Island County’s affordable housing crisis is worsened by a “squeezing effect” happening throughout the state, according to a recent study.
The North Puget Sound Association of Realtors commissioned a study on the housing conditions in the county. It was compiled by the firm Michael Luis and Associates.
Luis recently presented his findings Wednesday during an Island County Council of Governments meeting.The main housing drivers he identified in the county are the civilian economy, the Navy, commuters, retirees, and vacation and recreation.
“This combination exists in some areas, but not with the degree of balance among them that we see in Island County,” Luis said in an email. “No one part of the mix dominates, and they overlap in really interesting ways. Kitsap, a larger county, has a similar mix, but its size and proximity to the Seattle area mitigates some of the issues that come up in Island County.”
It’s a common phenomenon for people in the state to live in a more affordable area while working where there are more employment options, especially ones that have higher wages, he said. However, Island County has limited jobs with high earnings outside of the military and high costs of living.”
But because of its geographic location, it’s “at the end of the line.”
“There are no more affordable areas adjacent to it that people can commute from,” he said. “In other areas of the state, people can generally find a lower cost, more rural area next door. But next door to Island County is the water.”
The average annual wage in the county, not including military personnel, was $37,297, he said.
A separate report from Northwest Multiple Listing Service showed the median sales price of a home in Island County to be $369,000 through September 2018. This is a nearly 10 percent increase from the same time period the previous year.
The highest prices came out of South Whidbey, with an average of $543,125 in September 2018. Central Whidbey and Oak Harbor prices were $392,176 and $361,694 respectively.
In his study, Luis found many working residents had to commute outside the county for higher paying jobs. Data showed around 34 percent of “covered wages,” meaning not military or self-employed, came from employment within the county.
Luis noted this data could be skewed somewhat because it’s based off headquarters of offices and that doesn’t always accurately reflect where the employee works. However, he found around 16 percent of residents commuted over 60 minutes to work. This number seemed to be confirmed in focus groups he conducted, Luis said.
“They’re going off island to earn a lot more money, basically,” he said.
This brings higher incomes into the housing market on the island, which can increase prices, he said.
Luis also found a significant portion of the income in the county came from sources other than wages. About 40 percent of income within the county comes from employment. Statewide, about 60 percent of income comes from working.
In Island County, around 50 percent of income is from investments, Social Security, Medicare and veterans benefits, he said.
“In a housing-constrained environment, those with off-island income sources — commuter, military, retirement, investment — squeeze out those with on-island incomes,” Luis wrote in his report.
Local workers are often the ones who get “squeezed,” he said. In focus groups, some employers bemoaned their inability to hire employees because many couldn’t afford to live in the area.
Although he identified vacation rentals as having an impact on the housing situation in the county, he said there wasn’t enough data to draw conclusions and so it wasn’t mentioned in his report.
Constraints within the state Growth Management Act, adopted in 1990, can make it difficult for local governments to address some of these issues, he said. Local leaders agreed.
Island County Commissioner Helen Price Johnson said there’s more legislative work to be done regarding RAIDS, or rural areas of intensive development, to facilitate growth around areas that have already been developed.
“(The GMA) wasn’t intended to be a static law,” Johnson said at the meeting.“It’s been a political hot potato, so the legislators haven’t wanted to touch it … It was supposed to be amended and changed over time and the rural areas just have been left out of the conversation.”