Wednesday, April 12, 2017

Questioning the 1%


As I’ve attended City Council meetings this past year, and chatted with friends in the community, there has been one number quoted so frequently that most people believe that Bellingham has a less than 1% vacancy rental rate.
This low, low rate is being quoted as the reason for:
Increasing housing unit density in larger projects,
The reason we need to allow Accessory Dwelling units to be incorporated in Single family zoning, and perhaps eliminate the owner occupancy requirement.
That the growth management area is obstructing needed housing and we should move beyond the boundaries.
That we won’t be able to house the expected increase in population as people move to Bellingham.
So where did this number appear from?
The first mention I can find is from the Bellingham Herald in February 2015:
“Last fall (fall 2014) the vacancy rate for apartment units in Whatcom County was at 1.3 percent, well below the state average of 3.6 percent, according to an apartment survey done last September by the Runstad Center for Real Estate Studies at the University of Washington. The average rent for those apartment units surveyed was $846 a month, up $22 from a year earlier.”
Or perhaps it is this letter from Clayton Petree to Whatcom County Council
http://whatcomcounty.us/DocumentCenter/View/18320
Both declarations, of the 1.3% number according to the Herald story, and the less than 1% by Petree, reference the source as the Runstad Center for Real Estate Studies at UW.
This source is, to quote their website, “Based in the College of the Built Environments, the Runstad Center is a service organization with an industry-driven graduate real estate education program that advances and integrates the industry, producing students who become leaders and innovators in the field.”
Emphasis is mine, the Runstad center is hardly a neutral source of information, but we’ll go with it.
According to the attachments to Petree’s letter, these parts of their Spring 2016 report are the source of the 0.8% vacancy rate.





And these references certainly show that 0.8% number.
Only problem is that these statistics are only representing 1315 units in Bellingham, the multi-unit apartment buildings that are self-reporting to the Runstad Center.
No numbers drawn from small units,
No numbers drawn from single family or multi family homes.
As you can see from this Census chart, there are approximately 18, 200 renter occupied units in Bellingham.





The number being used as the vacancy rate of Bellingham is based on a Runstad report of apartment multi unit rentals equaling less than 7.5% of the total rental units available in Bellingham.
That vacancy rate is, at best, a distortion of reality.
What is the correct number? It is incredibly important for our city forecasting and growth management.
In 2014, the rate was 4.12%.





Our growth has added 770 people to the community, according to the City of Bellingham chart.
At most, our vacancy rate should have dropped by under 1% for 2015 to 3% or so.





Of course, that depends on the numbers we start with. This site says the vacancy rate is far higher.





Best of all, our current residential units permitted for building are rising at a great rate since the economic downturn during the early 2008–2011 range.





The map below shows where the current permits in the pipeline are being constructed.




Where the new units are being built






So when you see a number that seems out of line for your experiences, feel free to question its source.
Both County and City Council can use a more accurate number in their forecasts