Unaffordable housing a threat to Olympia economy, says city planner

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Unaffordable housing threatens the Olympia economy, Strategic Projects manager Amy Buckler told Olympia planning commissioners.

"Although the housing market is cooling due to inflation and higher mortgage interest rates, costs are still at record highs," Buckler noted in a meeting held Monday, June 27.

As of April 2022, she said the median home price increased to 19% from last year, while median house rent increased to 9.9% from 2019. Buckler sees it as a workforce recruitment issue. "We've all heard the story of an employer offering someone a job. They came out, looked around and then turned the job down because they said they couldn't afford to live in your community. This is a big issue for our economy."

She said that one of the biggest reasons why housing costs are going up is that Olympia is not keeping pace with demand.

Citing the Thurston Regional Planning Council projections, Buckler said Olympia needs to build 714 units yearly over five years but met only half of that.

As part of the preparation for Olympia's economic resiliency plan, Olympia Economic Development Director Mike Reid said they have been interviewing all of the leaders across the community to understand how residents can survive the next hiccup and be economically resilient.

"We ask them, what's the biggest thing that you are looking at in terms of ensuring that you've got your workforce needs here? Everybody is saying affordable housing," he said.

Reid added they are seeing employees end up in different places because there is no home ownership opportunity in Olympia at the high price rate.

Development activity

Despite challenges with labor shortages and rising costs, Buckler said development activity is robust as many multifamily housings are in the pipeline.

Relaying information from Planning Manager Tim Smith, she said multifamily dominates the development activity:

  • Downtown, 441 units
  • Eastside, 505 units
  • Westside, 678

Buckler said single-family subdivisions are picking up with 481 lots in review and construction and commercial interest – including restaurant/drive-thru.

Reusing workspace

Reid said Olympia should consider converting offices into residential units as Washington State appears to be planning for a shift in the work landscape that is remote and hybrid influenced by the pandemic.

"I want to underscore… there will be an opportunity to convert the office into residential. I think we have a unique opportunity to look at when an office building becomes vacant, find ways to reuse that building to turn it into residential," he said.

Buckler said work from home and hybrid work increased to 71% on Capitol Campus and 63% in Thurston.

She said remote and hybrid work circumstances were slowly inching up to 3.1% to 5.5% countywide from 2017 to 2020.

"COVID-19 hit and then it jumped to 63%. How much will that stick? We don't know yet. But many state workers don't seem interested in returning to the office," she said.

Buckler informed the planning commissioners the state is currently working on two provisos related to facilities: reduction in leased office space by an agency for 2024-2025; and evaluation of the short and long-term facility and information technology needs based on the new hybrid work environment.

"This will have implications for Thurston County's urban area. We have a lot of older office spaces in Olympia and Thurston County. This could be a great opportunity for adaptive reuse into housing and mixed-use," she said.

Comments

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  • Miller19

    Question: why cram more people here? Maybe those people could find another place. What jobs are they going to have if they live in all the former office space?

    Wednesday, June 29 Report this

  • JJmama

    Olympia has a planning problem.

    All the high priced new rental units downtown (with over $10M in tax exemptions for their developers, even though no affordable housing is included) continue to buoy rents UPWARD for all, not downward. My son lives in a modern two bedroom apartment near Green Lake in Seattle, and it's less expensive than a new one bedroom here downtown. Our services don't match our rental prices....who wants to pay that much in downtown Olympia?

    NONE of them are condos for sale....only rent. If you want older population to move out of their single family homes and free these up for younger families so that we don't cut down all our trees and clear all our beautiful farmland to build new single family housing developments in the city....why isn't anyone building condos for sale?

    STOP GIVING TAX GIVEAWAYS UNLESS DEVELOPERS BUILD AFFORDABLE HOUSING!

    Thursday, June 30 Report this

  • BobJacobs

    I'm so tired of the staff's misleading pronouncements. "Olympia is not keeping up with demand". "Olympia needs to develop..." "Olympia should consider converting office space to residences". Who is "Olympia"? In these quotes it is developers and builders and their associated professions. Not the city.

    Right now there is tremendous demand for more housing due to the aftereffects of the actions of corrupt financial institutions in 2008. Excess demand means good profit potential. The private sector will supply the needed housing, except for the needs of low-income people which have to be met by government actions.

    All the city needs to do is regulate this development appropriately and let the private sector do its job.

    Bob Jacobs

    Olympia

    Thursday, June 30 Report this

  • JasonS

    To answer JJmama's question: The reason why condos aren't being built for sale in our state (or at least in the Puget Sound region) is due to liability concerns. You can search for details about this online, but in short, until there is reform regarding how much liability builders have for issues which may arise after condos are built and sold, it will be considered a risk not worth taking in the eyes of builders.

    Thursday, June 30 Report this

  • Miller19

    Can confirm a Jason’s reply to JJmama. The RCW on condos makes it quite onerous.

    Also, what is driving the housing demand here? Where are the jobs?

    Thursday, June 30 Report this