Report to the Legislature — Affordable Housing Advisory Board, 2023 Affordable Housing Update (March 2023)
Summary
This Affordable Housing Advisory Board report to the Legislature, dated March 2023, is the 2023 update under RCW 43.185B.040. The board is described as a 24-member board with 21 members appointed by the governor. The report states that Washington's population increased by 97,400 to an estimated 7,864,400 people as of April 1, 2022. It states that more than 143,000 BIPOC households in Washington would need to become homeowners to close the homeownership gap, and that Washington will need 991,529 additional units by 2044. The board recommends state action in four categories, including funding for affordable housing and homelessness, housing justice, and increased housing supply.
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Pursuant to RCW 43.185B.040
March 2023
AFFORDABLE HOUSING
ADVISORY BOARD Report to the Legislature
Director Mike Fong
V3.1
Acknowledgments
Washington State Department of Commerce
Corina Grigoras, assistant director
Housing Division
Tedd Kelleher, Policy Director
Housing Division
Taylor Webb, policy coordinator
Housing Division
Washington State Department of Commerce
Taylor Webb
taylor.webb@commerce.wa.gov
AFFORDABLE HOUSING ADVISORY BOARD
1011 Plum St. SE
P.O. Box 42525
Olympia, WA 98504-2525
www.commerce.wa.gov
For people with disabilities, this report is available
on request in other formats. To submit a request,
please call 360.725.4000 (TTY 360.586.0772)
2023 AFFORDABLE HOUSING UPDATE
Table of Contents
Executive Summary ..................................................................................................................................... 2
2023 The current state of affordability ......................................................................................................... 3
2022 progress ............................................................................................................................................. 5
Conclusion ................................................................................................................................................ 10
Appendix A: Members of the Affordable Housing Advisory Board ............................................................... 11
2023 AFFORDABLE HOUSING UPDATE 1
Executive Summary
Overview
The Affordable Housing Advisory Board (AHAB) is a 24-member board with 21 members appointed by the
governor. Its role is to “address the state’s need for housing that is affordable to all economic segments and
populations",1 and it serves as the Department of Commerce’s (Commerce) principal advisory body on housing
and housing-related issues. RCW 43.185B.040 requires Commerce to "submit an annual progress report to the
legislature, detailing the extent to which the state's affordable housing needs were met during the preceding
year and recommendations for meeting those needs." This report constitutes the 2023 update.
Key findings
Despite an increase in single-family and multi-family housing starts across the state, it is not enough to meet
the housing need in Washington. Home prices continue to increase across the state making homeownership
less attainable. Renters are also becoming increasingly cost-burdened2 or extremely cost-burdened.3 While
access to affordable homes is scarce for all but the wealthiest Washington residents, there is stark disparity
between homeownership rates among white and Black, Indigenous, and People of Color (BIPOC). To close the
gap, more than 143,000 BIPOC households in Washington would need to become homeowners.4 In addition,
new housing needs projections show that Washington will need 991,529 additional units by 2044 with a
majority of those units being for extremely low-income households making 0-30% area median income.
Summary of recommendations
Washington residents, especially BIPOC and low-income households, are struggling to find safe and affordable
homes. Although thousands of housing units were developed in 2022, the statewide housing need continues to
outpace housing starts. Washington needs more housing of all types, more subsidized affordable housing for
low-income households, and policies that directly address racial disparities in homelessness, housing
affordability and homeownership.
To address these issues, AHAB recommends state action in four broad categories:
1. Assistance for tenants and homeowners financially impacted by COVID-19
2. Funding for affordable housing and homelessness
Note to Reader:
3. Housing justice Review the footnotes on each page for
key insights, definitions, and links to
4. Increase housing supply
reports.
1 Washington State Legislature, "Housing Policy Act, RCW 43.185B.020," https://app.leg.wa.gov/rcw/default.aspx?cite=43.185b
2 HUD defines cost-burdened families as those “who pay more than 30 percent of their income for housing” and “may have difficulty
affording necessities such as food, clothing, transportation, and medical care.”
3 Severe cost-burdened is defined as paying more than 50 percent of one’s income on rent.
4 Washington State Department of Commerce, “Improving Homeownership Rates for Black, Indigenous, and People of Color in
Washington,” https://deptofcommerce.app.box.com/file/1025372532175?s=zqs8xhdhskn4mvma9tp3a42xmc19slch
2023 AFFORDABLE HOUSING UPDATE 2
The current state of affordability
Overview
In the past year, Washington’s population increased by 97,400 to an estimated 7,864,400 people as of April 1,
2022. The growth rate for 2022 measured 1.3% compared to 0.8% in 2021.5 King County is the primary
contributor of the population growth adding just over 30,000 people this year. Net migration accounted for 86%
of the state’s population growth, and housing growth remained a strong indicator of population growth with
46,500 housing units added in the past year, 58% of which were multifamily.
Despite thousands of additional housing units built, it is not enough to meet the housing need in Washington.
There is a shortage of affordable6 and available homes across the state for all income ranges, especially
extremely low-income households.7 The statewide apartment vacancy rate is still very low at 3.8% as of spring
2022. This is well below the national average of 5.8%.8 Low vacancy rates are an indicator that there are not
enough rentals on the market to keep up with demand meaning landlords are more likely to increase rents.
Figure 1: Affordable and available homes per 100 renter households9
120
99
100 91
Number of Homes
80
60 51
40 31
20
0
0%-100% 0%-80% 0%-50% 0%-30%
AMI Range
According to the National Low Income Housing Coalition, the annual income needed to afford a modest two-
bedroom rental in Washington is approximately $65,161, or the equivalent of working 86 hours per week at
minimum wage. While the area median income (AMI) in Washington is $108,911, more than 37% of renter
households in the state make less than 50% of the AMI; in other words, $54,456 or less annually. More than a
third of the population in Washington cannot afford a modest two-bedroom rental meaning they are more likely
to sacrifice other necessities like healthy food and healthcare to pay the rent, and are more likely to experience
5 Washington State Office of Financial Management, “Washington tops 7.8 million residents in 2022,”
https://ofm.wa.gov/about/news/2022/06/washington-tops-78-million-residents-2022
6 HUD defines housing that is affordable as housing in which the occupant is paying no more than 30 percent of gross income for
housing costs, including utilities.
7 Extremely low-incomes are at or below the poverty guideline or 30% of their area median income (AMI).
8 Washington Center for Real Estate Research, “Washington State Apartment Market Report – Spring 2022,”
https://wcrer.be.uw.edu/wp-content/uploads/sites/60/2022/02/2022SpringApartmentMarketReport.pdf
9 NLIHC tabulations of 2020 5-year ACS PUMS data.
2023 AFFORDABLE HOUSING UPDATE 3
unstable housing situations like evictions.10 We also know that renter households are disproportionately
people of color.11
The Department of Housing and Urban Development (HUD) housing choice voucher program is the federal
government’s major program for assisting very low-income families, the elderly, and the disabled to afford
decent, safe, and sanitary housing in the private market. In an attempt to keep up with the rent increases in the
private market, HUD has recently updated the methodology used to determine fair market rents (FMRs) by
supplementing public data with data from private sources.12 This is imperative to ensure more families can
receive the housing assistance they need.
In addition to rising rents, the Washington Center for Real Estate Research shows the statewide median sales
price for a single-family home has increased by 14.6% since 2020 reaching $654,500.13 Housing starts have
steadily increased since 2021 with a 7.2% increase in single-family permits, and a 33.2% increase in
multifamily permits statewide.14 However, housing production still is not keeping pace with housing need,
especially for first-time homeownership. Statewide first-time homebuyer index has decreased with a score of
45.5; this means that a household earning 70% of the median household income has only 45.5% of the income
required to purchase a typical starter home. A rise in investor-owned properties could be a major contributing
factor to a shortage of affordable homes. Last year, investors bought 22% of all single-family homes sold in
Washington State – a 102% increase from 2020 – further driving up both rents and home prices.15 When
investors purchase in great quantities, starter homes are inaccessible for first-time homebuyers, especially
Black families and other families of color.
10 National Low Income Housing Coalition, " Racial Disparities Among Extremely Low-Income Renters,"
https://nlihc.org/resource/racial-disparities-among-extremely-low-income-renters
11 National Low Income Housing Coalition, " Racial Disparities Among Extremely Low-Income Renters,"
https://nlihc.org/resource/racial-disparities-among-extremely-low-income-renters
12 The Department of Housing and Urban Development, “HUD Publishes FY 2023 Fair Market Rents,”
https://www.hud.gov/press/press_releases_media_advisories/HUD_No_22_161
13 Washington Center for Real Estate Research, “Washington Market Highlights: Second Quarter 2022,” https://wcrer.be.uw.edu/wp-
content/uploads/sites/60/2022/09/wshmsq222.pdf
14 Washington Center for Real Estate Research, “Washington Market Highlights: Second Quarter 2022,” https://wcrer.be.uw.edu/wp-
content/uploads/sites/60/2022/09/wshmsq222.pdf
15 The PEW Charitable Trusts, “Investors Bought a Quarter of Homes Sold Last Year, Driving up Rents,”
https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2022/07/22/investors-bought-a-quarter-of-homes-sold-last-year-
driving-up-rents
2023 AFFORDABLE HOUSING UPDATE 4
2022 progress
Commerce restructures to accommodate growth
This year, Commerce received a historic level of funding – an additional $2 billion to the 2021-2023 biennial
budget, bringing total funding from $5.2 billion to $7.2 billion. The increase in funding allowed the agency to
expand and divide the Community Services & Housing Division (CSHD) into two separate divisions: the
Community Services Division (CSD) and the Housing Division (HD).
In addition, Commerce created a new unit within the Housing Division to focus solely on permanent supportive
housing. The Office of Apple Health and Homes as well as a Permanent Supportive Housing Advisory
Committee was created as a result of the 2022 legislative session16 and will be overseen by the Apple Health
and Homes/Permanent Supportive Housing (AHAH/PSH) unit in Commerce. The unit will provide technical
assistance and help create and maintain affordable housing for people living with behavioral health conditions,
other disabling conditions and with extremely-low incomes.
Overall, the agency is projecting approximately 200 new team members, continuing the significant growth the
division has already seen over the past two years. Commerce's growth and restructuring is a direct response to
the urgent public need for a more focused approach to supplying housing and eliminating homelessness.
Housing justice for BIPOC continues to be top priority
We understand homeownership as one of the primary ways for families to build wealth17 However, racist
government policies and business practices have disproportionately affected Black, Indigenous, and people of
color (BIPOC) from achieving homeownership.
In the 2021-2023 operating budget, the Legislature tasked the Commerce with convening a diverse
homeownership-focused work group to identify barriers and offer recommendations that would reduce the
disparity in homeownership for BIPOC communities (ESSB 5092, Sec 129 (100), Laws of 2021). The
Homeownership Disparities Work Group created a report,18 which highlights the stark disparities between
white and BIPOC homeownership rates in Washington. In order for the BIPOC homeownership rate to equal
that of non-Hispanic whites, more than 143,000 BIPOC households in Washington would need to become
homeowners.
16 Office of Apple Health and Home was created in response to ESHB 1866 and the permanent supportive advisory committee was
created in response to SHB 1724.
17 Urban Institute, “Reducing the Racial Homeownership Gap,” https://www.urban.org/policy-centers/housing-finance-policy-
center/projects/reducing-racial-homeownership-gap
18 Washington State Department of Commerce, “Improving Homeownership Rates for Black, Indigenous, and People of Color in
Washington,” https://deptofcommerce.app.box.com/file/1025372532175?s=zqs8xhdhskn4mvma9tp3a42xmc19slch
2023 AFFORDABLE HOUSING UPDATE 5
Figure 2: Homeownership rate by race/ethnicity, 201919
Asian or Native Hawaiian and Other Pacific Islander 60%
American Indian and Alaskan Native 52%
Hispanic or Latino 45%
Black or African American 31%
0% 10% 20% 30% 40% 50% 60% 70%
Black or African American
Hispanic or Latino
American Indian and Alaskan Native
Asian or Native Hawaiian and Other Pacific Islander
The Homeownership Disparities Work Group prioritized 27 recommendations to help overcome what they see
as the two biggest barriers to BIPOC homeownership: affordable homeownership supply and direct
homeownership assistance.20 The recommendations provide guidance to the Legislature and state agencies
regarding how to overcome these two barriers, while improving inadequate lending products for BIPOC
borrowers, increasing access to existing assistance programs, and eliminating systemic factors that
disproportionately affect BIPOC households’ ability to sustain homeownership.
Support for low-income housing
Housing Trust Fund
Commerce provides tools, capital and operating funds to local governments, nonprofits, tribes, housing
authorities and community action agencies21 to provide housing to low-income members of their communities.
Commerce administers the Housing Trust Fund (HTF), an essential state investment with a purpose of
ensuring that everyone can live in a safe, decent, affordable home. Since 1986, the state has invested more
than $1.7 billion to provide 60,000 affordable homes to households with incomes up to 80% AMI. These
investments include $161 million in federal funding sources (National Housing Trust Fund and HOME
Investment Partnerships). In 2021, the HTF awarded capital funds to organizations to construct an estimated
3,800 low-income housing units throughout the state, more than 1,900 of which will be dedicated to homeless
housing. The increased allocation in 2022 for Rapid Capital and HTF may generate another 4,000 shelter beds
or affordable homes.
19 U.S. Census Bureau ACS 1-year, 2019: races are of any ethnicity; races are based on the head of the household.
20 Washington State Department of Commerce, “Improving Homeownership Rates for Black, Indigenous, and People of Color in
Washington,” https://deptofcommerce.app.box.com/file/1025372532175?s=zqs8xhdhskn4mvma9tp3a42xmc19slch
21 List-of-CAPs-in-WA.pdf (wapartnership.org)
2023 AFFORDABLE HOUSING UPDATE 6
Figure 3: Appropriations for affordable housing by biennium, 2001-03 through 2021-
23
$800,000,000
$744,630,000
$700,000,000
$600,000,000
$500,000,000
$400,000,000
$300,000,000 $241,568,000
$200,000,000 $164,750,000
$103,800,000 $106,582,000
$84,000,000
$100,000,000 $69,000,000
$95,490,000 $111,789,000
$71,000,000 $70,000,000
$-
2001-03 2003-05 2005-07 2007-09 2009-11 2011-13 2013-15 2015-17 2017-19 2019-21 2021-23
CHIP grants
The Connecting Housing to Infrastructure Program (CHIP), with $43.6 million in federal and state monies,
funds sewer, water or storm water improvements and/or waived system development charges for new
affordable housing projects.22 After three rounds of CHIP grants, Commerce has funded 54 projects with $41
million across 17 counties over the last year, supporting the development of 4,700 units of affordable
housing.23 By covering the costs of connecting new projects to utilities, CHIP expedites the development of
new, affordable home ownership and rental housing units that communities across the state desperately need.
Operations and Maintenance Program
To assist in the continued success of the developed affordable housing units, Commerce created the
Operation and Maintenance Program, which provides operating assistance to multifamily rental housing
projects serving extremely low-income households that are already within the HTF portfolio. The funding
comes from the Affordable Housing for All Surcharge created by law in 2002 (SHB 2060) and named in 2007
(HB 1359), and is a fee charged by the County when recording a legal document.24
22 Washington State Department of Commerce, “Planning for Housing: Housing-Related Grants,”
https://www.commerce.wa.gov/serving-communities/growth-management/growth-management-topics/planning-for-housing/
23 Washington State Department of Commerce, “ State infrastructure grants support over 1,000 new units of affordable housing across
Washington,” https://www.commerce.wa.gov/uncategorized/state-infrastructure-grants-support-over-1000-new-units-of-affordable-
housing-across-washington/
24 Washington State Department of Commerce, "Operations and Maintenance Program," https://www.commerce.wa.gov/building-
infrastructure/housing/housing-trust-fund/operations-and-maintenance-fund/
2023 AFFORDABLE HOUSING UPDATE 7
Apple Health & Homes/ Permanent Supportive Housing unit
The newly created Apple Health and Homes/ Permanent Supportive Housing (AHAH/PSH) unit in Commerce
has been a pivotal step toward addressing the needs of individuals living with behavioral health conditions,
other disabling conditions, and with extremely low incomes. The unit brings the three legs of the PSH "housing
stool" together: bricks and mortar, housing vouchers and subsidies, and supportive housing services. The
AHAH/PSH unit issued a request for proposals for a pilot program to manage rent assistance subsidies and
vouchers totaling $6 million for individuals with complex health needs enrolled in the Health Care Authority
Foundational Community Supports program. These funds will provide rent assistance at a location identified
through their housing assessment. In addition, the AHAH/PSH team will generate technical assistance and
capacity grants to assist entities, developers, housing providers, and service organizations in connecting
services and capital and maximizing their access to housing assistance. The AHAH/PSH unit will work closely
with Commerce’s Multifamily Housing Unit to issue $60 million in capital funds.
COVID-19 assistance
Commerce has played a central role in delivering urgently needed aid to support struggling households who
are continuing to recover from the COVID-19 pandemic. To date, Commerce has awarded $1.1 billion for rent
assistance administered to approximately 80,000 households, $3 million for foreclosure assistance funds, and
$3 million to support Dispute Resolution Centers and eviction resolution programs.25 While these investments
are significant, they are not enough to meet the growing need for affordable housing statewide. Especially now
that the COVID-19 pandemic has highlighted housing instability across the state as well as racial disparities in
cost burden, it is time to substantially increase Washington’s commitment to affordable housing.
Planning for housing
HB 1220
In 2021, the Washington Legislature changed the way communities are required to plan for housing. House Bill
1220 (HB 1220) amended the Growth Management Act (GMA) to instruct local governments to “plan and
accommodate” for housing affordable to all income levels.26 This significantly strengthens the previous goal,
which was to encourage affordable housing.
Commerce will provide guidance to communities to meet the new housing goal and updated requirements for
housing elements in RCW 36.70A.070(2). This includes:
County-level projected housing needs for all economic segments of the population including projected
special housing needs;
Guidance on provisions for moderate density housing options within an urban growth area;
Guidance on reviewing for sufficient land capacity for existing and projected needs for all economic
segments of the community; and
Guidance on examining racially disparate impacts, displacement and exclusion in housing policies and
regulations, and recommended policies to address them.
25 Washington State Department of Commerce, “Summary of Commerce’s COVID-19 Response Efforts,”
https://www.commerce.wa.gov/about-us/agency-response-to-covid-19/
26 Washington State Department of Commerce, “Updating GMA Housing Elements,” https://www.commerce.wa.gov/serving-
communities/growth-management/growth-management-topics/planning-for-housing/updating-gma-housing-elements/
2023 AFFORDABLE HOUSING UPDATE 8
In accordance with this work, Commerce released a Racially Disparate Impacts Guidance document to assist
local governments as they integrate new requirements related to racially disparate impacts, displacement,
exclusion and displacement risk in housing into their housing element updates. Commerce has also released
methodology for projecting future housing needs as well as draft housing need numbers for every county in
Washington through the Housing for All Planning Tool (HAPT)27. Preliminary estimates based on a medium
population growth projection in the state show Washington would need 991,529 additional units to meet the
housing need with a majority of those units (34%) being for extremely low-income households making 0-30%
AMI.
Figure 4: Projected housing need in 2044 based on medium population projection
400000
350000
300000
Housing Units
250000
200000
150000
100000
50000
0
0-30% 30-50% 50-80% 80-100% 100-120% 120%+
AMI Range
Middle Housing Grant Program
The Middle Housing Grant Program provides funding to cities or regional groups to take actions that will
evaluate the authorization of middle housing types on at least 30% of lots zoned for single family at the
beginning of the grant. The grants are available to cities within King, Kitsap, Pierce and Snohomish counties
and, to date, 25 grants have been awarded.28
Washington State needs a broader diversity of housing types to provide affordable options for renters and
homeowners alike. Smaller, missing middle housing types such as attached and detached accessory dwelling
units (ADUs and DADUs), duplexes, triplexes, fourplexes, townhomes and cottages can offer more affordable
options without changing the character of existing residential neighborhoods. According to the Association of
Washington Cities, more than 50% of cities across the state allow mixed single- and multifamily housing in at
least 75% of their traditional single-family land base; however, a lack of financing options available to private
27 Final projected housing need numbers are expected in January 2023. Washington State Department of Commerce, "HB 1220 Draft
Housing Projections Methodology and Numbers – 30 Day comment period!" https://www.commerce.wa.gov/uncategorized/draft-
projections-hb-1220-30-day-comment/
28 Washington State Department of Commerce, “Middle Housing Grants Awarded,”
https://www.commerce.wa.gov/programs/gms/housing-planning/middle-housing-grants-awarded/
2023 AFFORDABLE HOUSING UPDATE 9
developers makes it difficult to build missing middle housing types, especially at a price that residents can
afford.29
Conclusion
Increasing access to affordable and abundant homes throughout the state will positively affect communities in
many ways. Housing can increase a community's economic strength by reducing intergenerational poverty and
increasing economic mobility.30 It may increase children’s opportunities for educational success by providing a
safe, stable, and nurturing environment that fosters learning.31 Affordable housing can also lead to positive
health outcomes,32 and can help communities protect their environment.33 It is imperative that Washington
continues to provide assistance for households affected by COVID-19, increases funding for affordable
housing development and homelessness prevention, makes long-needed investments to promote housing
justice and undo racist government policies and business practices that have disproportionately affected
Black communities, and remove barriers that make it difficult to build the housing we desperately need. The
Affordable Housing Advisory Board is eager to work with the Legislature on the aforementioned issues
throughout the coming years.
29 Association of Washington Cities, “City Response to the Housing Crisis,” https://wacities.org/docs/default-
source/legislative/factsheetcityresponsehousecrisis2022.pdf?sfvrsn=e0ee254f_8
30 National Low Income Housing Coalition, "The Problem," https://nlihc.org/explore-issues/why-we-care/problem
31 National Housing Conference, "The Impacts of Affordable Housing on Education: A Research Summary," https://nhc.org/wp-
content/uploads/2017/03/The-Impacts-of-Affordable-Housing-on-Education-1.pdf
32 National housing Conference, "The Impacts of Affordable Housing on Health: A Research Study," https://nhc.org/wp-
content/uploads/2017/03/The-Impacts-of-Affordable-Housing-on-Health-A-Research-Summary.pdf
33 Environmental Protection Agency, "Smart Growth and Affordable Housing," https://www.epa.gov/smartgrowth/smart-growth-and-
affordable-housing
2023 AFFORDABLE HOUSING UPDATE 10
Appendix A: Affordable Housing Advisory Board
Members
Name Title
Paul Trautman Chair
Susan Boyd Apartment Management
Norma Hernandez Association of Washington Cities (Eastern Washington)
Mary Hudson Association of Washington Cities (Western Washington)
Tanya Mercier Consumer of Low Income Housing
Gregory Dunfield For-Profit Housing Developer
Jenifer Van Gerpen For-Profit Rental Housing Owner
Michone Preston General Public
Michael Dotson Home Mortgage Lending
W Sharman Home Mortgage Lending
Meg Martin Homeless Shelter Operator
Lowel Krueger Housing Authorities
Cindy Proctor Nonprofit Housing Developer
Vijya Patel Real Estate Sales
Conor Hansen Residential Construction
Douglas Ito Residential Construction
Ami Manning Site-based Permanent Supportive Housing
Vacant Special Needs Populations
Vacant Unit Owner Association
LaDon Linde Washington Association of Counties (Eastern Washington)
Temple Lentz Washington Association of Counties (Western Washington)
Corina Grigoras Ex-Officio, Department of Commerce
Theresa Slusher Ex-Officio, Department of Social and Health Services
Steve Walker Ex-Officio, Washington State Housing Finance Commission
2023 AFFORDABLE HOUSING UPDATE 11
2023 AFFORDABLE HOUSING UPDATE 12
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