skip navigation

Background About Affordable Housing

This page looks at issues local governments in Washington State should consider when developing an affordable housing plan. 

It is part of MRSC's series on Affordable Housing.


Washington State has a severe deficit of affordable housing units. Rising construction costs, income inequality, and restrictive zoning codes, among other factors, have increased the price of housing and limited the building of new units. Each local government experiences distinct challenges to their affordable housing development plans, and it is critical to identify what specific economic or planning policies must be adopted, changed, or removed to move forward with new housing development.

To solve these persistent issues, collaboration among cities, counties, housing authorities, and other stakeholders is critical to plan for long-term and widespread affordable housing solutions. Local governments have a unique role and are central players in ensuring the future of housing is abundant, affordable, and equitable.

How is Affordable Housing Defined?

The United States Department of Housing and Urban Development (HUD) defines affordable housing as housing with monthly costs, including utilities other than telephone, that do not exceed 30% of a household's monthly income. Households that spend more than 30% of their income on housing costs are cost burdened, while those that spend more than 50% of their income are severely cost burdened. In 2019, 46% of Washington renters were cost burdened, with nearly half of those considered severely cost burdened (UW Evictions Project, 2020). When renters are paying more than a third of their income to housing, it can make affording other necessities, like healthcare or food, incredibly challenging and can prevent households from becoming financially stable.

While housing affordability is an issue that can affect people of all income levels, MRSC’s affordable housing-related topic pages focus primarily on households making less than 80% of the Median Family Income (MFI).

Who is Low Income?

Median Family Income (MFI) is a metric used by HUD to measure income thresholds in a region. If an individual household earns 80% or less of the region's MFI, that household is considered to be "low income," while 50% MFI or less is considered "very low income" and 30% MFI or less is "extremely low income." HOME Income Limits has information on HUD-adjusted home income limits for a particular region. Comprehensively addressing affordable housing needs means assuring access to housing for each of these income areas. In 2018, 44% of low income, 79% of very low income, and 86% of extremely low-income renter households were cost burdened, illustrating the substantial lack of available and affordable housing.

Definition Median Family Income (MFI)
Low-income household less than 80% of the MFI
Very low-income household less than 50% of the MFI
Extremely low-income household less than 30% of the MFI

Data source: U.S. Department of Housing and Urban Development

NLIHC Gap Report offers data on the availability of affordable homes in Washington, and the NLIHC Out of Reach Report offers data on the gap between renters' wages and the cost of rental housing in the state.

Causes of Housing Affordability Problems

To properly inform policy solutions, communities should identify the specific causes of their housing affordability issues. While all of Washington faces housing challenges, the causes can vary by jurisdiction. Some common causes are identified below, including population growth, a lack of living-wage jobs, and displacement caused by gentrification.

  • Rapid population growth: When the population in an area increases, competition for a limited supply of affordable units can drive up housing prices. Even when developers are rapidly building, they often can't build fast enough to meet demand, or the type of housing built does not meet the needs of the community.
  • Rising construction costs: There is a high demand for construction labor and materials throughout Washington. This directly increases the costs to develop new housing.
  • New housing construction that does not address local needs: Many developers try to build housing that maximizes their profits given local zoning codes and regulations. Building luxury homes may be more cost effective for home builders in an area but it will not solve the affordable housing crisis.
  • Lack of living-wage jobs: When the average income of residents is far below what it costs to afford housing in the area, then an important part of the solution for affordable housing may require an economic development component.
  • Short-term rentals: Websites like Airbnb or HomeAway have made renting out unoccupied homes lucrative for homeowners, especially in places that have high recreational appeal. This is shrinking the amount of available housing and increasing the cost of long-term rentals in the community.
  • Gentrification and displacement: When high demand for homes in an area increases housing costs, low- or middle-income households are often forced or pressured to move to find more affordable housing, thus increasing demand and costs in areas that were once affordable. Gentrification is the result of displacement that changes the cultural and socioeconomic characteristics of a neighborhood. Increased investment in these neighborhoods can displace lower-income residents and prevent them from benefitting from the economic growth and greater access to services. This disproportionately hurts Black and Hispanic residents.

Equity and Housing

Racial inequities and systemic and institutional racism historically has been prevalent in housing. Many federal, state, and local policies have driven racial segregation, blocked wealth accumulation, and decreased access to opportunities for communities of color across the United States. Policies such as redlining, predatory lending, and exclusions in the G.I. Bill produced racial disparities that permeate housing policy to this day.

 Embedding Racial Equity in Housing from the National League of Cities notes the following statistics on race and housing in 2020:

  • Homes in Black neighborhoods are undervalued on average by $48,000 per home.
  • Black, Indigenous, and Latinx households are more likely than white households to be extremely low-income renters.
  • Low-income women of color are particularly cost-burdened and face higher rates of eviction.
  • 63% of Indigenous populations are severely housing cost burdened.
  • Black people make up 13% of the general population, but more than 40% of those experiencing homelessness.

What Can Local Governments Do?

Though affordable housing is an issue with which local governments often struggle, they have little ability to control major factors contributing to housing affordability, such as economic growth and population growth, that often lead to an increase in the demand for housing. However, a local government can address or mitigate constraints around the production of housing within its jurisdiction. The state Department of Commerce suggested the following steps in a 2019 Housing Memorandum.

  • Update the housing element in your Comprehensive Plan: Per WAC 365-196-410, each city and county in the state should develop a housing element, or a plan to identify and meet the housing needs of residents living within the jurisdiction. These housing elements should be regularly evaluated and updated to meet the current needs of the community. Local governments should be setting ambitious goals to increase housing, promote healthy communities, and end housing discrimination.
  • Perform a housing needs assessment: A housing needs assessment helps jurisdictions understand their current and future housing needs to serve all economic segments of the community. This should include a racial impact study to identify how housing and land-use policies impact members of the community differently. (See Commerce's 2020 Housing Needs Assessment Guidebook for more details).
  • Create an affordable housing action plan: An affordable housing action plan is a supplement to a local housing strategy. It provides practical responses, including local initiatives, as well as further prospects for housing reform. (See Commerce's 2020 Guidance for Developing a Housing Action Plan for more details).
  • Fund equitable housing development: Cities can reevaluate their budgets to determine how much they should be spending on affordable housing and community development. They can then determine how much intergovernmental or philanthropic funds they require for long-term equitable housing solutions.
  • Develop eviction diversion programs: Developing, supporting, and funding comprehensive eviction diversion and prevention programs that assist both renters and landlords can be crucial to long-term stability when financial emergencies arise.
  • Collaborate with housing authorities and local nonprofit housing developers: Strong partnerships with local housing authorities and developers dedicated to creating affordable housing can empower cities to prioritize low-income and affordable housing in their communities. These collaborations provide local governments with increased resources to tackle the issues.
  • Develop regulations to address a proliferation of short-term rentals: In areas with high recreational appeal or a large tourism economy, developing regulations limiting short-term rentals will protect the local community’s housing stock from intrusion by hospitality-related, non-resident occupants.

Recommended Resources

Last Modified: February 23, 2024