1 AFFORDABLE MIDDLE- INCOME HOUSING ADVISORY COUNCIL THE NEED & THE OPPORTUNITY
2 THE NEED AFFORDABLE MIDDLE- INCOME HOUSING Seattle’s recent economic growth has brought tremendous ADVISORY COUNCIL opportunity and prosperity to the region—but it has also created a dire need for more housing choices affordable to low, moderate, and middle-income households. If Seattle is to remain an equitable, welcoming, and just city, we must create more housing options so that people who work in Seattle can live in Seattle and benefit from all our city has to offer. We must preserve a strong community open to working families, including our teachers, firefighters, nurses and thousands that keep our small businesses going. The Affordable Middle-Income Housing Advisory Council will focus their efforts on creating more rental and ownership housing choices for Seattle’s middle-income earners.
3 Seattle is growing fast! From 2010-2017, employment has grown by 25% (46 new jobs per day), while housing has grown by only 13% (15 new homes per day). 700,000 1.7 581,780 600,000 558,023 1.6 535,430 514,710 503,089 483,318 473,921 462,985 500,000 1.5 Jobs-to-housing ratio 400,000 1.4 348,117 300,000 1.3 340,479 332,878 323,445 317,747 313,015 310,824 308,516 200,000 1.2 100,000 1.1 0 1 2010 2011 2012 2013 2014 2015 2016 2017 Jobs:Housing Covered Employment Housing Units *Sources: PSRC Quarterly Census of Employment and Wages, WS Employment Security Department, 2018; and Washington State Office of Financial Management, 2018
4 During that time, Seattle Multifamily Median Rents, 2010-2018 we’ve seen rents $2,500 $2,156 go up... $2,000 $1,495 $1,500 $1,000 $500 $0 *Source: Based on Zillow Rent Index, 2010-2018, 2010-11 2011-01 2011-03 2011-05 2011-07 2011-09 2011-11 2012-01 2012-03 2012-05 2012-07 2012-09 2012-11 2013-01 2013-03 2013-05 2013-07 2013-09 2013-11 2014-01 2014-03 2014-05 2014-07 2014-09 2014-11 2015-01 2015-03 2015-05 2015-07 2015-09 2015-11 2016-01 2016-03 2016-05 2016-07 2016-09 2016-11 2017-01 2017-03 2017-05 2017-07 2017-09 2017-11 2018-01 2018-03 2018-05 2018-07 2018-09 2018-11 2010 2011 2012 2013 2014 2015 2016 2017 2018 for Seattle City, which estimates typical asking rents for market rate units. Figures seasonally adjusted but not adjusted for inflation.
5 …and median Seattle Home Values, 2010-2018 home values have nearly $728,300 $800,000 doubled. $700,000 $600,000 $500,000 $381,600 $400,000 $300,000 $200,000 $100,000 *Source: Based on Zillow Home Value Index, 2010-2018, for Seattle City, which estimates $0 median home value for all ownership products 2010-01 2010-03 2010-05 2010-07 2010-09 2010-11 2011-01 2011-03 2011-05 2011-07 2011-09 2011-11 2012-01 2012-03 2012-05 2012-07 2012-09 2012-11 2013-01 2013-03 2013-05 2013-07 2013-09 2013-11 2014-01 2014-03 2014-05 2014-07 2014-09 2014-11 2015-01 2015-03 2015-05 2015-07 2015-09 2015-11 2016-01 2016-03 2016-05 2016-07 2016-09 2016-11 2017-01 2017-03 2017-05 2017-07 2017-09 2017-11 2018-01 2018-03 2018-05 2018-07 2018-09 2018-11 2010 2011 2012 2013 2014 2015 2016 2017 2018 (e.g. single-family, condos, townhouses). Figures seasonally adjusted, but not adjusted for inflation.
6 What does this mean for Seattle’s moderate and middle-income households?
7 What is considered “middle income” $130,000 120% of AMI for a four- person family is $124,000 in the Seattle area? $120,000 $110,000 2018 area median $100,000 income(AMI) for a four- person family is $103,000 120% of AMI for a one-person $90,000 household is $87,000 $80,000 2018 area median income $70,000 (AMI) for one-person household is $72,000 $60,000 60% of AMI for a four- $50,000 person family is $62,000 $40,000 60% of AMI for a one-person annual household is $44,000 *Source: HUD adjusted area median income for Seattle-Bellevue HUD income Metro Fair Market Rent Area (King and Snohomish Counties), 2018
8 Who are middle income earners in Seattle? $130,000 120% of AMI for a four- person family is $124,000 two social $120,000 workers $124,800 $110,000 2018 area median $100,000 income(AMI) for a four- person family is $103,000 120% of AMI for a one-person $90,000 household is $87,000 police officer + stay-at- $80,000 firefighter home parent $84,700 $78,700 2018 area median income $70,000 (AMI) for one-person high school household is $72,000 two minimum wage $60,000 teacher $64,300 earners $62,400 60% of AMI for a four- $50,000 person family is $62,000 $40,000 dental assistant 60% of AMI for a one-person $42,700 annual household is $44,000 *Source: Estimated incomes based on QCEW, non-QCEW, 2017 income
9 What is affordable rent to middle-income $3,000/mo. 120% of median income can afford $2,800 per month households? $2,750/mo. $2,500/mo. A median income four- 120% of median income can $2,250/mo. person family can afford afford $2,200 per month $2,500 per month $2,000/mo. $1,750/mo. A median one-person household can afford $1,800 $1,500/mo. per month $1,250/mo. 60% of median income can afford $1,400 per month $1,000/mo. 60% of median income can $750/mo. afford $1,100 per month monthly rent *Assumptions: 30% of target income toward rent and utilities
10 What new rental housing has the market average $3,000/mo. 3-bed 120% of median income can $3,980* afford $2,800 per month produced 2010-2017? $2,750/mo. $2,500/mo. average A median income four- 120% of median income can $2,250/mo. 2-bed person family can afford afford $2,200 per month $2,440* $2,500 per month average $2,000/mo. 1-bed $2,070* $1,750/mo. A median one-person household can afford $1,800 average $1,500/mo. per month studio $1,560* $1,250/mo. 60% of median income can afford $1,400 per month $1,000/mo. 60% of median income can $750/mo. afford $1,100 per month monthly rent *Source: Dupre + Scott, 2017, average rents for occupied units built *This doesn’t even include utilities! between 2010-2017
11 The market is producing mostly Multi-Family Units by Size 2.70% smaller rental housing choices. 15.40% 17.10% Since 2010, less than 20% of new multi- family units have been larger than 800 64.70% square feet. Square footage: 0 to 400 400-800 800-1200 >1200 *Source: King County Assessor, 2018, for multifamily units built 2010-2018.
12 Many moderate to middle income rental households are experiencing housing cost-burden. *Source: HUD CHAS, 2010-2014
13 What is affordable homeownership to $1,000,000 middle-income $900,000 households ? $800,000 $700,000 $600,000 $500,000 120% of median income can afford a $471,7000 home $400,000 120% of median income can A median income four- afford a $333,100 home $300,000 person family can afford a A median one-person $393,000 home $200,000 household can afford a 60% of median income can $275,200 home $100,000 afford a $235,900 home 60% of median income can afford a $165,200 home sale price *Assumptions: PITI set at 35% of income, 10% down, 5% fixed 30-year
14 Are homeownership opportunities $1,000,000 affordable to $900,000 middle-incomes? $800,000 SF house $934,300 $700,000 townhouse $600,000 $751,800 $500,000 120% of median income can afford a $471,700 home $400,000 condo 120% of median income can A median income four- $602,200 afford a $333,100 home $300,000 person family can afford a A median one-person $393,000 home $200,000 household can afford a 60% of median income can $275,200 home $100,000 afford a $235,900 home 60% of median income can afford a $165,200 home sale price *Source: King County Assessor, 2018 Seattle home sales
15 Many moderate to middle income ownership households are experiencing housing cost-burden. *Source: HUD CHAS, 2010-2014
16 THE OPPORTUNITY AFFORDABLE MIDDLE- INCOME HOUSING ADVISORY COUNCIL The Affordable Middle-Income Housing Advisory Council will focus their efforts on creating more rental and ownership housing choices for Seattle’s middle-income earners. The Advisory Council brings expertise in investment and housing development and will make recommendations based on both economic analysis and true and deep engagement with communities and neighborhoods throughout our City. They will elevate investment strategies and innovative construction models to close the growing gap between housing that City subsidy may support and what the private market is producing—including tools to ensure equitable development in newly designated Opportunity Zones.
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