Housing Action Plan Update

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In our September 23, 2020 newsletter we announced that the City was developing a Housing Action Plan (HAP) funded by a grant from the Washington State Department of Commerce. Since reporting on the HAP, the City and our consultants, LDC Inc., have completed a Housing Needs Assessment and released a Draft HAP for public review and comment.

Analyzing housing is complex since it represents a bundle of services that people are willing or able to pay for, including shelter and proximity to attractions (job, shopping, recreation) access to public services (quality of schools, parks, etc.) and transportation. It is difficult for households to maximize all these services and minimize costs; as a result, households make tradeoffs and sacrifices between needed services and what they can afford. 

The results of the housing needs assessment show that around 8,373 additional housing units will be needed in University Place by 2040, as the city’s population is forecasted to grow from 33,000 persons in 2018 to over 48,000 persons by 2040, an increase of 43%. Currently, the city “outperforms” the county in household to housing unit production, meaning there is no aggregate underproduction in the city. However, to keep up with population growth, the city will need to build 419 new household units per year from 2020-2040, as opposed to the 220 new housing units the city has built per year since 2010. Effectively double the current growth rate.

The population forecast for University Place, provided by the Puget Sound Regional Council (PSRC), estimated the future housing needs or housing gap between 2020 to 2040. Consequently, if PSRC’s forecast is above actual growth, the estimated number of housing units needed by 2040 should be recalibrated.

University Place households are mostly families without children, and the population is aging. Some national trends are reflected in the inventory or households and housing in University Place. For example, nuclear family households, the predominant type of household shrank from 40% in 1970 to 20% in 2018 while, in contrast, the share of single-person households increased from 15% in 1970 to 28% in 2018. Households with single persons living alone have become the most prevalent household type, which could result in smaller household sizes and increased housing unit demand. 

Household sizes in University Place average 2.53 persons per household. The dominant household compositions are families without children (37%) and non-families (34%). It is likely that a growing senior population has contributed to the smaller number of families with children.

Since housing needs change over a person’s lifetime, it is important to track shifts among age cohorts to anticipate expected demand. University Place has a higher share of individuals aged 65 years or older and experienced a larger growth in this age group between 2000 and 2018. University Place’s population likely will continue to age since population projections for Pierce County show an increased share of persons over age 65 years at 21% of the total population in 2040 (OFM projections). The city has a slightly lower share of individuals under age 18 and between 35 to 44 years, suggesting that the city’s population is trending toward seniors with fewer families with children. However, the city’s largest age cohort is still individuals under 18 years (23% of total), so there still is a fairly large number of children and families. This confirms the assertion that University Place is a family-friendly place to reside.

Consistent with national and county trends, University Place has become more diverse since 2000. The share of people of color increased in University Place by 9% from 2000 to 2018 (from a total of 26% to 35%). Households with two or more races increased from 5 to 9% by 2018, Hispanic or Latino households increased from 4 to 7% over the same timeframe.

The number of jobs in University Place has increased by 17% from 2001 to 2018, with the highest increases in job growth being in the health care and social assistance, professional, scientific, and technical services, and retail trade employment sectors.Though University Place has seen an increase in jobs, the city still had a low number of jobs to begin with and has an imbalanced job to housing ratio. University Place has a ratio of 0.5, reflecting the city’s higher availability of homes over jobs. A job to housing ratio between 0.75 to 2 would suggest more balance between jobs and housing that supports a reduction in vehicle miles traveled to work. This lack of available jobs may explain why only 7% of the residents in University Place also work in the city.

Homeownership in University Place is increasingly becoming out of reach for many households  due to the city’s high median home sales prices, which increased by 44% between 2000 and 2020. Housing sales have escalated particularly since 2015. As of mid-2020, the average median home sale price in University Place is estimated to be around $470,000, which is slightly higher than what a household earning 120% AMI can afford. Average rental rates for 2-bedroom apartments have been rising too, especially since 2015. By 2019, the average rental rate in University Place was $1,235 per month, a rate rising above the area median income.

Another noteworthy trend is the widening divergence in household income levels in parallel with intensifying income inequality. Over half of the renters in University Place earn less than $50,000 and almost half of the homeowners in University Place earn above $100,000 per year.

For more on the Housing Needs Assessment, see the Draft Housing Action Plan in the document list at Housing Action Plan page. Comments and questions are welcome. Send them directly to David Swindale, Director, Planning and Development Services, at  DSwindale@CityofUP.com. Look for future surveys on this topic on FlashVote. If you haven’t signed up for FlashVote yet, surveys take less than a minute and signup is easy at flashvote.com/cityofup.