MYTHBUSTING with Hart Hodges

WWU professor debunks some of Whatcom County’s most common misconceptions about growth

Heidi Schiller
   Lately, it seems every interest group and organization in Bellingham and Whatcom County has a study to back up their claim regarding how the area should or should not grow, and the studies’ results often seem to contradict each other.
   Hart Hodges, an assistant professor of economics and director of the Center for Economic and Business Research at Western Washington University, cautions Bellingham and Whatcom County residents not to swallow myths about the area’s economy without a grain of salt or a rigorous closer look.
   In his office on the third floor of Parks Hall on Western’s campus, Hodges stares at a large computer screen, virtually flipping through a long queue of e-mails from colleagues and community members doing just that — inquiring about his center’s research; some in support and others in dispute of his findings. He seems to appreciate the interest either way.
   “I’d like to see us as a community be more constructive with our testing procedures,” he said. “There seems to be a proliferation of neat ideas that no one is willing to sit back and analyze.”
   Hodges said he thinks many local groups use economic studies — sometimes of different regions of the country — to support social and personal claims without closely analyzing those studies’ methodologies.
   Hodges, who has a bachelor’s degree in history, a master’s in environmental management and a Ph.D. in economics, has lived in Bellingham for six years. He’s headed Western’s Center for Economic and Business Research, which focuses on outreach and research on the local economy, for three years.
   Hodges said myths — or misconceptions — about Bellingham and Whatcom County’s economy abound. Here are a few of the biggies.

Myth #1
   Bellingham and Whatcom County are experiencing out-of-control growth.

   The area’s population is growing, but not as rapidly as in the past, and not as much as other areas in the region, Hodges said.

In fact, more population growth occurred in Bellingham and Whatcom County during the early ‘90s than it has in the last few years, Hodges said.
   And, while Whatcom County’s population projection seems high to many residents, it is consistent with many other regional areas, and in some cases is even less, he said.
   For example, places such as the Tri-Cities and Clark County and Vancouver areas are growing faster than Bellingham and Whatcom County. The population of the Tri-Cities area grew 11 percent and Clark County/Vancouver grew 13 percent in the last five years, compared to Bellingham/Whatcom County, which grew 8 percent over that same span, Hodges said. Skagit County is not far behind with a 7.69 percent growth rate. Additionally 38 counties in the state had positive growth with only one county — Lincoln County — showing negative growth, Hodges said.
   So what is all the hoopla about?
   Residents see all the housing construction since 2001, which has increased by 12 percent — faster than the actual amount of added people in that time — and they assume the area is growing at an abnormally fast pace, Hodges said.
   The reality is that because Bellingham and Whatcom County experienced higher growth rates in the ‘90s, a pent-up demand for housing resulted in the construction boom of today.
   Another aspect of increased housing construction visibility is that the number of persons per home is decreasing — which results in more homes with fewer people living in them than in the past.
   “I would have expected we’d have seen a slowdown already (in the housing market), but we haven’t,” Hodges said. “But that is probably because mortgage rates and interests have not gone up dramatically.”
   Because of this myth, business owners and city officials risk becoming complacent in investing in economic development because of the assumption that all they have to do is build it and the customers will come. The community still needs to invest in work-force training, encourage new companies to come to the area and help existing businesses adjust to changes in the business world such as advancing technology.
   So far, Hodges said, he thinks city officials and business owners have avoided making those mistakes.

Myth #2
   Bellingham and Whatcom County are becoming a retirement community, mainly in the form of wealthy Californians driving up home prices.

   This one is tricky. Both the city and county are experiencing growth in 50-to-59-year olds, but these people are not necessarily retired and there is nothing unique to this area about an increase in that population.

“There are 50-to-59-year-olds everywhere,” Hodges said. “It’s called the baby boom.”
   A large boomer cohort is moving from the Midwest to both the East and West coasts, giving Whatcom County and most other Washington state counties of similar size a surge in 50-to-59-year-olds, Hodges said.
   And yes, Californians are moving to Bellingham and Whatcom County, but no, they are not only targeting this area, he said. Five to seven other states in addition to Washington can boast of — or bemoan, whichever the case may be — a Californian influx, and in fact, more are moving to Nevada and Arizona than anywhere else, he said.
   One of the misconceptions is that this age group — people in their 50s — are retired, which Hodges said is becoming less true as more people work into their 60s. The true retirees — people in their 60s and older — are a group actually shrinking in number in Bellingham and Whatcom County compared to other counties in the region, with only a 21 percent increase from 1995 to 2005. Most importantly, Hodges said, that age group shrunk as a percentage of total population in Whatcom County and Bellingham, since the area had more growth in other age categories.
   Business owners should therefore consider the area’s true market when thinking about their inventory and marketing, Hodges said. They should remember the baby boomers are not necessarily retired, a fact that might affect the hours a business stays open, for example, and they are healthier than that age group has ever been, which might affect the type of products a business sells.
   And don’t forget about the 20-somethings, Hodges said. People in their 20s and people in their 50s make up the largest percentages of Bellingham’s market, with the 30-somethings becoming a dying breed.

Myth #3
   If you promote infill, residents will come to those areas without any incentives.

   The city needs to consider incentives and investments for residents to locate to urban villages.

   This debate has polarized in Bellingham between people who think we should only infill versus those who think we can’t and therefore need to grow outward into the urban growth area.
   “The economist in me asks, do we need certain incentives or investments for urban villages to take shape?” he said.
    Hodges said, like many Bellingham families, he and his wife and children would likely not move downtown as is, but with added public amenities they might consider it. Those incentives could include amenities such as improved transportation, grocery stores and affordable-housing units.
   “Planners say plan it and it will happen,” Hodges said. “I worry there is a lack of incentives and investments in the economic development of urban villages that give people incentives to sprawl.”
    Hodges mentioned the trend in most cities toward infill as a result of people revolting against hour and a half commutes from suburbs to city jobs illustrates this point. Those people have an incentive to live downtown when faced with a choice between urban villages and suburban developments.
   For that reason, the city needs to consider incentives so that residents ultimately choose to live in urban villages within the city’s limits because they want to, not because it’s their only choice.

Myth #4
   Bellingham’s cost of living has risen so much, it’s the same as Seattle and King County now.

   Bellingham’s cost of living is far lower than that of Seattle and King County.
   While Bellingham’s cost of living is higher than the national average by about three percent, Seattle and Bellevue are far higher. Those cities’ cost of living is 15 percent higher than the national average, Hodges said.
   As for housing, Bellingham’s home prices are 12 percent higher than the national average; Seattle’s and Bellevue’s are 34 percent higher.
   And while Bellingham’s housing prices have increased at a faster rate in the last several years than before, over time Bellingham’s housing prices have remained fairly consistent, whereas other cities fluctuated significantly.
   The trend in the last few years is not unique to Bellingham. Consider Medford and Ashland, Ore., where housing prices have gone up 142 percent in the last 10 years; Bend’s increase of 115 percent; or Seattle/Bellevue/Everett’s 108 percent. Bellingham’s 91 percent is below all these locations.
   Hodges said he doesn’t want to underemphasize the fact that Bellingham’s housing market is becoming more expensive, and the city does need to consider affordability options — but stresses again the commonality of this issue in many other regional areas.
   Ultimately, Hodges said, he wants Bellingham and Whatcom County residents to be more skeptical when analyzing numbers that affect residents’ attitudes and potential policy regarding growth.
   “Don’t use bad data to justify a point,” Hodges said as he leaned into his computer screen — back to his quest of dispelling growth myths in the community, also known as answering e-mails. “We can at least get the economics right.



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