Thursday, April 14, 2011

Whatcom County's Biggest Problem Is That We're Not Planning For Enough Empty Houses

This one takes the cake.

The happiest face that you could put on real estate in Whatcom County is that it is in the doldrums. What do we see? Empty houses. Few housing starts. Large inventories. "A buyer's market." Bellingham is helping to bring the market up a little bit, looking at County-wide figures, but what about the small cities? Grim, grimmer, grimmest. Ferndale, total homes sold down 33%; Lynden, total homes sold down 37%. Click here for the link.

What does County Council Chair Sam Crawford propose to do about this?

Provide more land for more houses.

That's right. Council Chair Crawford suggests that the fact that the Growth Management Hearings Board decided that Ferndale's boundary extended too far out into the green fields of the County (see previous post) doesn't reflect the fact that Ferndale's boundary takes in too much land. Rather, it's because the County is not planning for enough new residents in new houses. Link is here.

We just don't have enough vacant houses!

Now, someone will jump in to say that current market conditions are not the same as growth projections for the future. I understand that. As far as I can tell, though, what Sam Crawford and Jack Petree are arguing is based on past population growth, not informed future projections. Their argument appears to be that population growth between 2000 and 2010 was higher than projected, leading to a "therefore" that makes no sense to me: therefore, the County needs to put lots more land on the market to accommodate that higher-than-projected growth.

If the County hadn't accommodated sufficient population in Whatcom County over the past ten years, the bottom wouldn't have fallen out of real estate. Isn't that what the free market is telling us?

Clearly, Whatcom County's biggest problem at the moment is not that we don't have enough vacant houses. But it might be Chair Crawford's biggest problem. The County just lost before the Growth Management Hearings Board, and the natural human response is to make that someone else's fault. (Point fingers at population projections! It's their fault!). The size of his client base (he's a development consultant) depends on the availability of developable land. Less development, fewer sources of income. That's an incentive.

Finally, focusing on nonexistent "land grabs" and kvetching about the 20-year-old Growth Management Act during an election year keeps folks riled up -- a tried and true technique in this County.


  1. Even Mike Kent on his KGMI real estate show said thank goodness we avoided the unpleasant situation most other communities have faced by D R Horton NOT having built the thousands of home they originally planned to build.
    Can you imagine the loss of real estate value we would be dealing with now if someone trying to sell their home had to compete with thousands of empty new houses Horton, Caitec, Black, and Blair Murray wanted had been built? And the county, mostly without impact fees, would be in a real bind trying maintain LOS for all the population fantasized!
    Just close your eyes for a moment and try to visualize what that nightmare would look like...if only our current Council would, Sam's iron handed dictatorship might lose some power.

  2. I am curious how the high home prices in Vancouver and the Lower Mainland are affecting the purchase of property down here. I have heard that many Canadians come here looking for second homes because they are more affordable here. Any idea how much property that is?


  3. I don't know, Mary, and perhaps some realtor or real estate researcher might blog on this.

    It's not a comprehensive analysis, but Mike Kent, a Blaine/Birch Bay realtor, was quoted in the Vancouver Sun in February as saying that 90% of his buyers are Canadian, thanks to the strong Canadian dollar, compared to the usual 50%.

    The number of houses sold in Blaine/Birch Bay was down 29%, according to the source linked above. Without a strong Canadian dollar, I wonder what that figure would be.

    More generally, it seems to me that if we're going to plan and zone based on (1) assuming that the Canadian dollar will remain at its current level in the long run, and (2) assuming that providing second homes for Canadians is a good land use goal for Whatcom County, we need a robust cost-benefit analysis and an open public discussion!

  4. Birch Bay's people per house is less than 1 which means if the population projection is 1000, the zoning must accommodate MORE than 1000 houses.
    Census numbers from around Lake Samish showed 1/3 of the houses are part time (usually from Canada or Seattle.)
    Canadians are substantial land owners here.
    If they live here and enjoy Whatcom County I'm fine with it, but if they are here to make money without regard for what we want, because they don't have to live with their actions, I'm not. This goes for all out of area owners, not just Canadians. I like Canadians, they are fun people and good neighbors.

  5. Dave,

    In anticipation of the county trying to game the system on growth forecasts, market factor, occupancy, etc., I have begun collecting information.

    Birch Bay is one area with a much higher population than forecast. In the past, Birch Bay housing was seasonal and occupancy rates were low.

    Besides rural areas, the place where the new Census data shows a significant change from our 2008 projections was in Birch Bay. The total housing units for the UGA was 4,919 and a total population of 7,391. You can see, that the occupancy rate went up significantly in Birch Bay.

    The detail Census data will not be out until the end of this summer. Washington State's (OFM) estimate for Whatcom County was low. But why?

    Each year, OFM collects information from the cities and counties about housing units. Why does the Census show 1,301 more housing units than what OFM showed? Good question. Illegal rentals? We will see where these housing units show up later this year.

    At some point, I'll put together more detail on the variables of growth forecasts, assumptions and things to watch for in Whatcom County as they try to "game the system" in order to justify bloated UGAs. We're also working to make sure that professional demographers analyze this data so that we can make our arguments clear to the county, and the hearings board, if necessary.