Affordable housing has morphed into a loaded term in Seattle. Many residents and city leaders say it’s disappearing or there isn’t enough of it.
The idea that affordable housing is endangered in Seattle is misleading, however, because it depends on what how you define “affordable.”
Keeping housing affordable means spending 30 percent or less of household income on housing, according to the U.S. Department of Housing and Urban Development.
“Affordable housing” as a technical term in general refers to housing developed with subsidies like tax dollars or grants reserved for residents based on income.
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For the average person, affordable housing means not feeling like too much of your money goes to paying rent or a mortgage.
In Seattle, more people are paying more for housing than in years past. Average apartments rent jumped 31 percent in the past four years to $1,644 per month, according to RealFacts. The median home price in Seattle rose above pre-recession levels and hit a record high of $543,500 in July.
So what does that mean for how much people should spend on housing?
According to an analysis from Trulia, a real estate information company, a person in Seattle earning an average wage would have to spend 31 percent of their income to afford the average rent on a two-bedroom apartment of $1,750 as April 2014. Compare that with renters in cities such as Miami, New York, San Francisco and Los Angeles, who pay 51 to 62 percent, of their income to afford an average two-bedroom apartment. Based on HUD’s 30 percent rule, Seattle is relatively affordable.
While housing costs have climbed, so has the metropolitan area’s median household income, which reached $66,345 in 2013, according to recent Census figures.
Based on the current median household income, here’s what households would ideally spend on housing according to the 30 percent benchmark:
|Percent of Household Median Income||Median Income||Housing costs per year at 30% of income||Housing costs per month at 30% of income|
A person earning the median household income would be able to afford the average rent of $1,644. That works for a single person, but families and anyone earning under 60 percent of the median household income have fewer options. Indeed, Seattle’s share of single people living alone is on the rise.
City leaders want to keep families and poor people in the city, but housing costs are just one piece of the affordability puzzle. As The Seattle Times reported last week, costs for middle class families soared by 32 percent from 2000 to 2012 – a far greater pace than incomes.
The top of the City of Seattle’s home page proclaims, “Working for a safe, affordable, vibrant, innovative, and interconnected city.” Read The Seattle Times editorial on the city’s efforts to produce more affordable housing.
Clearly the goal of keeping Seattle affordable is important to city leaders, but housing costs are heavily influenced by supply and demand and the demand is coming from the growing number of jobs here. For housing costs to go down, the market needs more supply or a major economic downturn like the one we had six years ago.
Housing costs are likely to keep rising in Seattle as the city adds more jobs and residents. Growth already causes tensions in neighborhoods that are developing more housing and becoming more expensive. It hurts pocketbooks, but I’d much rather live in a city where people can find work than one where jobs are going away (Hello, Detroit).