West Coast Housing Report

6 min read

States’ innovations chip away at the problem  

Much like America’s East Coast, the West Coast is struggling from a housing affordability problem – meaning Washington, Oregon and California. The region has five major metros—San Diego, Los Angeles, San Francisco, Portland and Seattle—whose home price medians are double or more the national average. A number of the smaller cities, especially in California, also see this price inflation. Homelessness rates are significantly higher in the region, while declining recently throughout much of America. Large companies are increasingly finding it difficult to field workforces, due to the working-class and professional-class exodus alike. In a recent poll by the Bay Area Council, 46 percent of Bay Area residents said they were thinking of moving in the next few years due to the prices.

The legislatures in all three states are starting to respond. This year they’ve passed a number of laws, and there are more proposals and ballot measures on the way. Each are designed either to increase the funding for affordable housing, or liberalize laws that would make it easier to build. Below is a breakdown of each state’s actions.

The Washington state legislature has been busy with housing measures starting early in 2018. The legislature included $106.8 million in its Biennial Capital Budget for the Housing Trust Fund, which will create a projected 3,000 new affordable units. The budget also includes $112.5 million for Brownfields redevelopment and other innovative home construction techniques. Legislation was passed that bans income discrimination, such as when landlords turn away prospective tenants who use federal or local housing subsidies. That bill, HB 2578, includes funds for landlord risk mitigation.

But the most substantive bill may be HB 2382, which will free up public land for affordable housing construction.

This bill was introduced by Rep. Cindy Ryu (D), who represents the Shoreline suburb of Seattle, and is concerned about the regional housing shortage. The legislation requires various state government agencies, rather than just hoarding underutilized property, to inventory it, so that it can be sold to various other government agencies, or to private firms, for the purpose of building affordable housing. This land can even be sold at discounts. As the final report for the bill, which became effective in June, states:

“Any state or local agency with authority to dispose of surplus property may transfer property to any public, private, or nongovernmental body on any terms agreeable to the parties, including a no-cost transfer, if the property is used for a public benefit. Public benefit means affordable housing development, or related facilities, for households at or below 80 percent of the local adjusted median income.”

The law’s impacts could be especially pronounced throughout greater Seattle. For example in King County, there are over 300 parcels of vacant or underutilized public land that exceed 20,000 square feet, and are within a quarter-mile of transit.

This past August, Oregon became the first state to legalize mass timber high rises. Following an addendum to the building code, the state will allow timber buildings to exceed six stories without special consideration.

The decision came after wood towers received approval from the International Code Council, which is a collection of code experts and industry leaders who create the guidelines from which Oregon models its own building code. ICC found that wood towers, if built following their recommendations, would be adequate in dealing with potential problems for loadbearing, waterproofing, sealing and seismic activity.

The addendum comes after Portland—which could be called the urban heart of America’s timber country anyway—has seen some recent timber tower activity. Path Architecture built Carbon12, which at 85 feet, is the nation’s tallest mass timber project. It is located in northern Portland. And Lever Architecture is set to surpass this with Framework, a 12-story, 90,000-square-foot mixed-use project that got a permit last summer from the state and the City of Portland. It was expected to be complete this winter, but is on hold because of financial difficulties.

Although these two projects, specifically, do not offer cheap units, the possible spread of the timber tower idea could be key for the future of affordable housing. Skyscrapers, after all, are more expensive than most low-rise housing because they’re built with reinforced concrete or steel. Using timber instead would reduce project costs, although this depends on whether other states follow Oregon in legalizing the idea.

California made national news recently with an aggressive housing bill-—SB 827—that would have transformed the state’s urbanized areas. Proposed by Senator Scott Wiener, the bill would allow mid-rise construction on any land within walking distance of high-frequency mass transit. The bill died at its first committee hearing.

But in August, a less ambitious bill overwhelmingly passed the senate: AB 2923. It gives authority to the Board of Directors for Bay Area Rapid Transit, the rail system serving metro San Francisco, to build transit-oriented development around rail stations. The law could create as many as 20,000 new units throughout the Bay Area, and must now be signed by Governor Jerry Brown.

And in this November’s election there will be a pro-housing ballot measure, Proposition 1. It would authorize $4 billion in general obligation bonds for programs, loans, grants and projects for a variety of housing types. The money would especially focus on housing services for veterans and the homeless (California is now second in the nation both in per capita homelessness, and in homeless population growth rate). The two main expenditures from Prop 1 would be $1.5 billion for the Multifamily Housing Program, which provides loans for building and preserving housing for those earning at or below 60 percent area median income; and $1 billion for the CalVet Home Loan Program, which loans to veterans wishing to purchase traditional homes, mobile homes or farms. The proposition has received $250,000 in support from the Chan Zuckerberg Initiative, which is the philanthropy that Facebook co-founder Mark Zuckerberg started with his wife.

As much as these various bills and propositions may help with housing affordability in Washington, Oregon and California, they aren’t going to fix the problem. The biggest metros in these states have had chronic housing shortages for decades. According to the state’s Legislative Analyst’s Office, California, for example, underbuilds by more than 100,000 units annually. For these markets to truly reach equilibrium, there would need to be overt top-down political action. But for now, measures like these can at least chip away at the problem.