by City of Bellingham planning staff in “Bellingham & UGA Single-Family Home Ownership by Holdings and Owner Locale (2022)”. Seventy-five percent (75%) of single-family homes in Bellingham are owner-occupied. Twenty-five percent (25%) of all single-family homes in Bellingham are rentals, and 17% of single-family rental homes are owned by someone who lives in Bellingham.

Twenty percent (20%) of single-family rentals in Bellingham are owned by someone who only owns one rental home: a total of four thousand, three hundred and sixty-four (4,367) homes. Most these small holding rental property owners live in the city of Bellingham, accounting for just over twenty-eight hundred (2,800) total homes. Three hundred and twenty-nine (329) either have a Bellingham PO Box or live in Whatcom County. One thousand, one hundred and sixty-nine (1,160) of these homes are owned by people who live outside Whatcom County.          

Four percent (4%) of single-family rental properties are owned by people who own less than ten total rental units, a total of eight hundred and eighty-four homes (884). Six-hundred and twenty-seven (627) of these small-holding rental property owners live within the city of Bellingham. One-hundred and twenty-four (124) of these owners have a Bellingham PO Box or live in Whatcom County, and one-hundred thirty-three (133) live somewhere else in Washington state or outside of Washington state.

One percent (1%) of single-family rentals are owned by people who own ten or more rental homes. All of these large holding property owners live in the City of Bellingham or Whatcom County. Within this group, most own between ten (10) and twenty (20) units, with only two families that own more than twenty units: Mike and Robin Stacy own twenty-six homes (26), and the Hansen family owns close to one hundred (100) homes.

More Than Half of all Apartment Buildings Are Owned by Local Residents

Table 7 shows a detailed breakdown of multifamily housing inventory by building type (number of units in building) and owner mailing address from “Bellingham & UGA Multi-Family Home Ownership by Unit Type and Owner Locale (2023)” prepared by city staff. The report reveals that only 9% of multifamily units are owner occupied. One-third (35%) of multifamily building owners have an address outside of Whatcom County, but more than half (58%) of multifamily units are owned by people with a Bellingham address, a Bellingham PO Box, or a Whatcom County address. While out-of-town investors buying up residential property for investment purposes is often cited as a factor contributing to housing crises, it is important to recognize that a significant majority of all rental units, both multifamily and single-family, are owned and operated by local residents.

Large apartment buildings of more than five units also make up two-thirds (62%) of all multifamily housing in Bellingham. While the breakdown of single-family homes verses multifamily housing units is very close to a fifty-fifty split according to the analysis conducted by city staff using tax parcels records, it is also important to recognize that single family properties occupy considerably more land area than multifamily housing units. In Bellingham, low-density single-family use takes up approximately 72% of all residential land area, with multifamily and urban village zoning taking up just 28% (see Figure 28, showing total acres of zoning types in Bellingham from the 2016 Comprehensive Plan, Land Use Chapter).

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Gap Analysis:
How much new housing is needed to meet current needs and projected population growth? What income levels need to be supported with greater housing access?

              One of the primary concerns I wanted to investigate with my data analysis was connecting the lines between total housing units, housing costs, household income, and available jobs. Chasing the shifting baseline of ever-growing housing needs with constrained funding sources had always seemed like an ineffective and imprecise way to deliver housing support. One of the most significant phenomena in both national and international trends is the steady rate of decoupling between wages and housing costs. My inquiry was guided by the core question, “what would it look like to match the funding and production of housing support to the scope of housing needs?” What would it look like if were to assume, as a basic design metric, that price, type, and availability of housing units should directly correlate to the local labor economy?

Planning Housing For All Income Levels

Passed in 2021, Washington State House Bill 1220 starts to address the issue of a shifting baseline in housing needs by requiring municipalities operating under the WA Growth Management Act to accommodate “housing for all income levels” in their comprehensive plans. In early 2023 Commerce published guidance for a new methodoly in data tracking, with the “Housing For All Planning Tool (HAPT)” (Washington State Department of Commerce, 2023b). In March 2023, they published an update with a new methodoly for assessessing housing needs for all municipalities operating under Washington’s Growth Managemnet Act (Washington State Department of Commerce, 2023a).

Since the Housing For All Planning Tool was published, City of Bellingham Planning staff have published several staff reports analyzing Bellingham housing needs using the new methodology. These reports are publicly available in the Bellingham City Council agenda packets and recorded videos of staff presentations to the City Council. Staff have been kind enough to share files of many of these reports with me directly. I have taken the original data analysis that I conducted using Bureau of Labor Statistics Wage and Number of Jobs data, and the ACS Household Income data, and reviewed it against the city staff housing reports.

Below is the recent housing needs assessment for Whatcom County using the new Housing for All Planning Tool (HAPT) methodology, with extrapolation of Bellingham’s portion – referencing Planning Director Blake Lyon’s presentation to Bellingham City Council on June 5^th, 2023. The HB 1220 methods track housing needs across percent of Median Income, from 0% – 30%, 30% – 50%, 50% – 80%, 80% – 100%, and 100% – 120%. As described in Lyon’s presentation, Bellingham needs to produce 524 affordable housing units every year over the next 20 years. The implications of which are that half of all new housing units need to be affordable to households earning less than area median income, and half of those need to be affordable to households earning less than 30% area median income.

I created the visual charts in Figure 29 and 30 below to present the Housing Needs Analysis data tables in a format that could be more easily digested and understood by non-planning experts and the broader community. Shown in this way as mirrored bar graphs, or “butterfly graph”, the disparities between income and homeownership and the mismatch between existing households and available housing units is more apparent. Figure 29 shows the Gap Analysis, comparing current household population by income against current housing inventory by unit cost. While the graphs show a surplus of housing units in the 50% to 80% of area median income cost range, it also shows a deficit of overall housing units at the 120% median income range, meaning that those higher income earners are likely out-competing lower income earners at the $1,000/month unit rent range. Figure 29 also shows the overabundance of rental units for lower-income housing options, while most owner-occupied units are held by people earning greater than 120% of area median income. It also shows an overall 1:1 household to housing unit ratio. The ratio of housing units to households is also referred to as a “vacancy rate”, with Bellingham showing a current vacancy rate of about 1%. According to the City of Bellingham’s Housing FAQs web page, “A healthy vacancy rate is 5-7% for rentals and around 2% for homeowners” (Housing FAQs, n.d.).

Figure 30 shows the same comparison between households and housing inventory by wage range and unit cost, with the 20-year project population growth and housing development goals described by the HAPT methodology. Table 13 shows the yearly housing production goals needed to meet projected population growth at low-, middle-, and high-income ranges over the next 20 years. The Housing For All Planning Tool provides a methodology for tracking housing inventory and cost against a region’s household income, broken down across income ranges. This methodology reiterates the statewide mandate to produce a full range of housing options: only adding market-rate units does not produce the needed housing for populations earning below area median income. This means housing developers must design and produce housing units that are affordable to households earning below area median income as an upfront market product, rather than a secondary market outcome. Further, it is necessary to increase the operational and infrastructure capacity for the development of homes available for owner occupancy at low- and middle-income levels.

20-year Production Goals for Total Population at Low-, Middle-, and High-Income Ranges.

Income Category (Median = $59,163)	20-year Production Goal for New Housing Units	Yearly Quota to Achieve 20-year Goal:
0% – 80% AMI	10,478	524
80% – 120% AMI	2,068	103
Above 120% AMI	3,995	200
TOTAL	16,541	827

                   The 20-year housing production goals and yearly quotas necessary to achieve the goals shown in Table 8 above, reveal the absolute necessity to find new ways of developing housing that is affordable to populations earning below area median income and populations earning below federal poverty levels. Furthermore, housing units that are affordable to these income levels must be produced as an upfront market product. As described in the Introduction Section of this research, relying solely on supply-side production of new market-rate units does not adequately provide housing to all economic sectors, even when added market rate supply may create some incremental reduction in overall housing costs (World Economic Forum Insight Report, 2019). While some portion of the necessary housing units available households earning below 80% AMI can be produced through expanded subsidy funding for affordable housing development, a significant portion of it will have to be developed as market-rate housing.

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Key Findings & Summary

Housing Inventory: What type of housing is currently available, and who is it owned by?

• A household must be earning more than 200% area median income to afford current median home prices in Bellingham – currently at $635,981.
• The majority of renters earn below 120% of Area Median Income, while the majority of homeowners earn above 120% of Area Median Income. This represents a stark socioeconomic split between households who rent their homes and households who own residential property.
• Single Family Homes:
  • 50% of all housing units in Bellingham is made up of single-family homes, but the land that these homes occupy takes up nearly 75% of residentially zoned land.
  • 75% of single-family homes in Bellingham are owned-occupied.
• Multifamily Homes:
  • 30% of all housing units in Bellingham are in apartment buildings of 5 or more units.
  • 20% of all housing units are made up of a combination of condominium, duplex, triplex, fourplex, and mixed-use apartments (urban village) housing types.
  • Only 9% of all multifamily housing units in Bellingham are owner-occupied.
• 43% of all (presumed) rental unit owners live within the city of Bellingham, and another 22% either maintain a PO Box within the City of Bellingham or have a Whatcom County mailing address. Combined, this means a total of 65% of all presumed rental units in Bellingham are owned by local community members.
• Out-of-town property owners hold 7,792 multi-family housing units (35% of all multi-family), and 1,302 single family homes (6% of all single-family).
• Rates of Owner Occupancy may be dropping. More research would be needed to confirm this observation but, if confirmed, dropping rates of owner occupancy would demonstrate a systematic transfer of wealth away from populations with income below AMI, towards populations with income above AMI. This translates directly into increasing disparity across all racial minorities and marginalized populations, as well as direct impacts to public health.

Gap Analysis: How many housing units are needed to serve the unmet demand of middle-income populations in Bellingham? 

• According to the House Bill 1220 “Housing For All Income Levels” methodology, Bellingham needsto add at least500 housing units per year over the next 20 years that are affordable to households below area median income, focusing on units affordable to households earning less than 50% area median income.
• To meet the goals of the Housing for All planning tool, 52% of all new housing units need to be affordable to households earning less than 50% AMI, and 25% need to be affordable to households earning less than 30% AMI.

Can the supply of housing stock be tracked against the needs of Bellingham’s labor economy?

• HB 1220 provides detailed methodology for tracking Household Income against Housing Inventory & Unit Cost. This researcher suggests that jobs and wage data from Bureau of Labor Statistics should also be included in this methodology to further link housing inventory and planning goals to the local labor economy.

It is worth observing a potentially alarming data trend of dropping owner occupancy. Figure 23 in the above chapter showed an Occupancy & Tenure Ratio of 46% Owners to 54% Renters from the 2016-2020 American Community Survey, while Table 5 in the above showed an Occupancy & Tenure Ratio of 42% Owners to 58% Renters from the tax parcel analysis conducted by city planning staff in 2023 comparing parcel address to owner address. While these two data points were created using two different methods and cannot be directly compared, it may indicate that the rates of owner occupancy in Bellingham are dropping as housing prices increase, which would correlate to the growing disparity between wages and home prices as well as growing rates of wealth inequality. A shift towards lower rates of owner occupancy and higher rates of renter occupancy is alarming first in that it can represent destabilization in housing security for renters, who make up more than half of the population. Second, dropping rates of owner occupancy represent a steady rate of transfer and consolidation of property ownership, and the associated wealth and financial equity, away from lower income populations and towards higher income populations. Rates of homeownership verses rental tenancy should be closely watched and documented over time, using both the method of tax parcel analysis conducted by city planning staff and the American Community Survey Census data.

In this section, I delved into the quantitative aspect of my research, specifically focusing on the Housing Needs Assessment (HNA) to understand the housing demand among middle-income populations in Bellingham. I explored how this demand correlates with the local labor economy, aiming to bridge the gap between housing supply and demand. Through various data analyses and methodologies, I uncovered disparities between available housing inventory and the needs of different income groups. My investigation underscored the necessity of comprehensive planning to address these gaps, in line with Washington State House Bill 1220, which mandates housing for all income levels. Moreover, I emphasized the importance of integrating job and wage data into housing planning to ensure alignment with the local economy. Additionally, I raised concerns about declining rates of owner occupancy, highlighting potential implications for housing stability and wealth distribution within the community.