Rising rents are drowning Washington's smaller cities

Seattle may have the highest rents statewide, but communities such as Walla Walla and Spokane have seen the most drastic losses in affordability.

Trish Divine Wilder goes through her receipts that she uses to calculate her expenses each month

Patricia Divine Wilder goes through the receipts she uses to calculate her monthly expenses, on Thursday, Jan. 26, 2023, in Walla Walla. Lately she’s had to shop at Walmart for groceries and turn down restaurant lunches with friends to ensure she has enough to pay her rent. (Amanda Snyder/Crosscut)

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Over the past two decades, Walla Walla has become a destination for wine lovers who travel to the region to enjoy some of its more than 120 wineries, stay in the area’s boutique hotels, and dine and shop in a beautiful and bustling downtown.

While leaders of this small southeastern Washington city are happy to claim this economic success, being a booming wine region has resulted in other problems for its residents.

Friends and neighbors Patricia Divine Wilder and Di Gabriel have witnessed this growth, having lived in the area on and off for the past two decades.

But the retired women, who both live in a housing development a few miles east of the tasting rooms dotting Walla Walla’s downtown, have also seen another, more concerning, trend: drastically rising rents. Both women live on fixed incomes and often wonder where they’ll get the money for future increases.

“It’s a central issue that is of huge concern to us,” Divine Wilder said.

It’s also a concern for civic leaders – not just in Walla Walla but across Washington. The sharp rise in rent in the Walla Walla area, with a population of around 45,000, is just one of many examples across the state that renting a home has become increasingly difficult from Seattle to Spokane and in every small city and town in between.

While Seattle may have the highest rents statewide, the most drastic percentage increases over the past four to five years are in smaller cities and rural areas. And affordability is not an issue just for the poor but across different income levels: Even college-educated professionals are feeling the pinch of rapidly rising prices.

Apartments in Walla Walla on Thursday, Jan. 26, 2023. (Amanda Snyder/Crosscut)

Median gross rent in Washington was nearly $1,500 in 2021, ranking it among the top five U.S. states, according to U.S. Census Bureau data. Only Hawaii and California had considerably higher rents (along with Washington, D.C.), and Colorado and Massachusetts were a few dollars higher.

Rents have continued to accelerate consistently since then, said Tedd Kelleher, director of housing policy for the state Department of Commerce. His department is working closely with the Legislature and Gov. Jay Inslee, who is making housing affordability one of his signature issues this year. 

Housing affordability has been a focus of the Legislature in recent years. In 2019, lawmakers directed the Washington Center for Real Estate Research, based at the University of Washington, to provide additional data to grasp the severity of the issue.

Several bills in the current session focus on affordability, including one aimed at limiting drastic rent increases.

Rents rising in Washington’s smaller communities

The Walla Walla Community Council, a nonprofit organization that works to engage the region’s residents on policy solutions to improve the area, researches various policy topics. In 2019, it decided to dive deeply into the region’s housing affordability issues, said Laura Prado, the council’s community research coordinator. The interest was so deep, and the topic so important, that the council recently expanded its planned research period and updated its original report.

One of the most notable findings in the council’s updated report, released last summer, was that the percentage of Walla Walla residents who were cost-burdened — spending 30% or more of their income on rental costs — was higher than in Seattle. That figure was 56% for Walla Walla renters, compared to 44% for Seattle renters.

Divine Wilder can speak to that first-hand.

As a young adult working as a waitress in Walla Walla during the 1970s, she could cover her portion of the rent — she lived with a roommate — after working a few shifts at her restaurant job.

She left Walla Walla for many years, moving around the country with her former husband and son. Divine Wilder, now single, returned to Walla Walla in the early 2000s with a bachelor’s degree from the University of Washington. Rent was still not a challenge; she easily paid $425 a month, just 17% of the income she earned as a technical writer for a local business.

Two decades later, she now pays $1,045 a month, or 53% of her income —  which puts her among those considered “severely cost-burdened,” defined as spending at least 50% of one’s income on housing.

Patricia Divine Wilder outside her home on Thursday, Jan. 26, 2023. Divine Wilder's rent rose when the property changed hands, but because she is retired and lives on a fixed income, she won’t be able to afford the continual increases. (Amanda Snyder/Crosscut)

Seattle’s high rent gives the perception that it has more cost-burdened people. But while rents are lower in Walla Walla and other parts of the state, so are wages.

“It’s something that’s occurring throughout the state,” said Steven Bourassa, director of the Washington Center for Real Estate Research and chair of the Runstad Department of Real Estate at the University of Washington.

Wilder said she lives primarily on Social Security but has managed various side jobs, such as a part-time editing position, to help cover rent increases. She’s also received monetary gifts from family members to help her stay afloat.

“The rent is going up so quickly,” she said, noting that her rent has increased by 37.5% from the $760 a month she paid when she moved into her current rental in 2018.

Under current law, landlords can raise the rent to any amount; the only requirement is a 60-day notice of any increases. However, Senate Bill 5435, which had a public hearing recently, would cap annual rent increases to the rate of inflation or to 3 percent – whichever number is higher – with a maximum increase of 7 percent. 

While the state Legislature passed a law making rent control illegal in 1981, housing advocates emphasize that the proposed legislation is “rent stabilization” – not “rent control,” in which rent is frozen to a specific price. 

No community is immune

The Walla Walla region is the most extreme example of rapidly rising rent, but no area of Washington has been immune.

A survey of 18 Washington counties from the Washington Center for Real Estate Research at the University of Washington shows average rent increases for a one-bedroom apartment of between 10% and 53.3% from 2018 to 2021, when comparable data was available. Walla Walla County reported the highest increases.

But many other counties also saw double-digit-percentage rent increases. Rent in Benton and Franklin counties, home to the Hanford Nuclear Reservation and the cities of Richland, Kennewick and Pasco, increased by 34.25% between 2018 and 2021. The 110,000 residents of Cowlitz County are emptying more of their wallets too: Rents rose by 25.47%.

Meanwhile, the latest data from the center show that King County’s average rent as of the fourth quarter of last year was just above $2,000 a month, a year-over-year increase of 2.4%. In contrast, Walla Walla County’s average rent is half that— $990 per month — but its growth rate year over year was four times King County’s, at 9.7%.

Rent is now rising more slowly in Seattle because of the city’s massive construction of multifamily housing, said Bourassa. “The volume of construction has been huge. That’s helped temper the rent growth rates relative to other places, even places close to Seattle.” 

The apartment complex where Patricia Divine Wilder, Di Gabriel and Cathy Niva live, seen on Friday, Jan. 27, 2023. (Amanda Snyder/Crosscut)

The state Legislature tapped the Washington Center for Real Estate Research to provide additional data to give policymakers a better sense of the housing affordability issue. But data has its limits, Bourassa acknowledged. It often overlooks what housing advocates and policymakers call the “missing middle”: those who may not qualify for low-income subsidized housing but may still be cost-burdened by the high rent in their community.

Data about median rent rates “is a way to get a general idea of what’s going on in the market,” Bourassa said. “It’s not capturing everybody’s experience by any means.”

Indeed, there is a distinction between affordable and subsidized housing, said Prado of the Walla Walla Community Council. Subsidized housing generally is aimed at low-income residents, but even educated professionals can be cost-burdened and need more affordable housing.

For example, the Walla Walla Community Council’s updated report shows that a police officer was spending 28% of their income on housing, hovering around the 30% threshold for being cost-burdened. A teacher spending 27% of their income on housing was in the same situation.

“You don’t have to be low-income or even moderate-income to have a mismatch between your cost … for your home and your income,” Prado said. “It applies to all income levels.”

Patricia Divine Wilder in her home on Thursday, Jan. 26, 2023. (Amanda Snyder/Crosscut)

Rent is also rising in Washington’s more affordable communities, forcing residents to adjust.

Average rent in Yakima County was $903 a month as of the fourth quarter of 2022, well below the $1,799 statewide average and among the lowest, according to figures from the Washington Center for Real Estate Research. However, rent still rose by 4% year over year.

But some Yakima County residents are paying well above the county average for a larger apartment with better amenities or to live in a nicer neighborhood.

Michelle Barela owned a home for several years, but ended up renting again nine years ago after, as she said, “unexpectedly becoming a single parent.” She found a place in the Yakima area in proximity to a good school district, and has remained there since with her now-high-school-aged child.

She currently pays $1,100 a month for a three-bedroom, two-bathroom house. However, she has neighbors who spend hundreds of dollars more a month for a similar-sized rental.

“I know other people in my area that have top-of-the-line of everything, and their rent reflects that,” Barela said. “That’s not important to me. The school district was what was important.”

With a landlord who is easy to work with and rent at a manageable level, Barela hopes she can save enough eventually to buy.

“I don’t want to move into another rental situation,” she said. “I want my own home.”

A new apartment complex, The Lodge, in Walla Walla on Thursday, Jan. 26, 2023. (Amanda Snyder/Crosscut)

Why rising rents matter for all

The conversation is shifting over who is impacted by a lack of “affordable housing.” In the past, it was mostly considered an issue for those with little to no income. But experts say not addressing this problem has a broader effect on the community. 

A December 2021 report by a group of University of Idaho professors looked at the impact of rapidly rising rent in Coeur d’Alene. The Idaho city’s dozens of lakes — including the famed Lake Coeur d’Alene —  and bounty of recreational opportunities have made it a popular tourist destination, including for those living in Spokane, just 30 miles away. These amenities have also made it attractive to new residents, driving up demand for housing.

The study found rapidly rising rents left at least 44% of Kootenai County households cost-burdened, paying at least 30% of their income to cover the $1,402 average rent in October 2021.

The study estimated that for even a studio apartment, a resident or household would have to make at least $21 an hour to afford average rent, well above Idaho’s minimum wage of $7.25 an hour. That is also above neighboring Washington’s much higher minimum wage, which was $13.69 an hour in 2021.

The most apparent impact on the community was difficulty securing workers. About 44% of executives and managers in Coeur d’Alene surveyed for the study indicated they could not fill positions due to the housing market and the resulting higher salaries required for those workers.

The lack of affordable housing stock also likely led to prospective businesses skipping the area, leading to fewer jobs.

This also is bad news for residents dependent on services, such as healthcare, because many workers in certain fields are being priced out, said Timothy P. Nadreau, a Washington State University economics professor who provided assistance for the study.

The study found that pricing out renters across different income levels would decrease the community's diversity and change it into a community for the rich, with restaurants and other services catering to that population. 

Essential workers who can no longer afford to live in a community lacking affordable housing may have to commute, and some may opt to leave the area altogether.

“You get to this point that even the higher wage is not covering the travel expense and time [to commute],” Nadreau said.

The Affinity apartments in Walla Walla on Friday, Jan. 27, 2023. (Amanda Snyder/Crosscut)

How we got here 

While rents have risen rapidly in just the past few years, the root of the problem dates back to the national housing bubble of the late 2000s, which led to what many know as the Great Recession, said Kelleher of the state Department of Commerce. While Washington experienced foreclosures and dropping home values, it did not have a glut of vacant homes like elsewhere in the U.S. because it had not experienced the level of overbuilding seen in other states.

“We never got the big vacancy rates that some [places had],” Kelleher said.

But Washington, like the rest of the U.S., did see a massive exodus of construction workers as the housing market crumbled. So when housing demand started to increase again in the 2010s, there were not enough workers to ramp up the construction of single-family homes and build the multifamily housing units needed to meet demand. That translated into high demand for fewer homes for sale and a low vacancy rate for rentals.

Everything changed when the pandemic hit in 2020. With COVID-19 forcing people to work remotely, many saw an opportunity to exit areas like Seattle and move to less-crowded — and presumably more affordable — places elsewhere in Washington. Those places also offered a multitude of areas to camp, hike, swim and ski, outdoor activities that many deemed safe during the pandemic. 

“There was a demand shock,” Kelleher said. “… That took an already tight situation and pushed it further.”

Before the pandemic, migration from urban areas to smaller towns and more rural areas of Washington occurred on a much smaller scale. People were seeking less traffic, a better quality of life and, in some cases, responding to marketing campaigns from places like Spokane, the state’s second-largest city, which advertised itself as a nicer alternative to life in the Puget Sound area.

The pandemic accelerated that trend. Many small communities, and even cities like Spokane, Vancouver and Yakima, needed more housing for an influx of new residents. 

A home in Walla Walla on Friday, Jan. 27, 2023. (Amanda Snyder/Crosscut)

Dave Bilsland, a renter in Spokane since 1996, said he questioned his city’s efforts to attract new residents as he saw housing options shrinking, not growing. “There’s not enough room for the people here,” he said.

Indeed, Spokane County’s vacancy rate was as low as 1.1% in the fall of 2021, according to the Washington Center for Real Estate Research.

Bilsland, who lives on a combination of Social Security and a small pension, managed to get subsidized housing as a veteran. But he knows others who have been on subsidized housing wait lists for years. A 2021 report from the Center on Budget and Policy Priorities, a national policy research firm in Washington, D.C., shows the wait for subsidized housing at some agencies can be as long as eight years. The report also indicates that out of the largest 50 housing agencies that provide Section 8 vouchers, only two had average wait list times of under a year.

The rent for Bilsland’s one-bedroom apartment increased from $525 a month in 2019 to $650 today. Other larger units in his building, north of Gonzaga University, also increased — from $625 a month to $800. The average monthly rent in Spokane for a one-bedroom apartment is $1,092 as of the fourth quarter of 2022, according to the Washington Center for Real Estate Research.

Bilsland said he’s well aware of others who struggle to get housing and end up homeless. Spokane garnered statewide attention recently because of Camp Hope, a tent encampment that housed upward of 600 residents this summer, making it the largest in the state. However, service providers' recent efforts to move residents to indoor shelters have reduced the number of people in the encampment to just over 120 as of last month.

Bilsland himself has been close to being homeless. Before securing subsidized housing, he had slept at friends’ homes and even spent one winter in the early 2000s in a shelter.

“This has been a problem in Spokane for years,” he said. “We’ve never had enough shelter space, and we don’t have enough houses.” 

Trish posts flyers for a community event that will help people in the community afford a home on Thursday, Jan. 26, 2023. (Amanda Snyder/Crosscut)

What’s the solution?

Indeed, housing advocates and policymakers believe the solution to addressing the state’s affordability issue is building more housing to buy and rent.

The state Department of Commerce estimates that the state will need an additional 1.05 million housing units by 2044. However, for state officials, it’s not just the number of homes that matters, but also making housing accessible to people across different income groups.

Just under half — 416,507 — of those housing units are needed for those who can afford 80% or higher of the area median income for each county. For Walla Walla County, that would mean one-bedroom units that cost $1,210 or less.

When households with higher incomes cannot buy a home due to the lack of supply, they compete in the rental market against people with lower incomes.

“You’ve got people living in lower-end units who can afford more but decide it’s not necessary,” said Kelleher of the state Department of Commerce.

Gov. Inslee’s plans for addressing housing affordability – a centerpiece of his legislative agenda this year – include proposals to increase the pace of construction of housing units. Those measures include streamlining regulations and providing construction grants to accelerate multifamily projects.

But the problem doesn’t end at construction, Kelleher said. A segment of residents — households earning 10% to 30% of the local median income — still won’t be able to afford whatever new units are built. Inslee’s budget plan would designate nearly $700 million to develop and preserve housing for low-income residents.

Commerce is also working with individual cities and towns to craft beneficial local policies, make housing action plans and change laws to increase housing supply.

One such strategy many communities have taken on is a zoning change to allow multifamily housing in single-family neighborhoods. While some Seattle neighborhoods are still fighting similar policy changes, the Walla Walla City Council voted unanimously in 2018 to allow multifamily housing in all residential housing zones. A proposal to require similar changes in all cities larger than a specific size is being considered in the Legislature this year.

Walla Walla officials got community support for the zoning change by illustrating how a mix of homes was already typical in the city, said Preston Frederickson, development services director for the City of Walla Walla.

For Frederickson, increasing housing density was something the city could control, as opposed to something like rent control, which is a state issue, in his opinion. Rent control as an approach to making housing more affordable has not been adopted anywhere in Washington. Still, it has been debated before the Seattle City Council, which often experiments with new policies before they are widely adopted across the state. 

“Now we’re seeing new subdivisions that have a mixture of single-family [homes] and duplexes, mixing renters and homeowners,” he said. “It’s nice to see that diversity of people in these areas being developed. It’s not the ‘rental district’ or ‘Here’s the homeowners' district.’”

Because Walla Walla’s new zoning policy is just a few years old, whether these changes will help increase supply and moderate rents is still unknown. 

The city is also considering a multifamily tax exemption for renovating a building where at least 25% of the units are deemed affordable.

Patricia Divine Wilder reads her testimony in support of Senate Bill 5435 before the Washington state Senate via Zoom, while Cathy Niva offers her a hand of support, in Trish’s home in Walla Walla on Friday, Jan. 27, 2023. If the bill passes, it will cap annual rent increases to the rate of inflation or to 3 percent (whichever number is higher), with a maximum increase of 7 percent. (Amanda Snyder/Crosscut)

Getting involved

While past policy discussions about housing have focused on homeownership, renters are getting involved in the political process, demanding new approaches to address affordability in their communities.

Bilsland has been active in various protests and marches demanding increased shelter space for homeless residents. He’s shown up at city housing forums to express his displeasure with a lack of housing, especially for low-income residents. He’s also supported alternatives, such as tiny homes. And he’s also active in the Spokane branch of the Tenants Union of Washington.

“We’re still pushing to get rights for tenants,”  he said.

Divine Wilder is also politically active, recently speaking for the proposed stabilized rent bill at a hearing late last month before the Senate Housing Committee. She’s also part of Common Roots Housing Trust, which aims to build affordable homes in Walla Walla and the surrounding area for purchase in the next few years.

“I’m activist-minded; that’s part of my makeup,” she said. “When I see something that doesn’t seem fair, I often get involved.”

Meanwhile, she’s had to be mindful of prices when she shops for groceries and turn down lunches out with friends to ensure she has enough to pay her rent.

“I’ve told them when the weather is nice, we can brown-bag it. I can bring a sandwich to the park,” she said.

Divine Wilder is also helping her friend and neighbor, Di Gabriel, navigate rising rent. Unlike Divine Wilder, who has managed to weather increases through side gigs, Gabriel’s budget depends mainly on disability payments.

This past summer, Divine Wilder told Gabriel about a local nonprofit offering rent assistance. In September, Gabriel could get enough aid to pay rent through March.

Since she has rent covered for several months, she’s put some money in the bank in anticipation of paying rent when the assistance runs out. Still, she’s unsure how long her savings will last, especially after additional rent increases.

“I don’t know what’s going to happen after March,” she said.

She’s prepared to make changes. She’s applied and qualified for subsidized housing, although she’s on a waitlist and could be for several years. She’s thought about having a roommate, although her current place doesn’t allow it.

Still, Gabriel isn’t ready to leave her apartment, where she’s lived for years. She, Divine Wilder and other neighbors have formed a supportive community. She’s enjoyed doing crafts in her home and taking walks around her building with her dog.

“I’m cozy, and I’m happy,” she said. “It’s everything I want.”

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About the Authors & Contributors

Martina Pansze

Martina Pansze

Martina is the former newsroom newsletter editor, where she aims to expand audiences and make it easier for everyone to participate in journalism. Before joining, Martina studied Film & Media at Whitman College and worked with tech companies in Missoula, Montana. Give her a shout at martina.pansze@crosscut.com.