(The Center Square) – A new report from the National Low Income Housing Coalition, or NLIHC, finds most workers in Washington are spending so much on rent, they are priced out of saving for an eventual down payment on a home of their own.
The report found Washington has the fifth highest rental costs compared to wages in the nation.
A renter needs to earn more than $40 an hour to afford a two-bedroom home or apartment for rent, but the average renter in Washington makes just under $29 an hour.
A person making minimum wage would have to work 99 hours a week to afford that rental property, according to the NLIHC report, and pay other bills like food and transportation.
The state’s average fair market rent for a two-bedroom apartment is $2,097, according to the U.S. Department of Housing and Urban Development.
It’s even more in King County: $2,645.
According to NLIHC, a growing number of renters are spending more than half of their income on housing, which often means forgoing some necessities like healthy food and medical care.
Low-income housing advocates pressed lawmakers during the legislative session to cap rental increases, but a bill to do that didn’t make it past the committee stage.
Every Republican and several Democrats rejected the bill, arguing it could have unintended consequences on the housing market, discourage construction of much needed new housing and push landlords out of business, further straining the market.
According to the Building Industry Association of Washington, the high cost of rent in the state is making it extremely difficult for people to save enough for a down payment on a home.
BIAW President Jay Roberts told The Center Square the problems boils down to “the overregulation of everything.”
Roberts pointed to the Washington State Energy Code as an example.
“We’re getting ready to take on the 2021 International Energy Code,” said Roberts. “That includes codes for building a house from front to back. Any state can meet or exceed those codes and the state of Washington exceeds those codes significantly.”
Roberts says impact fees are another burden.
“In some parts of the state before you can get a permit to build you pay up to $75,000 in impact fees,” he explained.
Construction costs and expensive regulations increase rental housing as well, Roberts noted, pricing many people out of the market completely, whether they want to rent or buy.
“If we didn’t have these astronomically expensive energy code requirements, we could build less expensive homes,” Roberts concluded.
A 2022 BIAW report found the median home sales price for both new and existing homes is $643,400. A household must make a combined income of $171,890 and provide a minimum down payment of $19,302. Based on the average savings rate in the state, it would take approximately two years just to save for a down payment on a home.
The actual savings rate if likely much lower, according to BIAW, due to inflationary pressures on food, gas and other bills that cost more than in the past.
A separate BIAW report on housing affordability finds that to afford the state median-priced home of $640,000, a household would need to earn $182,700, have no debt and have a credit score of 700-719 to be able to make the $22,400 down payment. Given that, BIAW estimates only 18.2% of Washington families would be able to afford a median-priced home.
