How NOAH concepts can help the Whatcom County rental market
May 25, 2022
We hear a lot about the need for affordable housing in Whatcom County. But what, exactly, makes housing affordable?
Elements such as vacancy rates, property size, location and building condition play large roles in the cost of rental housing in any community.
Typically, efforts to provide affordable housing pay attention to a variety of methods, including reforming laws to allow for accessory dwelling units, tiny homes and manufactured homes, among others. Some cities and counties also offer subsidized housing, which involves government assistance to lower out-of-pocket costs for renters. The Bellingham & Whatcom County Housing Authorities, for example, offer a number of local subsidized housing options. And Kulshan Community Land Trust, with its mission to “grow a community everyone can afford,” works to foster a “healthy mix of housing types, sizes and prices” that are affordable to people working in the jobs nearby.
There’s a different approach to affordable housing, however, that acknowledges the natural reasons that a home might be more affordable.
Imagine that you live in a 30-year-old apartment with drafty windows, outdated appliances, dingy carpet and an overall rundown appearance. One day, you get a letter from your landlord stating that improvements are on the way — kitchen upgrades, new flooring, updated windows, etc. What can you expect to happen with your rent?
After investing all that money into fixing up your apartment, it’s highly likely that your landlord will raise the rent, potentially moving it from affordable to unaffordable housing.
The concept of NOAH (Naturally Occurring Affordable Housing) is used to describe housing that’s a little older, hasn’t recently been updated, and isn’t federally subsidized — in other words, housing that is “naturally” affordable.
The CoStar Group, which provides nationwide real estate data, refers to these properties as one- and two-star properties with such features as “small, seemingly inadequate windows,” “minimal or no landscaping” and “average, functional” aesthetics. Not top-of-the-line properties, but livable — and affordable. According to CoStar, these are properties that remain affordable to average households, costing less than 17 percent of area median income.
A local need
In 2019, before the pandemic, nearly half of renters in the United States were burdened by rent, spending at least 30 percent of their incomes on housing, according to The State of the Nation’s Housing 2021 report from the Joint Center for Housing Studies of Harvard University. Moreover, about a quarter of all renters paid more than half of their incomes, leaving them severely burdened.
The pandemic has exacerbated those issues, with more than half of all renters losing income between March 2020 and March 2021. And while rent increases slowed early in the pandemic, they were still increasing, leaving average families farther and farther behind.
Here in Bellingham and Whatcom County, there are a number of reasons for high housing costs — including demand that outstrips supply and housing prices that are growing much faster than average incomes — and the city has been working on plans to help ensure that everyone who lives here has access to housing they can afford.
Maintaining NOAH housing
The NOAH concept can be one additional tool in the belt of jurisdictions striving to keep housing costs low for all.
However, in a market like Bellingham’s, with real estate prices soaring, it can be tempting for investors to snap up NOAH housing to renovate it and turn a profit, quickly pricing most low-income families out of those homes.
Maintaining a city and county that is affordable for those who want to live here means working hard to maintain our inventory of NOAH housing (while also ensuring that rentals are kept to health and safety standards).
In some places, special funds are set up to help work with landlords to preserve affordable housing. In the Twin Cities, for example, the NOAH Impact Fund “partners with socially motivated investors and rental property owner-operators to preserve the long-term affordability of units in opportunity areas.” In other regions, efforts such as the Fund to Preserve Affordable Communities provide capital to developers hoping to acquire properties “at risk of turning into market-rate housing.”
Such a system could provide much-needed support here in Whatcom County as well. Other ideas for abundant housing include including setting density minimums, designating a percentage of all new units as affordable, and establishing nonprofit associations to help low-income tenants achieve homeownership.
Here’s what else the chamber is working on:
- Advocating for increased workforce housing near employment areas.
- Collaborating with Sustainable Connections Whatcom Housing Alliance on affordability and availability options and convening workforce housing stakeholders and advocates.
- Providing adequate support for the homeless.
- Decreasing policies that increase costs to housing and households.
For more info on NOAH properties or how you can help ensure abundant housing in Whatcom County, please reach out to the chamber. We’re here to help.
-Guy Occhiogrosso, President/CEO
Bellingham Regional Chamber of Commerce
Photo by Nathan Dumlao on Unsplash