On Monday night, the Vancouver City Council approved a new lease agreement with Block 10 developer Holland Partner Group, allowing the project to tap into the state Multifamily Tax Exemption program to reduce its tax bill for eight years in exchange for making at least 20 percent of the units affordable.
Mayor Anne McEnerny-Ogle joined residents at the meeting in expressing some frustration with the deal, mainly due to a definition of “affordable” that sets a monthly rent limit of $2,197 — an amount hundreds of dollars higher than the city’s median rent, which is itself already far higher than the national average and continues to climb.
Vancouver’s median rent was $1,427 for a one-bedroom apartment and $1,684 for a two-bedroom apartment in the most recent monthly report from the online service ApartmentList estimates.
That rental rate puts Vancouver well above the Portland median of $1,340 and about on par with the Seattle median of $1,690, according to the report — although several other cities in the Portland metro area have higher median rates. Hillsboro, Ore., leads the pack with a median two-bedroom rate of $2,100.
Vancouver showed 2.1 percent median rent growth from October 2018 to October 2019, according to the report, putting it ahead of both the state median rate growth of 1.8 percent and the national median rate growth of 1.4 percent over the past year.
“Renters will generally find more expensive prices in Vancouver than most large cities,” the report concludes.
The ApartmentList monthly report offers a detailed snapshot to compare rents among cities in the Portland metro area, although the company cautions that the listing information from its website tends to skew toward luxury apartments.
Differing estimates
The report’s figures come in a bit higher than estimates from some other online services. Real estate website Zillow estimates the median rate at $1,275 for one-bedroom units and $1,475 for two-bedroom. The National Low Income Housing Coalition’s 2019 Out of Reach report estimated the fair market rate of a one-bedroom apartment in Clark County at $1,234 and a two-bedroom at $1,441.
But the lower estimates only serve to further highlight the disparity between Vancouver’s median rent and the “affordable” cutoff as defined in the Multifamily Tax Exemption program.
The tax exemption is a state program that allows cities to pick specific areas for multifamily development — in Vancouver’s case, the downtown area and Fourth Plain corridor.
Within those areas, developers can apply for an eight-year exemption if at least 20 percent of the units are affordable for tenants earning up to 100 percent of the area’s median family income, based on data from the U.S. Department of Housing and Urban Development. A unit is considered affordable if it can be rented for no more than 30 percent of a tenant’s monthly income.
Ten-year and 12-year exemptions are also available if at least 20 percent of the units are affordable for tenants earning up to 80 and 60 percent of the area’s median family income, respectively.
Skewed formula
The HUD data groups Vancouver together with Portland and Hillsboro, resulting in a median family income of $87,900. That translates to an “affordable” cutoff of $2,197 per month for the eight-year tax exemption.
The problem is that Vancouver is not Hillsboro. The U.S. Census Bureau estimated the median family income for Vancouver by itself to be $55,600 as of 2017.
The Out of Reach report found that an average worker in Clark County would need to earn an hourly wage of at least $23.73 to afford a one-bedroom unit and $27.71 to afford a two-bedroom, using the 30-percent-of-income standard for affordability.
The report estimated that about 34 percent of Clark County’s 167,717 households are renters, and the estimated mean renter wage is $15.88 an hour.
The affordability issue is a pressing concern, not just in Vancouver but nationally, at a time when both rental and homeownership costs have been rising and young renters appear to be pinned down by rising costs.
In a separate report released last week, ApartmentList found that nearly half of millennial renters have no down payment savings, and 12.3 percent of them say they plan to “always rent.” In the Portland metro area, that figure rises to 16.8 percent.
Among those who say they plan to rent forever, 69 percent said it’s because they can’t afford to buy a home, and among those who do plan to buy a home, 70 percent said they couldn’t afford one right now, according to the report.
