Spokane Journal of Business

The Journal’s View: Spokane housing shortage should be treated like the crisis it is

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Spokane’s housing shortage has reached a crisis point, and the private and public sectors must come together to find solutions to a problem that’s quickly getting worse.

Quality of life and a strong education system are two cornerstones of the value proposition that economic development advocates pitch to companies looking to expand or relocate to the Spokane area. A key component of quality of life always has been that a typical, working-class family can afford to buy a home in the Spokane market. That likely isn’t true anymore.

The housing affordability index for Spokane County fell eight points to 101 in the second quarter of 2020, the most recent quarter for which data is available through Eastern Washington University’s Institute of Public Policy and Economic Analysis. For that index, a higher score suggests greater affordability, with anything under 100 suggesting homes are affordable to fewer people. 

In June 2020, roughly around the time that affordability index was calculated, the median sales price recorded by the Spokane Association of Realtors was $295,000. Last month, that number had climbed to $341,000, a 16% increase over the course of nine months. That could be comforting news if you’re a current homeowner watching your equity rise, but it’s making home ownership less obtainable for a greater number of people.

One more point on affordability: While Spokane traditionally has boasted greater affordability than the state as a whole, it no longer can do so. Its 101 score on the index was below the state’s 106. The scores had been comparable for the previous two years following a period in which Spokane was consistently more affordable than the state as a whole by more than 10 points.

The rising prices aren’t occurring exclusively because of market demand, but rather because of market constriction, bordering on market paralysis. The most recent Realtors association report showed 209 properties for sale through the Multiple Listing Service, representing an 11-day supply. Traditionally, a six-month supply has been considered a balanced market.

A recent report by the Realtors group estimates the Spokane market has been underbuilt to the tune of 32,000 housing units between 2010 and 2019. Roughly speaking, that means we’re short enough units to house the entire population of Lewiston, Idaho.

A number of actions need to be taken to address this shortage, and builders say it won’t happen quickly. But here are a few places to start.

At the state level, stronger reform of condominium laws needs to become a priority. State leaders made some changes to the Washington State Condominium Act of 2009, but some developers say it didn’t go nearly far enough and condominium development still only occurs in pockets here and there—typically only involving high-end units.

At the local level, the city of Spokane needs to take a long, honest look at its Centers and Corridors development plan. Development simply hasn’t occurred in the pockets the city has designated to a scale that addresses Spokane’s housing needs in a meaningful way, despite the plan’s good intentions.

The housing crisis stands to get worse before it gets better, and a coordinated effort is needed sooner rather than later.

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