The Gristle

Missing Middle

Wednesday, December 18, 2019

MISSING MIDDLE: In the final meeting of their legislative year, Bellingham City Council received the summary of their Housing Equity Assessment, an effort to identify an expanded range of housing types and areas in the city where these housing types might be located to promote increased affordability and economic diversity in neighborhoods. The assessment effort was spearheaded by April Barker, as noted in a resolution this week honoring the departing Council member. Her colleague Terry Bornemann and Mayor Kelli Linville—each with long, long public service to Bellingham—were similarly honored by resolution.

“We’ve been doing this work to get our arms around some of the issues that face us as a community,” COB Planning and Community Development Director Rick Sepler summarized, “and to take a look at the characteristics of how our housing patterns have developed over time—the changing nature and demographics of our community both in terms of affordability and also in terms of where folks are building and how they’re building. The notion here is, can we find places and opportunities that take advantage of a number of things we value,” he explained.

The good news on housing is there is already a fairly balanced distribution of diverse housing types in neighborhoods throughout the city—although more is certainly needed. And Bellingham still has capacity to preserve existing affordable homes and enable additional opportunities for new affordable housing development. Those are policy matters elected leaders to influence.

The bad news is the majority of housing costs are outside of a city’s—any city’s—influence, and are related to materials and construction costs, land value, financing and interest rates, and federal tax policy. Perhaps the greatest challenge is one of income, as wages have not kept pace with other aspects of the economy.

Roughly 25 percent of the jobs in Bellingham and greater Whatcom County are in the service sector, and pay on average less than $30,000 per year—in many cases substantially below that sum. Half of the city’s population struggles to meet the housing affordability index, a measure of average incomes versus average home prices.

“Bottom line is we need more jobs that pay a family wage,” Sepler admitted to Council. “A risk that we’ve seen is a bifurcation—you end up with a community of folks who are fairly well-heeled, and an echo in the service sector that are not good paying jobs, generally. And no middle.”

This is the risk of gentrification; and of real estate market forces that cater almost exclusively to the other half of the town that needs no assistance to afford a home.

In an interesting eddy in a City Council session earlier this month, planners were asked to factor transportation costs into the affordability assessment. It’s generally understood that the costs of land and homes is lower in the rural county; but when you add in the travel maintenance costs of commuting from the boondocks into the towns where the jobs and services are, it turns out nowhere in the county is particularly affordable to lower incomes. This is a countywide problem, and a problem across the state.

“The transportation network definitely plays a role in how affordable a home is, when you’re looking at the costs of not only paying for housing but the related costs of getting to grocery stores and workplaces and schools,” Senior Planner Chris Behee explained.

From a social perspective, the takeaway from the Housing Equity Assessment is that perhaps as many as half the households in Whatcom County are struggling financially—and the trends pressuring those households are accelerating.

There’s precious little local governments can do to address national trends; but perhaps with a bolder vision they might do more.

The Bellingham affordable housing levy pushes back, gently, against those private sector market forces and their aloof focus on higher incomes. The City of Ferndale is considering placing a similar proposal in front of their voters next year. Properly constructed, a comprehensive countywide measure would do even more.

In their afternoon session, Council members also heard a presentation on public banking by Senator Bob Hasegawa, a representative of south Seattle’s 11th Legislative District. Hasegawa has introduced a number of state bank bills in the Legislature that could help leverage local tax revenues and use the interest on the revenues to leverage those funds for the benefit of residents.

“When local and state governments collect tax revenues, we have to have a bank account to run it through to pay our bills and track it,” Hasegawa explained. “Wall Street banks who hold the contract get to use our tax dollars and leverage it into cockamamie schemes to make profits for themselves. Meanwhile, if we want to build something like roads and schools, we have to go back to Wall Street and sell bonds, which is like borrowing back the use of our own money.”

In contrast to commercial banks, public banks are able to reduce taxes within their jurisdictions because their profits are returned to the general fund of the public entity. The costs of public projects are reduced, because public banks do not need to charge interest to themselves for public purposes. Eliminating interest has been shown to reduce the cost of those projects, on average, by 50 percent. Public banks can also help leverage financing instruments; and since their funds are not tied up in Wall Street investments, they are less subject to bubbles and crashes. In fact, the next time the housing bubble collapses, a public bank could capitalize on the market correction. Public banks can lend during times of stress and crisis, helping to sustain a healthy local economy.

It could be a powerful tool that could factor into the housing equity equation, as local governments proactively address the issues of affordability.

Past Columns
Napoleons In Exile

May 27, 2020

Alcoa Unmade

April 29, 2020


March 25, 2020

Protecting the Vulnerable

March 18, 2020

An Evolving Crisis

March 18, 2020

Pandemic Pandemonium

March 11, 2020

A New Hope

March 4, 2020

Managing Expectations

February 26, 2020

A Mad Triad

February 19, 2020

Another Jail Fail?

February 12, 2020

Wacko Whatcom

February 5, 2020

Shelter From the Storm

January 29, 2020


January 22, 2020

‘I Have A Dream’

January 15, 2020

Olympia Olympics

January 8, 2020

What Dreams May Come

January 1, 2020


December 25, 2019