Do you want content like this delivered to your inbox?
Share
Share

Massive Change in the Spokane Housing Market!

Haydn Halsted
Jul 28 12 minutes read

The landscape of Spokane housing could change forever. After a couple intense years in the housing market here in Spokane, major changes have begun to take effect in order to combat the continuously challenging housing market, both in the rental and resale space. We’ve seen headline after headline concerning rising home prices, rising rental rates and now in the last couple months, rising interest rates have started to compound as well. 


As of the beginning of the pandemic, home prices have increased 57% and rental rates have increased nearly 50% as well. The Spokane Association of realtors recently stated that they believe Spokane is short about 25,000 housing units in order to get us to a more stable market where rental vacancy would sit between 5-10% instead of 1-2% and the inventory of homes would be around 2-3 months instead of 15 days. 

Spokane Mayor, Nadine Woodward, declared a Housing Emergency back in July of 2021 in order to begin to take steps towards combating the major lack of supply we were and still are experiencing. We started to see progress in November of 2021 when the city approved two zoning changes for a couple of private landowners in the city off of East Cleveland and a few lots near W Sinto and W Maxwell that allowed these owners to build larger multi family complexes on the properties. 


Fast forward to July of 2022 and the Spokane city council has unanimously approved a 1 year zoning change that will allow for small multi family properties to be built on any single family lot. 


So, let’s go through a few concerns and then the opportunities that this allows for. 

First off, many people are worried that an apartment building is just going to show up next door to their home. That’s not completely the case. This initiative focuses on “middle housing” which is two to four unit buildings and townhomes. Now, at this time there is no restrictions on the number of allowable attached townhomes on one parcel, but based on the building requirements for townhomes the is a limit for the majority of parcels in the city. 


Townhomes will be required to be at least 16 feet across for units that have parking in the rear and need to be 80 feet in depth. Well the majority of parcels in the city are roughly 50 feet across and any where from 100 to 140 feet deep. 

I know when I first read this that I imagined on a standard parcel you would just line the townhomes up sideways or in other words, if all the homes on the street are facing this direction, the townhomes might face that direction, but that’s actually not the case because if they’re all lined up sideways they wouldn’t be able to get to that 80 foot depth requirement because the 50 foot parcel would not allow for that. This means that the only option for townhomes is to have them face the same direction as the rest of the houses on the street and with the minimum requirement of 16 feet, this only allows for 3 townhomes per 50 foot wide parcel. This doesn’t include the need for any setbacks from other properties that may or may not be required once the city finalizes the regulations for this. 


So with all that said, yes, there might be anywhere from 2-4 units being built next to you, but it won’t be a massive complex. 

Another concern that has been voiced so far is that even with it being limited to a maximum of four units per parcel, people are concerned over parking and noise from more people entering their neighborhood. 


I think this feeds into a limiting belief that all multi family units are bad and create issues for a neighborhood. It’s a mindset that we’ve grown accustomed to here in Spokane where we must separate multi family housing from single family housing even though this city was built on combining the two. 


Spencer Gardner, Spokane’s new planning director recently spoke on this topic at a recent community assembly. He showed a similar time in history when Spokane had a massive spike in population growth between 1900 and 1910. 

70,000 people came to Spokane during that time which tripled the overall population. In the last ten years in Spokane between 2011 and 2021, we’ve seen a population growth of about 55,000 people with a population around 400,000 just to put that into some perspective on how massive of a growth that was for the time period. 


During that time period, Spokane created neighborhoods like Browne’s Addition, Cliff/cannon, perry district, and the logan neighborhood. All of those neighborhoods are examples of common places where you see a variety of housing types and that was done on purpose. Back then, we believed that people of all income levels should be able to pick which neighborhood they would like to be and grow into that neighborhood. It was a natural path to wealth to start in Browns addition renting a small studio apartment, to then purchase a duplex in the same neighborhood and rent out one side to help pay for your mortgage (so house hacking was even cool a hundred years ago) and then you could buy a single family home and build your way up to one of the big beautiful homes as your finances improved and you built wealth over time.


During that time period, Spokane created neighborhoods like Browne’s Addition, Cliff/cannon, perry district, and the logan neighborhood. All of those neighborhoods are examples of common places where you see a variety of housing types and that was done on purpose. Back then, we believed that people of all income levels should be able to pick which neighborhood they would like to be and grow into that neighborhood. It was a natural path to wealth to start in Browns addition renting a small studio apartment, to then purchase a duplex in the same neighborhood and rent out one side to help pay for your mortgage (so house hacking was even cool a hundred years ago) and then you could buy a single family home and build your way up to one of the big beautiful homes as your finances improved and you built wealth over time.

In the 1910’s, local and federal officials started to use zoning laws to basically discriminate against people that were low income or minority by creating neighborhoods that were only meant for the wealthy. They weren’t allowed to discriminate directly against any one group by federal law, but they found a work around by creating places where only wealthy people would be able to afford to live. Thus came the massive growth of single family zoning in Spokane where now over 2/3rds of the land in Spokane is zoned as single family. 


We’ve come a long way from that time and in order for Spokane to continue to grow as a city, we need to look back and realize that this isn’t the first time in history that we’ve had to make accommodations like this.

Even most recently, places like Kendall Yards have been a proof of concept that townhomes are a very viable option for many people here in Spokane and have shown a high level of pride of ownership in that neighborhood. There are sections of the Perry District that have seen this same thing and now major Spokane builder, Greenstone, is planning similar communities in Mead and Liberty Lake. 


With all this info, I think the biggest take away for right now is to slow down. There are people that are incredibly excited about this opportunity, but please don’t rush in and start submitting offers on any piece of land in the city. They’ve stated that fourplexes are allowed on every parcel, but the city council and mayor have mentioned in previous discussions that there may be more regulations and restrictions on where 4 unit buildings can go and limiting them to be only within a quarter or possibly a half a mile away from major corridors. Also, if you don’t have the funds or time to completely pull all your permits prior to the year end, the rules could change you might not be grandfathered in so you will need to be prepared to move quickly. 


For those that are nervous about their neighborhood getting congested - take a look out your front door. Do you see any vacant lots or houses that are about to fall over? Depending on where you live in Spokane, the answer may be yes or no. But for many more affluent neighborhoods, this will not be a concern at all because there are way more homeowners in your area than investors. It’s highly unlikely that your neighbor is going to sell their house to a developer in your expensive and upscale neighborhood. Most of these projects will take place on areas of town that have many more rental properties to begin with, abandoned homes, or vacant lots. 

The last thing I want to say on this is that I think many of us can agree that just by driving around, the lack of affordable, low income housing, i.e. apartment buildings are on their way to a better place. There are massive apartment complexes being built all over our city right now and in a years time there will be a lot more inventory for that market. 


Additionally, new construction homes are breaking ground every day, but we don’t see any selling below $400 thousand dollars any more, if that. Our biggest struggle right now from a realtor's perspective that talks to a lot of first time home buyers, is the lack of affordable homes to purchase. 


I do hope that many of the building opportunities that take place this year will be in that attached home or townhome arena with middle of the road finishes so that buyers in the $250,000 to $350,000 range might have some opportunities to purchase. 


Right now, the median household income for a millennial or someone between the ages of 25 and 44 is $52,600 a year. The average cost to rent a 2 bedroom house or duplex in the last 3 months is $1869 which makes up 42% of their total take home pay. They could purchase that same small 2 bedroom home that was built over a hundred years ago for an average of $275,000 today. With the average downpayment of a first time home buyer being 6% and interest rates being around 6.5%, their monthly payment would be close to $2100 a month. 


This demographic of Spokane is currently being impacted the most because they don’t qualify for housing assistance and government programs like people that make little to no money at all. 


Creating 2 bedroom or 3 bedroom town homes that are nothing fancy would allow for more inventory in this price bracket and hopefully help these first time buyers get into something that they own and just like the population of the early 1900’s, could start building wealth and worth their way up to buying an actual home down the road. 


Again, this zoning change is so far only a year long while the city works to create a more permanent solution, but I think there’s a lot of opportunity for people of all walks of life to have the opportunity to own real estate in some capacity or begin investing and building some major wealth for their families. 

Looking for Your Dream Home? We Can Help

To navigate these changing market conditions, hopeful homebuyers need expert help. If you’re interested in buying a home, contact our team today. We’ll guide you through the process and help you find your dream home.

Click Here
We use cookies to enhance your browsing experience and deliver our services. By continuing to visit this site, you agree to our use of cookies. More info