If Spokane has a housing crisis, why isn’t it being more urgently addressed?

Amanda Russell has spent the past year and a half somewhere she never thought she’d be again: in the house where she grew up, living with her parents.

“It was supposed to be very temporary,” she said last week. “But it hasn’t turned out that way.”

In a housing market where the supply is exceedingly low, costs are skyrocketing, list prices are often just a starting point and a huge reserve of cash can be requisite to close a deal, Russell, a 40-year-old single mother, and her three daughters haven’t found anywhere else to go.

Russell has attended 40-45 open houses and made six or seven offers. She has included escalation clauses and offered as much as $30,000 above listing price. She has increased her budget by up to $100,000 and downgraded the size of the home she’s seeking. And while she started off aiming to keep her elementary-age kids in the South Hill schools they’re attending, she’s now open to moving them to a wide range of neighborhoods.

The trouble is, the lifelong Spokane resident can’t get anyone to accept her increasingly high offers to buy their decreasingly desirable houses.

It’s been a frustrating, overwhelming and discouraging experience, Russell said.

The question she, and countless others across the city, are asking is whether Spokane residents will have to accept such conditions – or whether the city will be able to do anything to combat them.

Mayor Nadine Woodward campaigned in 2019 with major support from Realtors, who viewed her as the candidate friendliest to boosting the housing supply to meet growing demand, and she has identified housing as one of the key areas she intends for her administration to tackle.

Asked recently what specific changes or approaches she will implement to address the need for more housing and more affordable housing, Woodward indicated she will work with a wide range of stakeholders to discuss potential solutions.

“I’d like to wave a magic wand and be able to erect all kinds of housing everywhere,” she said. “I don’t see any silver bullet as an answer or a solution to this. …. I think it’s going to take a comprehensive approach.”

She said there “are a lot of people with a lot of ideas” about what to do, and that she would engage in “a community conversation” about how to move forward.

But even staunch backers of Woodward say it’s time for the city to move from discussion to action.

As chairman of the Washington Realtors Political Action Committee in 2019, Tom Hormel pushed the group to pour more than $600,000 into local races, backing Woodward and other candidates.

At the time, Hormel rationalized the expenditures on Woodward as a means of achieving the Realtors’ aim to increase the housing supply.

“We are singularly focused,” Hormel told The Spokesman-Review in November 2019. “We are 100% a property rights and housing group. We need more housing, in all pricing levels and all types – rental all the way, in all honesty, to what is deemed McMansions. The longer we don’t have inventory, the more prices will increase.”

Interviewed last week, Hormel credited Woodward for “trying” to make change during her time in office. But Hormel also said he’s eager to see the city and other area governments start taking action.

“There’s so many things that have to be done to fix the crisis, but you’ve gotta start somewhere,” said Hormel, a longtime Spokane Realtor who is now president of Washington Realtors. “I think a lot of these communities have what I call ‘paralysis by analysis.’ … They’re not solutions-oriented.”

“We can talk about it for the next 10 years like we’ve talked about it for the last 10,” Hormel added, “and we’ll just make the problem worse.”

But wide-ranging discussions with the mayor, city council members, Realtors, outside experts and others suggest wide disagreements exist not only about how to combat skyrocketing housing prices, but about whether there’s a crisis at all.

‘More efficient’

Hormel, for one, believes the situation is “beyond crisis,” as do many others involved in supplying both market-rate and subsidized housing in Spokane.

But not everyone views it that way.

Councilwoman Candace Mumm, for one, acknowledges a change is underway in Spokane but doesn’t view it as an emergency.

“I don’t believe the sky is falling,” she said

Rather, she said, “I think we’re just playing catch-up on the prices.”

And there’s evidence to suggest she’s right.

While the median home price in Spokane County shot up 21% in a year and reached a record $325,000 in February, according to the Spokane Association of Realtors, Spokane County still lags behind much of the nation in housing costs.

The city is even further behind. The median sales price within Spokane city limits was $294,333 in February, though that represents a 24% increase in one year.

Meanwhile, the median sales price of houses across the country was almost $347,000 by the end of last year, according to the Federal Reserve Bank of St. Louis. And median prices are even higher in many parts of the West, including in Coeur d’Alene and Seattle.

Spokane’s relative affordability is part of its attraction for out-of-town buyers. Realtor.com recently put the Lilac City on a list of the nation’s 10 hottest housing markets, and Zillow named it a midsize market to watch.

Mumm acknowledged that the competitiveness of the Spokane market can be a “challenge” for first-time buyers, but she said rising home prices “can be a benefit” too.

“Higher home values create equity for our citizens who have invested in our community for many, many years,” Mumm said.

With such benefits for existing homeowners on the table, Mumm objects to the kind of comprehensive changes to the city’s development and zoning code that some have called for.

“I don’t see a need for sweeping changes,” Mumm said. “That’s true.”

Instead, she said, the city should focus on concentrating development along the centers and corridors prioritized for growth in the city’s comprehensive plan, which guides growth.

To encourage growth in those areas, zoning, developer incentives and other tools are used to encourage denser housing mixed with commercial and office space to create more urban, walkable zones along public transit lines.

Mumm said the centers-and-corridors model provides a blueprint for Spokane “to grow from being a two-dimensional city to a three-dimensional city in certain areas, while preserving most of the neighborhoods as they are … And this is what the citizens wanted. We had 5,000 citizens help build that comprehensive plan 20 years ago.”

Asked why the model hadn’t yet solved the problem after so many years, Mumm said the city “never fully implemented the centers-and-corridors vision of our citizens.”

And rather than push for sweeping changes, Mumm would prefer the city to complete that unfinished business.

“I think the best return on investment, because we’re in charge of budget and policy, is to invest where our citizens have already invested, to reinvest where citizens have already chosen to build up their community,” Mumm said. “And we have the capacity in our centers and corridors that our citizens are asking for. And I think we should deliver it.”

In 2019, the city took one step in that direction, expanding the boundaries of a multifamily tax exemption program by more than 50% within its centers and corridors.

Mumm also believes there are limits to the city’s ability to combat rising housing prices, arguing that “there are other forces that have a larger impact” on Spokane’s housing prices than city regulations, such as record-low interest rates, the pandemic and major population shifts.

Lori Kinnear, Mumm’s colleague on City Council, agrees.

Kinnear wants to focus on centers and corridors, which make “our city more dense and more efficient,” rather than push to expand its Growth Management Act boundaries or remove development fees, as some have proposed.

Kinnear also is open to reviving some incentives for developers that recently lapsed.

If the city does so, Kinnear believes it will fuel what she views as a positive “trend” that can already be seen in city permit data.

Last year, the city issued 246 single-family permits and 285 for multifamily units. While those are both below the 20-year average of 354 and 305, respectively, Kinnear said those numbers are still strong when the effect of the pandemic on the construction industry is taken into account.

“I think, for a municipality in a region, we’re doing a good job,” Kinnear said. “We cannot go down this path without other municipalities helping out and without the county helping out and without the city helping out. To say the city of Spokane has to fix this is not realistic.”

Woodward said she, too, believes a regional approach is required.

And like Mumm, Woodward and Kinnear said they oppose making broad, citywide changes to zoning, such as eliminating residential single-family neighborhoods, as some have suggested.

“I think there will be a backlash from a lot of the neighborhoods that don’t want to see that happen,” Kinnear said. “I think that’s draconian. We don’t have to do that.”

Woodward agreed.

“I don’t think there’s anything we need to do that’s so sweeping,” she said.

‘All of the above’

But some argue that sweeping change is exactly what the city needs to combat an overwhelming problem.

Greg Francis, vice president of the city’s Plan Commission and director for operations for ALCS architects, has no doubt the city is facing a crisis. And while he thinks “the centers-and-corridors philosophy is a good philosophy overall,” he doesn’t think it offers “the total solution.”

To truly tackle the problem, he says the city needs to rethink its commitment to residential single-family zoning.

While that may sound drastic, Francis is adamant it’s not.

After all, he points out, Spokane existed for decades without a zoning system at all, when people were allowed to build a diverse array of housing within neighborhoods that are now reserved for detached single-family homes.

The evidence of that model’s success, he said, is everywhere, including in the Rockwood neighborhood where he lives.

“There’s this concern that if we change single-family (zoning) … that we are somehow going to destroy the character of these single-family neighborhoods,” Francis said.

But when Francis walks down his block, he said, he walks past apartments and duplexes that house eight more families than would be able to live in single-family homes.

“So what I think we need to do is revisit what that means,” Francis said.

Eliminating single-family zoning, he argues, would “provide a slightly more intense residential fabric to create the opportunity for more housing for more people.”

While he predicted the kind of “backlash” anticipated by Kinnear will come, Francis said that “sometimes we need to push forward on something even if it doesn’t have as much public support as we’d like.”

“Part of our thing is that we need to educate the people that are currently living there,” he added. “But can we wait until everybody’s educated? No. I think we need to act before then. … So maybe we need to educate our elected officials. These housing types are here today, why can’t we still build them? And maybe that could drive the code change and then as things develop the rest of the population comes along. And there’s a lot of ways to change the development code to make these missing-middle types.”

Ben Stuckart is currently executive director of the Spokane Low Income Housing Consortium and the board chair of the Continuum of Care. But he was previously city council president and the mayoral candidate who lost to Woodward.

He said the answer to the city’s housing crisis isn’t an “either/or situation.”

“It’s an all of the above,” he said.

He’d like more money for affordable housing, expansive changes to zoning, greater funding for the planning department and more approval for projects that do come before the city council.

Stuckart points out that the city hasn’t had a planning director since 2018, that it has sometimes rejected rezoning for the kind of dense development called for in the centers and corridors plan, and that it has resisted a review of single-family zoning, which he argues is “really perpetuating the racial inequities of the past.”

“So you’re not only not doing sweeping change, you’re also turning down projects that could help the problem,” Stuckart said. “So you’re not addressing it on the micro or the macro (level).”

He said the city could make immediate progress by enacting a host of regulatory reform put forward in 2019 by Jim Frank, whose Greenstone Homes developed Kendall Yards.

Frank’s proposal would alter the rules governing lot sizes and dimensions, revert to the city’s pre-2006 planned unit development standards under which Kendall Yards was permitted, reduce the fees and regulations governing infill development, eliminate rules that require new lots to be the same size as adjacent lots, and loosen the restrictions on accessory dwelling units.

Only the final proposal has formally begun making its way toward possible implementation. The Plan Commission’s 2021 work plan includes consideration of an update to the code for accessory dwelling units.

Stuckart, though, said the whole slate “could’ve been adopted by the end of 2020 easily, and it could’ve helped with the infill situation.”

But he’s pessimistic real change will come.

“If things continue under the status quo with the same staffing issues – so lack of staffing, lack of resources inside city hall, lack of leadership inside city hall – I’m not sure we’re going to see the changes we need for a long time,” Stuckart said.

Councilman Michael Cathcart often sits on the opposite end of the political spectrum from Stuckart, but he agrees that the city needs to act more urgently to address housing, even if there are some issues beyond its scope.

“I would say that in the big picture, in the grand scheme, I think there are a lot of changes that we can make locally to reform housing, to reform land use, to essentially bring some balance back to the market,” Cathcart said.

He said Frank’s package could provide a framework to allow “more efficient use of land.” He also said he would “create some sort of incentive package to limit, or perhaps even waive, a lot of permitting fees on homes that are under a certain price point so that we can ensure we’re getting more attainable housing built.”

As for zoning, he said it has to change and that it would be best to look across the city to make the appropriate changes.

He views the permitting data from the city differently than Kinnear, arguing that 2020 “should have been one of the best years of permitting,” since it was a year of such exceptional price increases.

Cathcart said he’s frustrated the city still lacks a planning director and that “we need some more planning staff to do analyses and put the codes together.”

While Woodward has vowed to advertise for the planning director position, Cathcart thinks the clock is ticking, not only for homeowners but for the city. The city’s urban growth boundary is set for a periodic update in 2025. Cathcart said that gives Spokane “four years to improve growth in the city.”

Otherwise, he warned, adjustments to those boundaries will allocate growth not to Spokane but to Liberty Lake, Airway Heights, Spokane Valley and other faster-growing municipalities in the county.

“We cannot continue to kick the can,” Cathcart said.

‘Barriers’

It may already be too late, warned housing developer Frank.

Spokane’s framework development makes it challenging, if not impossible, to build within the city, he said.

He points to the Latah Valley, for example, where hundreds of projects have been stalled due to a Washington Department of Transportation-imposed moratorium on development that will apparently last until the city improves its local road network.

“I feel that the process that they have for things like what’s happening in the southwest part of town is, they’re fundamentally designed to make sure it doesn’t happen,” Frank said.

And while Mumm and Kinnear argue centers and corridors should be the focus of the city’s efforts, Frank notes that they both served on a committee that recently recommended deferral of a developer’s proposal to create a new center and a new mixed-used development in the Latah/Hangman neighborhood.

According to Frank, those officials are saying, “We need centers but this isn’t the right place for it. So let’s study it and then we will decide this isn’t the right place for it.”

Local officials often tout Kendall Yards as a model for the kind of dense, mixed-used development they would like to see, but Frank said it “could not be built today under the city’s current zoning code, because it doesn’t permit the things that we have done.”

The result, he said, is that he has turned his attention elsewhere.

One major example: a 1,400-unit mixed-use development with 1.2 million square feet of commercial space that Frank is pursuing just north of Spokane’s city limits, in Mead.

And he said he’s not the only developer avoiding Spokane.

“I think you’ll see that a lot of the major housing investment is going outside of the city, simply because they are encouraging a wider variety of housing and housing options,” Frank said. “The county, for example, has a mixed-use zone that can be used anywhere. So it’s not restricted to certain center-and-corridor locations, for example. So you can apply for a mixed-use zone in the county and it allows you to create more integrated, walkable neighborhood where uses are mixed at a finer scale. Liberty Lake and most of the jurisdictions in North Idaho allow the same thing.”

As it stands now, he said, the vast majority of the city is zoned residential single family with scattered pockets of residential multifamily zoning, where the minimum and maximum densities are 15 and 30 units per acre.

“What we’ve done is created these exclusive single-family zones and then we’ve created these multifamily zones where they create 200-unit apartment projects,” Frank said. And you have to drive everywhere you go. … And people complain. They don’t want to see the 200-unit multifamily projects, and rightly so.”

Instead, he said, diverse housing types need “to be integrated at a finer scale in a range of neighborhoods. And that is essentially what the city is reluctant to do.”

He said the source of that reluctance is “complicated.”

“Part of it is education. Part of it is people don’t take the time to really understand these issues that we’ve been talking about,” Frank said. “They don’t take the time to understand them in a way to make a clear decision.

“Part of it is politics,” he continued. “They don’t want to face the wrath of people who own homes in suburban neighborhoods. They don’t want to face the political push that will come from a wider range of housing in neighborhoods.

“And there are a lot of neighborhoods that want more infill development and they want more housing constructed in their neighborhoods,” Frank continued. “But they’re all inner-city neighborhoods that house middle- and low-income residents. The higher-income neighborhoods don’t want this. They want to protect their neighborhood values.

“And the regrettable truth is that lower-income families don’t have the same voice that high-income families do. So if I propose something in Comstock, there will be an immediate negative response. But I propose the same thing in East Central, nobody might say a word about it. Wealthy neighborhoods have money, they have time. And they have resources that low-income neighborhoods just don’t have.”

‘Expanding, expanding, expanding’

The city’s response to the housing crisis is being guided, in part, by the formulation of a Housing Action Plan.

For nearly a year, planning staff has been holding stakeholder roundtables, forming a working group, and conducting community and industry surveys. Though it won’t lead directly to any changes to city housing policy, the goal of the plan they come up with will be to “identify ways to meet housing needs now and into the future,” according to a draft report produced as part of the study.

But that report, known as a Housing Needs Assessment, includes a much-disputed determination that the city is, in fact, building enough housing already.

“To accommodate forecast housing needs for the City of Spokane, around 357 housing units need to be produced per year through 2037,” the report reads. “Meeting this forecast housing need is achievable given the City of Spokane has seen 537 units on average built annually between 2010 and 2019.”

A wide range of groups and individuals, including Woodward, Council President Breean Beggs and the Spokane Association of Realtors, have questioned the conclusion.

As for Hormel, who is now state president of Washington Realtors, he said the numbers in the Housing Action Plan are “ridiculous” and called the city’s housing situation “beyond crisis.”

In an effort to push back on that data, the Spokane Association of Realtors plans to issue its own housing report “shortly” in an effort to combat the city report’s “patently false” conclusions, said Eric Johnson, the group’s president.

That report will be based, in part, on a February summit hosted by the local Realtors association.

There, James Young, director of the Washington Center for Real Estate Research at the University of Washington, argued that, while Spokane remains comparatively more affordable than other areas, there is more to the story.

Young described a sharp drop in the percentage of homes sold in Spokane at a price considered affordable to a local first-time buyer.

In 2014, his data showed, 45% of homes sold in Spokane were affordable to a first-time buyer. Last year, that number dropped to 16%.

That’s just one of many metrics indicating that Spokane is both affordable for those moving to the area in droves from more expensive areas – and increasingly unaffordable to those, like Russell, who live in Spokane.

The city anticipates completion of the Housing Action Plan soon, at which time it will begin working its way toward adoption.

Beggs said he and his fellow city council members will begin considering how to implement changes “as soon as we get that” report.

But he acknowledged it won’t be easy to come to a consensus.

“We’re not a 6-1 majority on this issue,” Beggs said. “There’s probably three or four groups. And the groups are pretty small if you divide up the seven.”

While council is expected to consider accessory dwelling unit reform and “transit-oriented development,” he said he doesn’t “expect the city of Spokane will undo single-family zoning anytime zone.” And even limited changes could be hard to see through.

He said there’s “some fear and trepidation about adding some ADUs.” And while Beggs said he’s “committed to them,” that “doesn’t mean they’ll be everywhere.”

Beggs said he’s open to other tools to boost housing options, but “the challenge is, we don’t have a lot of tools granted to us.”

Even those it does have, he said, could be hard to use.

“We could use more (developer) incentives,” Beggs said, “but in order to get that money, we’d have to get it from taxpayers. So we’d have to raise taxes.” And the people “who would really see (the tax hike) are homeowners who think, ‘Everything’s fine. Don’t raise taxes.’”

That points, he said, to “a bit of a divide between the 50% of people who own their homes in Spokane and the 50% who don’t.”

“As council president, I’m trying to bridge that divide and get a win-win,” Beggs said.

“What we’ll likely do is continue on our road of expanding, expanding, expanding, and as people see that it works,” he predicted, they’ll be open to further changes.

‘More than housing’

Ultimately, Beggs said, the city needs to work with developers interested in providing missing housing types, with affordable housing providers to build new units and with other stakeholders “to keep pressing forward” and not “get left behind.”

“We need more Jim Franks,” Beggs said. “And then we need these changes in land-use and zoning and building codes to make it easier for people to do that kind of construction.”

But as Frank focuses efforts elsewhere, he said the city of Spokane is facing a reckoning.

“In a way, it’s about more than housing,” Frank said. “It’s about what kind of neighborhoods are we building and how resilient those neighborhoods are and how do we deal with climate change and all of that? When you just have a development code that reinforces low-density suburban development, which is what the city of Spokane has, what sense does that make for where the world’s going?

“Forget the housing,” Frank continued. “Is that where we want to go? What kind of neighborhoods do we want? That has been lost in the discussion, that this is about more than affordable housing.”

For Russell and her daughters, it’s about moving into a place of their own.

She put in yet another offer on a house last week. And again it wasn’t accepted.

And as time keeps passing, prices keep rising and action keeps being discussed and delayed, Russell is worried things will only get worse.

“I’m starting to get nervous that the (interest) rates are going to start going up,” she said.

Michael Neal, senior research associate at the Urban Institute, said he’s concerned about the same thing.

“There could be a real shift this year, where the declining housing supply is complimented by the fact that mortgage rates are higher,” Neal said. “I do think the combination of them will have real adverse implications for housing affordability.”