Low housing supply one of our biggest economic and social challenges
While the outlook for 2017 is promising on many fronts, housing affordability threatens our continued success. Ironically, the state’s economic strengths pose perhaps our toughest challenges: addressing the crisis in affordable housing.
Across Washington, rents and home prices have increased faster than nearly all states. We’re the third most expensive state in which to buy a home, and Seattle is the most expensive metro area anywhere outside California. We haven’t been building enough housing for even normal economic times. From 2010 – 2015 we grew by 345,000 people but added only 103,000 housing units. At 3.3 percent statewide, Washington’s vacancy rate is half of what economists agree is healthy, and we are as low as 1 percent in some cities.
This shortage is driving middle-income workers out of the communities where they work. Many manufacturers in key sectors including aerospace, maritime and life sciences, are having difficulty sourcing a skilled workforce nearby. This is beginning to impact our ability to recruit new employers into the state, and left unchecked, will drive out existing manufacturing jobs as employers find it too difficult and expensive to fill positions.
Data also tell us that a lack of affordable housing increases homelessness. Housing affordability replaced unemployment as our biggest driver of homelessness. For every $100 increase in rent, we see up to a 30 percent increase in homelessness.
Gov. Inslee has invested $240 million to fight homelessness. We continue leading innovative, data-driven approaches like rapid rehousing, housing first and coordinated entry.
Affordable housing and homelessness is a poignant example of the co-dependence of community and economic development. At Commerce, we launched the Office of Youth Homelessness and opened important conversations on land-use policies. There are many tough debates ahead in in Olympia and Washington D.C.. I invite your thoughts and encourage your active participation in the days to come.