The issue of affordable housing in Vancouver calls to mind a quote from Gov. Jay Inslee.
In meeting with The Columbian’s Editorial Board in December, Inslee was asked whether government intervention or the free market is the key to unlocking the construction of affordable housing.
“The private sector isn’t handling it,” the governor said.
That assertion is being echoed by city officials. As detailed in a recent article by Columbian reporter Carlos Fuentes, Vancouver added an affordability option to a tax exemption for developers more than a decade ago. In simple terms, builders of multifamily developments may include a public benefit such as a plaza, or they may designate a certain number of affordable units in order to receive a tax break.
“We haven’t had a lot of affordable units constructed,” said Patrick Quinton, the city’s director of economic prosperity and housing. “And so that was one of the reasons we wanted to revisit the program — to better understand, how do we get projects built that include affordable units? The market seems to be telling us that the current program isn’t providing enough incentive.”
Indeed, city officials are wise to reconfigure the program. Relatively few developers are opting for the “affordability option,” which means the number of affordable units is not meeting demand. Compounding the issue is a skewed definition of what constitutes “affordable” housing.
To define affordable, the city uses a formula that includes median income throughout the metro area. According to city staff, the median household income across the seven-county region is $114,000; in Clark County, the median household income was $82,719 in 2021.
What is affordable to the typical Portland resident is not affordable for the median Clark County resident. It might qualify a local developer for a tax break, but that does not make it accessible for medium- and low-income households in our county.
“I think we’re making it more attractive for developers to put more units into this pool, but … we’re not creating what people think of as affordable units,” Quinton said.
Overall, the issue points out the role that government can and should play in spurring and guiding development. If airplanes started falling out of the sky, we would expect government to intervene; when gas prices sharply increase, we demand government action; when drinking water is contaminated, we expect a response from elected officials.
But when it comes to housing, there often is a misguided mantra that the free market will solve the problem. This is Pollyannaish, ignoring the fact that incentives are necessary to promote the construction of low-income housing.
Changes to public policy can play a role in mitigating the housing shortage that has contributed to increasing homelessness.
At the state level, the Legislature this year eased zoning restrictions on cities in an effort to increase housing units and spur the development of hubs near transit lines.
Lawmakers also should revisit the Growth Management Act, which for decades has limited construction to urban areas in an effort to avoid sprawl, preserve rural lands and provide environmental protections. Those are worthy goals, but the housing shortage is reaching a critical stage.
City governments in Vancouver and elsewhere also must play a role in providing effective incentives for the development of housing units that are genuinely affordable for low-income residents. The private sector, after all, is not going to solve the issue on its own.
