Leavenworth Housing Needs Assessment

Leavenworth’s Housing Needs Assessment reveals big challenges for Chelan County

By Bill Forhan

According to a needs assessment, population in Leavenworth has been relatively flat over the last twenty years while jobs in the community have grown by 30 percent. 

Job growth generally results in growth in housing units, but in Leavenworth’s case this has not occurred. The additional jobs added should have required an addition of 312 new housing units, but in the 17 years of the study only 161 new housing units were built. The result was a shortage of available housing of 151 homes.

This shortage of housing is causing home prices and rental rates to grow, further stressing the ability of local people to be able to afford to live there. The result is more and more local people are having to commute in to work there.

Mayor Carl Florea campaigned on the issue of creating more affordable housing. The study shows that in the last 10 years home values have risen by 73 percent, while local median income has risen by only 17 percent. This report confirms Florea’s impression that while incomes have been rising, wages have not kept pace with the increases in local home prices. This is making it increasingly difficult for local people to afford housing in Leavenworth.

The median household income for Leavenworth was $51,875 in 2018, the most recent year that information is available. Leavenworth’s median household income has grown slower than most of other Chelan County communities.

HUD says housing costs should not exceed 30 percent of household income. This means a household making the median income would qualify for a home in the $320,000 range at todays record low mortgage rate of 2.75 percent. The median home price in Leavenworth in 2020 is $565,233 that is 38 percent higher than the average in Chelan County according to the study.

According to the study the household income necessary to buy the median price of “bottom tier” homes is 111 percent of the county median income thus preventing access to home ownership for many local households.

Rental prices are also the highest in Chelan County. Average rental costs were $1,631 per month in 2019. This is 6 to 8 percent higher than other communities in Chelan County.

The city has been taking steps to address the need for additional housing by examining building codes and lot set-backs. Building permits are up substantially. Last year the total building permits issued were 26, up 30 percent from the previous year. This year permits are on pace to exceed last year by 60 percent.

The community has been experiencing a boom in home construction over the last year. Behind Safeway 200 new apartment homes are being constructed and are expected to be available in 2021. Leavenworth Haus, as the new development is named, has been advertising some units will be available as early as March of 2021. Along Pine Street a current development is being completed that may ultimately begin to put some downward pressure on prices.

Another interesting fact comes out of the study. Leavenworth households tend to be older, often empty nesters, with fewer children than Washington state. This means fewer children attending local schools.

Mayor Florea is concerned about Leavenworth’s growing need to import its workforce from other local communities. The report confirms his concerns as it concludes 30 percent of the housing in Leavenworth is “vacant.” That does not mean the homes are available for sale. Many of the vacant homes are second homes and homes that are held specifically as short-term vacation rentals.

To address his concern Florea is pushing for a measure introduced in the state legislature in January to create a new tax on lodging. Senate Bill 6446 would create a new lodging tax in any community where the vacant home rate exceeds 30 percent, to levy a tax not to exceed 5 percent on lodging. The monies raised could be used to support affordable housing programs with at least 50 percent of the money targeted to households earning less than 8 percent of the area median income.

Florea believes this could bring in about $2,000,000 per year to address housing subsidies for local residents. With the vacant home rate currently at 30 percent it is unknown if this will actually work as intended or how it will actually be used by the city to support workforce housing.

How such a program might impact current home owners property values is not considered by the study.

The Housing Action Plan is scheduled to be considered at the Planning Commission meeting on Nov. 4.