It’s no secret that Bellingham offers prime real estate opportunities for those looking to live, work and play in the city of subdued excitement. The housing market is so popular that approved housing construction in Bellingham is starting to outpace job growth.
Folks are moving here because the quality of life is quite good, said planning and community development director, Rick Sepler. It’s 90-minutes from a major market, there is access to amenities, economic vitality and people are choosing to move here for the rest of their lives, Sepler added.
New data from Apartmentlist.com examined key indicators of supply and demand in Bellingham’s housing market; the supply of new housing and the demand for new employment. The study examined data from the U.S Census Bureau for the number of new housing units being permitted and employment data from the Bureau of Labor Statistics.
The data revealed that from 2008-19 Bellingham added an annual average of 3.9 jobs per 1,000 residents and 4.3 housing permits per 1,000 residents. Bellingham’s jobs to permit ratio equates to 0.9 for the past 10 years, said housing columnist for Apartment List, Christopher Salviati.
Salviati has been conducting market research in Bellingham for approximately the last three years. A healthy range is thought of as 1-2 new jobs per housing unit. Less than one and housing units are oversupplied. More than two and housing is undersupplied, Salviati said.
Bellingham’s ratio of 0.9 indicates a slight overabundance of new housing. While there is no cause for concern, Bellingham is just below the healthy range, Salviati said.
On average Bellingham needs roughly 600 new units every year to accommodate the 1,400 people moving here annually. Vacancy rates can help to stabilize prices, but will not lower housing costs, Sepler said.
During the Great Recession, housing construction fell far behind population growth and subsequently caused Bellingham housing to become less affordable. The number of new multi-family units being permitted has increased to pre-recession levels. However, permits for single-family housing has not.
In addition, the cost of land, labor and materials for developers has become more expensive, said community and economic development manager, Tara Sundin.
Compounded with a growing gap between average income and housing price; middle-income households and first-time buyers are being priced out of buying single-family houses.
“Bellingham strikes me as an area where it could be the case that as some of the Seattle areas get more expensive you may see more folks holding down jobs in the Seattle metro but either telecommuting, bearing the long commute, or a combination of both while living in Bellingham,” Salviati said.
Between 2000-17 the median home value in Bellingham increased by 67 percent while household income only increased by15 percent. It is the middle ground of the market where Bellingham is running into challenges, Sepler said.
“A very affordable town, traditionally, has changed because like everything on the west coast and in Washington, the value of dirt has gone through the roof,” Sepler said. “However, there is no shortage of solutions thanks to the voters in town.”
In 2018 there was a total of 785 new units permitted. The majority of the new construction (599) are rental units. Sepler anticipates that the cities rental vacancy rate will return to a healthy level once those rental units are available. However, the 186 single-family units permitted in 2018 won’t be enough to bring the homeowner vacancy rate to a healthy level.
Bellingham has deployed $5 million every year for affordable housing, with support from a voter-approved levy, to build 655 units over the next decade. The city has advanced the Infill Toolkit which encourages the development of small vacant lots into a variety of smaller housing options such as cottages or town homes.
Recently the city has adopted plans to create more affordable housing options. One strategy has been new regulations for accessory dwelling units. Bellingham also continues to develop urban villages such as Fairhaven and the waterfront to accommodate a mix of housing types and commercial businesses.
Every day we are thinking about affordability and economic vitality and how to combine those two together to make us the best Bellingham that we can be,” Sepler said.