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Top Five Issues Driving the Spokane Housing Crisis

Eight out of 10 Spokane residents can’t afford to buy a home in current market conditions. Read that sentence again. We’re in a housing crisis like never before.

Home prices in Spokane rose 30% over the past year alone, hitting an all new high for the average median home price this week at $460, 000.

But the recent spike in home prices is only the tip of the housing crisis iceberg; the driving forces behind housing affordability started years ago.

It’s past time to take action, and that work begins by getting a clear understanding of what’s driving the crisis.

Here are the top five reasons we’re in such bad shape.

1. Population growth

Between 2010 and 2021, Spokane County’s population grew by 56,000 people, or around 14 people per day. That’s A LOT.

And data from the U.S. Census Bureau illustrates what many policymakers and homebuilders already know: Spokane is one of the cities leading the nation for population growth and the need for housing units.

The pace shows no sign of slowing. Spokane County’s population growth is expected to grow by nearly 50,000 people over the next decade, according to the state’s Office of Financial Management’s medium growth projections.

This is a problem we must solve for the sake of our growing community.

2. Lack of supply

It’s simple economics: lack of supply drives up costs, and we’re way behind on supply.

Between 2010 and 2021, Spokane County underbuilt new homes to the tune of hundreds of homes per year. Even now, we’re building around 1,400 fewer units per year than needed by our growing population. Projections show that Spokane will need to add nearly 2,900 housing units per year to meet housing demand, but we’re only building around 1,500.

The supply issue is driving up costs in the rental market, too. As home prices increase, more would-be buyers are stuck renting, creating more demand for rentals.

“The rental and single-family housing markets are very tied together,” Joel White, SHBA’s Executive Officer, told The Spokesman-Review. The rental-to-housing market connection is evident by these rental statistics:

  • 1.4% – Spokane County’s vacancy rate for all apartment units, according to the Washington Center for Real Estate Research’s fall 2021 apartment market report.
  • 10% – The increase in median rent for all rentals in Spokane from May 2021 to May 2022, according to Apartment List, which publishes monthly reports on rental data.
  • 34.5% – The increase in median rent for all rentals in Spokane since the beginning of the pandemic (March 2020), according to Apartment List.

3. Lack of skilled labor

Our members experience the shortage in skilled homebuilders firsthand. In fact, our Workforce Development Program was created in response to SHBA members saying they’re having trouble finding skilled workers.

The demand for housing drives the demand for skilled workers and contractors are finding themselves in bidding wars for workers. This results in longer build times, which is another issue driving up the cost of housing.

The labor gap is expected to get worse as a large population of construction workers near retirement age. 23% of construction workers in the state are over the age of 55 and 750,000 will be of retirement age by 2030.

Unfortunately, budgets for career and technical education (CTE) in high schools continue to be cut and students lack access to career pathways for home building trades. There’s a misconception that school districts are prioritizing trade programs but budget allocations tell the real story.

Through Frame Your Future, SHBA’s industry-funded trades exposure program, we’re collaborating with Spokane area schools and industry leaders to create a future worker pipeline for residential construction but we can’t do it alone.

4. Resistance to change zoning

Ok, so we know that we need more houses and more skilled workers to build those houses. Is there anything else keeping homebuilders from building enough homes for everyone? Unfortunately, yes.

In order to keep up with the demand for housing, Spokane needs about 2,900 more housing units per year. But under current zoning policies, that’s nearly impossible to do.

Jim Frank, SHBA member and founder of Greenstone Homes, recently told the Inlander, “the Spokane development code makes it very difficult to build anything but large homes on large lots and restricts all multifamily development to segregated high-density zoning districts. When you look around Spokane, what you see are single family homes on large lots, along with large multifamily projects. There is virtually nothing in between.”

Missing middle housing types like duplexes, triplexes and townhouses make up only 9% of Spokane’s housing while single-family detached homes account for over 68%.

Sadly several neighborhood councils and currently elected City Council members are not eager to help change zoning.

John Schram, a co-chair of the neighborhood council in Spokane’s Comstock neighborhood was recently quoted saying “I have nothing against duplexes and triplexes, just not next to my house.”

That is in stark contrast to the prioritized agenda set forth by Spokane Mayor Nadine Woodward in an effort to help bring relief to the housing emergency.

“We need more housing and greater variety now,” Woodward said. “Business as usual isn’t currently equipped to deliver new construction quickly enough to immediately increase inventory.

Efforts to modernize zoning codes and policies are underway but can’t happen soon enough.

5. Out of market buyers

The ultimate underline in the housing crisis is that our workforce simply can’t afford housing here. And there are several factors at play when it comes to who can, and who can’t, afford housing in Spokane.

A primary cause for the recent spike in prices is an influx of new residents who are willing and able to pay much higher prices for a home.

A Redfin survey revealed that in 2021, home buyers that moved into Spokane had a housing budget that was 23% higher than that of locals. These new residents are cashing out in more expensive markets such as Seattle and the Bay Area, and then using those payouts to lock down homes in our market–at far higher prices than local residents can afford to pay.

According to some reports, the individuals and families that began migrating from high-cost cities to Spokane in 2014 come with higher salaries. Steve Silbar is a local real estate agent whose clients were “nurses and teachers” when he started selling homes about five years ago. Today, his clients are engineers, corporate managers and others with higher incomes that locals can’t compete with.

Here are a few statistics from a recent study conducted in partnership with the Spokane Association of Realtors (SAR) that help paint this picture:

Housing Affordability in Spokane, 2017 vs. 2022
2017 2022
Median price of a home in Spokane $250,000 $450,000
Percent of Spokane workers that COULD afford a median-priced home 70% 15%
Percent of Spokane homes that sold for under $200,000 52% 5%

So where do we go from here?

Researchers have identified several decisive actions that our community can take to combat Spokane’s housing crisis. We also need to elect leaders who are focused on solving the issues we can control: such as reworking restrictive zoning laws and prioritizing policies that support families being able to live in the same community they work in.

We aren’t helpless in the face of this crisis, but it will take leadership, strategic planning, and cooperation across Neighborhoods and Councils to ensure Spokane is an affordable place to live… and grow.



Jennifer Thomas | Public Relations & Government Affairs Director | (509) 808-8879

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