2008 Data
Housing affordability has dropped in the past few years.
Some statisitics adapted from a report by the National Low
Income Housing Coalition, show what low income residents of King
County are facing in terms of paying for housing.
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In King County, Washington, the 2008 Fair Market Rent (FMR)
for a two-bedroom apartment is $942.
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In order to afford this level of rent and utilities, without
paying more than 30% of income on housing, a household must earn
$3,140 monthly or $37,680 annually.
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Assuming a 40-hour work week, 52 weeks per year, this level of
income translates into a Housing Wage of $18.12.
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In Washington, a minimum wage worker earns an hourly wage of $8.07.
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In order to afford the FMR for a two-bedroom apartment, a minimum
wage earner in King County must work 90 hours per week, 52 weeks per
year. Or, a household must include 2.25 minimum wage earner(s)
working 40 hours per week year-round in order to make the two
bedroom FMR affordable.
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The rent affordable for a minimum wage earner working 40 hours a week,
is $420.
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The FMR for a studio apartment in King County is $687.
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Monthly Supplemental Security Income (SSI) payments for an individual are
$637 in Washington.
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If SSI represents an individual's sole source of income, $191 in monthly
rent is affordable, while the FMR for a one-bedroom in King County is $783[1].
A unit is considered affordable if it costs no more than 30% of
the renter's income.
Home ownership affordability:
- The average priced single family home in Seattle is affordable at 126%
of 2008 median income[2]
2005 Data
Income to Housing Cost Ratio
Affordable housing is defined as paying 30% or less of gross
household income for housing costs.
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In 2005, nearly one-half of renters and one-third of home
owner households in King County paid more than 30% of their
income for housing costs.[3]
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The percentage of residents of King County who pay more
than 30% of their income for housing has risen progressively
over the past 15 years.
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There is a consistent pattern across the County, and all
four sub-regions, of about 67% of the persons living in
housing which they own being able to afford that housing.
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There is also a consistent pattern across the County for
levels of affordability among renters. Approximately 53% of
all renters pay 30% or less of their total household income
for housing costs.
Source: King County Benchmarks, 2006
Affordable Housing
Housing Affordability in Relationship to Income Level
- Only 10% of single family homes sold in 2005 were
affordable to a household at the median income.
- More than 90% of rental units in King County were affordable
at 80% of median income
- Nearly 50% of rental units in King County were affordable to
households earning 50% of the median income.
- South King County has the largest number of units of
affordable rental housing with 63,800.
- Seattle has 56,100 units affordable to households with incomes
below 50% of the median income.
The Housing Affordability Gap
One way to summarize trends with respect to housing
affordability in King County is to look at the housing
affordability gap. This gap is the difference between actual
home sale prices and the price that families can reasonably
afford.
The affordability gap has sharply increased in King County since
the early 1990s, when the median home price and the affordable
home price were roughly equivalent.
In 2005, the median home price increased nearly 15% while median
income rose less than 1%.2 In dollars, this
calculates to a gap of $103,900 for median income households.
Source: King County
Benchmarks, 2006 Affordable Housing
Housing Affordability and Homelessness
For people with low incomes, the high cost of housing is
critical.
Four out of five households with incomes below half of the
median income pay more than 30% of their income for housing.
This puts them at high risk for homelessness.
The proportion of King County households in this low income
bracket is increasing, while housing costs continue to increase
and availability of rental housing is decreasing. These trends,
combined with other cost of living expenses, further increase
the risk of homelessness for King County residents.
The price of housing, both for sale and for rent, is one of the
most critical issues related to homelessness. The general lack
of affordable housing contributes to more people becoming
homeless. For those who have the lowest incomes, affordability
of housing is a determinant of where they will live, how they
access their jobs, childcare, and what service opportunities are
available.
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Affordable housing is not always accessible to homeless
people and those with low incomes.
Unfortunately, for many adults with poor credit, eviction
histories, or criminal backgrounds, affordable housing is
problematic. A number of transitional and permanent affordable
housing programs, many being funded through HUD low-income
tax-credit properties, and have fixed stipulations that make it
difficult for those with such obstacles.
Along with creating more affordable housing, institutions,
companies, and organizations must consider that the barriers
causing homelessness may be the same ones preventing individuals
and families from being re-housed. These barriers will need to
be addressed if the goal of ending homelessness is to be
realized.
The existence of affordable units does not mean that they are
available to low income households. Many are occupied by
households with higher incomes.
In 2006, the rental vacancy rate dropped to 5.6% for the
Seattle-Bellevue-Everett Metropolitan Area. As vacancy rates
have fallen, and rents have increased, it has become much more
difficult for low-income households to compete for affordable
rental housing. The diminished vacancy rate, coupled negative
credit or criminal history, presents an even greater challenge
to find affordable housing.
Source: Claritas 2006 Update (Census
Tract Level)
Home Ownership
For many, home ownership represents the American Dream.
Property ownership is often used as a proxy to represent
permanence and community stability. For the past few years there
has been a national increase in homeownership. Many attribute
this, in part, to low barrier entry loans. Financial
institutions have competed for new customers by lowering
qualifications, screening and down-payment thresholds. In 2007
this arrangement underwent a massive upheaval as financial
institutions and borrowers experienced financial pains. The dust
has yet to settle as adjustable rate mortgages (ARM’s) are still
recalibrating and the foreclosure rates continue to increase in
volume. Predatory lending has also been a serious issue for those trying
to re-finance exorbitant mortgage payments.
For all of the focus on bankruptcy and foreclosure, the increased
ownership opportunity has been overlooked by many. For the first
time many people were able to qualify and purchase a home. While
it is true that the foreclosure rate has been climbing it still
represents a small percentage of the new loans.
Locally, the 2006 data reports that 439,250 (59.4%) housing
units were occupied by home owners. This is slightly down from
the 2003 rate of 59.7%.
- North King County has the highest home ownership rate with
72.0% of the 54,038 units owner occupied
- East King County reports 123,273 (69.3%) owner occupied units.
- Seattle has the highest number of units with 265,956 and at
the same time is the only sub-region in King County with more
renter occupied units than owner occupied units. Owners occupy
125,478 (47.2%)
- South King County includes 242,115 units with 62.6% owner
occupied.
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