A King County renter needs to make almost $92,000 a year to afford a modest one-bedroom apartment, according to a recent report by a leading affordable housing advocate.
That’s far above the average Seattle renter’s income of $81,600 — a discrepancy keeping people cost-burdened by their rent.
Even for those making north of $92,000, the high cost of renting is pushing homeownership further out of reach.
“You’ve got a lot of people … who will not be in a position to save enough money to access housing that is approaching a million dollars,” said Gregg Colburn, a researcher and associate professor in the Runstad Department of Real Estate at the University of Washington.
The National Low Income Housing Coalition used U.S. Department of Housing and Urban Development statistics to analyze the affordability of “modest” rental housing in counties across the country. HUD defines “affordable” as housing where occupants spend no more than 30% of their gross monthly income on housing costs.
In King County, HUD has determined that a one-bedroom apartment costs $2,293, including rent and utilities. Comparing that figure with statewide estimates reveals people in King County need to make around $20,000 more a year than the average Washington resident to afford that monthly cost.
High rents and increasing electricity prices are contributing to growing housing costs for renters in King County.
This was the first year the average rent for a one-bedroom apartment in King County reached $2,000, according to the University of Washington’s market reports. A tenant paying all their utilities is spending $185 a month on average — $25 more than this time last year, according to the Seattle Housing Authority.
Nearly half of renters are cost burdened, meaning they spend more than 30% of their incomes on rent, according to the Puget Sound Regional Council.
Someone making Seattle’s minimum wage of $20.76 per hour would need to work 85 hours a week to afford the same apartment.
“I think it just speaks to how far out of whack housing costs are relative to what low-income people can actually afford,” said Daryl Fairweather, Redfin’s chief economist.
Still, the cost of renting is significantly lower than the estimated costs facing someone purchasing most homes in King County today.
Redfin estimates a household needs to earn around $219,500 a year to afford the median home sale price in the Seattle area, which was $875,000 for a condo or house in July.
Although the average salary in King County is around $132,000, according to the state Employment Security Department, that doesn’t mean the average couple can afford to buy in today’s market, Fairweather said.
“A lot of people even feel like making a median salary, it’s really tough to make the math work,” she said.
Many people, especially those with high rents, aren’t able to save enough for a competitive down payment. But let’s say someone did have enough for a 10% down payment on that median-priced home, and secured a mortgage with an interest rate of 6.5%. That person can expect to pay almost $5,000 a month in just principal and interest.
“We do have to have a broader conversation of how do we reconcile the incomes that people are going to have with the cost of housing,” Colburn said, “especially for folks who are going to be renting for much of their lifetimes.”
While rents have largely stabilized as thousands of new multifamily housing units have hit the market, there’s no indication that housing costs are moderating.
Average one-bedroom apartment rents in King County have gone up almost 58% over the last decade, according to UW’s market reports, while single family home prices have doubled.
“Ultimately, the trajectory of rents is not sustainable,” Colburn said. “If we think about this over the next 50 years, it cannot continue to outpace incomes at this rate. It just won’t work.”
