Affordable Housing

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Affordable housing is a significant problem for many of San Juan County's workers and young families. The County has prepared two information sheets on the affordable housing issue:

Affordable Housing Defined (25 kB) clarifies what affordable housing means and indicates the income ranges by household size for very low, low, moderate and middle-income households.

Housing Affordability Crisis (21 kB) describes the problem of housing affordability in the County and some of the things the County is doing to make affordable housing more available.

Legal Context. The Washington Growth Management Act and State Housing Policy Act require state and local governments to promote a variety of residential densities and housing types to serve state and local residents, encourage the availability of affordable housing to all economic segments of the population of the state, and encourage the preservation of existing housing stock.

County Affordable Housing Policy. Section B.5 and Appendix 5 of the County Comprehensive Plan (links at bottom of page) address housing concerns and adopt housing policies for the County. These sections also include detailed information on the County's population and housing characteristics, including the 1999 Housing Needs Assessment.

Estimates of housing need are based on a number of simplifying assumptions about people's financial resources and decisions about how they will meet their own housing needs. Because of the unique housing market, environment, and employment characteristics of San Juan County, these estimates and assumptions must be considered with caution. However, it is clear that if the County is to continue to provide a place to live and work for a wide variety of people, and to move toward a balanced, year-round economy in accordance with the Vision Statement and goals of the Comprehensive Plan, the County must act assertively to provide opportunities for development of housing affordable to very low, low, moderate, and middle-income groups.

What is "affordable housing"?

Housing is considered affordable to a household if that household pays no more than 30 percent of its gross income for basic housing costs. For homeowners, this includes mortgage payments, property taxes, insurance, and utilities; for renters, this includes rent and utilities. Utilities costs include water, sewage disposal, electricity and/or gas for lighting, heating and cooking. Telephone service is not considered a basic housing cost.

How are very low, low, moderate, and middle income groups determined?

Household income groups are defined as very low, low, moderate, middle and upper income by the relationship of their income to the median household income for the County. Households with incomes up to 50 percent of the median income are classified as very low-income; households with 50 percent to 80 percent of the median income are classified as low-income. Moderate-income households are those with 80 percent to 95 percent of the median, and middle-income households are those with 95 percent to 120 percent of the County median. Upper-income households are those whose household income is greater than 120 percent of the median.

Household income groups are not differentiated by household size in the Census. However, income ranges for different household sizes are used by the State and the U.S. Department of Housing and Urban Development to determine eligibility for various state and federal housing programs. These income ranges are shown in the Affordable Housing Defined Fact Sheet (25 kB).

Is there a shortage of affordable housing in San Juan County?

Working people and people who grew up in the islands have a hard time finding permanent housing in the county at prices local wages can support. According to data developed by Washington State University, San Juan County's residents typically have the greatest gap between household incomes and housing prices of any county in the state. Typical first-time homebuyers in San Juan County can afford a housing payment of less than 40% of the payment they must make to purchase a starter home. The average for the state is 77%. With a full 20% down, a median-income family of four in our county can still afford only 66% of the payment needed on a median-priced home, while in most parts of the state, the median-income family can afford 110% of the price of the median-priced home. For more information, see the Housing Affordability Crisis Fact Sheet (21 kB).

Why is there a shortage of affordable housing?

There are several factors that have combined to create the current crisis for local working people and local employers:

• High land prices, reflecting the desirablility of living here, and competition for available homes and building sites;
• Competition for modest-priced homes by seasonal and vacation residents from throughout the northwest and the entire U.S.;
• Predominance of rural properties, where large parcel size, wells and septic systems add to housing development costs;
• High construction costs due to costs of transporting materials and workers to remote sites;
• High costs of providing water and sewer services with individual or small-scale community systems in the island environment.
• Proposed ferry fare increases that would more than double ferry fares between 2001 and 2007.

What measures can the County and State take to solve this problem?

Like many complicated problems, there is no single, simple solution. The County needs to address availability of land, cost of land, availability of infrastructure, and a lack of experienced developers. The County has a number of programs ready to attack various parts of the housing affordability problem.

• Urban Growth Areas. Urban growth areas are the places where growth is to be directed in the future under the state's Growth Management Act in order to preserve rural and resource lands and protect them from sprawling, low-density development. By establishing urban growth areas on each of the main islands, the County has provided areas where higher density is encouraged and can be used to minimize land and development costs per housing unit. Because of the high cost of land in rural areas, most new housing affordable to low- and moderate-income households is expected to be developed in these urban growth areas. Much of the existing supply of rural affordable housing is expected to be lost as current owners sell.
  
• Density bonuses for affordable housing. Higher density means more houses can be built on a given area of land, reducing the land cost of each housing unit. By making higher density available only for projects that include a substantial percentage of affordable housing through its density bonus program, the County encourages construction of year-round affordable units at higher density, rather than seasonal homes or vacation rentals. Density bonuses are available in specific areas of the Eastsound and Lopez Village urban growth areas, and in certain of the rural activity centers on Orcas Island.
  
• Rural residential clusters. While rural lands are intended to be developed at low density, the County has a limited program to permit affordable housing at 1/2-acre density in rural lands. A maximum of 100 units per decade on the ferry-served islands outside of activity centers may be developed under this program, which has a number of other limitations to minimize potential impact on rural characer.
  
• Gap financing. Past experience has demonstrated that these programs are not sufficient to induce builders and developers to construct enough affordable housing units in the conventional housing market. Gap financing is needed from state, federal or local programs dedicated to making housing affordable.
  
• Land banking. Purchasing land for affordable housing to prevent the price increases of the conventional real estate market driven by seasonal, vacation and retirement homes is one of the principal objectives of the non-profit community land trusts that operate on San Juan, Orcas and Lopez Islands. These land trusts are responsible for exemplary projects that have provided housing for a number of individuals and families.

Implementation through Public/Private Partnerships. In keeping with the County's tradition and vision of self-help, minimal government and maximum volunteerism, the County does not intend to construct or operate affordable housing. Rather the County's proposed programs emphasize partnerships with non-profit organizations, for-profit housing developers, or individual property owners as the builders and operators of affordable housing, with the County enabling the process and ensuring long-term affordability of units constructed.

Real Estate Excise Tax. The key to expanding the County's housing programs beyond making affordable housing possible to getting it built is the proposed establishment of a countywide Affordable Housing Fund with an ongoing source of revenue to purchase land and provide gap funding for affordable housing projects. The Washington State Legislature in 2002 passed special legislation that would permit San Juan County residents to enact a 1/2% real estate excise tax (REET) to fund affordable housing programs.

Affordable Housing Fund Commission. Ordinance 20-2002 establishing an affordable housing fund and a commission to direct its use was adopted by the Board of County Commissioners in November 2002. The commission has been appointed ansd is expected to begin its work in early 2003.

For additional information, see the Housing Affordability Crisis Fact Sheet  (21 kB).

Resources and Links:
County policies, and Internet sources for housing affordability information.

Comp Plan Housing Element (§B.5)   (177 kB). The Housing Element provides information, goals and policies for housing in the County.

Comp Plan Appendix 5 (Housing Data, including the 1999 Housing Needs Assessment).  (684 kB). The Housing Needs Assessment provides additional information on income, employment, housing sales, housing construction, housing costs, and housing needs of special population groups such as the elderly and the disabled. It also provides information on a number of federal and state housing programs.

Affordable Housing Defined Fact Sheet   (25 kB).

Housing Affordability Crisis Fact Sheet   (21 kB).

Community Land Trusts are non-profit groups that build affordable housing for workers and families through a combination of local donations of cash, labor and materials, and state and federal grants and loans. Each of the land trusts has its own web site:

[Note: these links will take you to other Web sites on the Internet.]

San Juan Island: San Juan Community Home Trust

Orcas Island: OPAL Community Land Trust

Lopez Island: Lopez Community Land Trust