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