Affordable housing opens for occupancy on Bellingham's waterfront - Salish Current
April 10, 2024
Affordable housing opens for occupancy on Bellingham’s waterfront
Aria Nguyen
A “rooftop” view from The Millworks in Bellingham’s Waterfront District looks out over a patio and play area, with the historic Whatcom Museum building in the skyline. The recently opened Phase 1 units represent about 10% of what the city needs to provide annually to meet its housing goals. (Courtesy WCF)
April 10, 2024
Affordable housing opens for occupancy on Bellingham’s waterfront
Aria Nguyen

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The Millworks, Phase 1 of an affordable housing project owned and operated by Mercy Housing Northwest on Bellingham’s waterfront, has opened 83 units of workforce and family rental housing.

The two-phased, multiuse development is designed to provide affordable housing and early childhood education, and to strengthen the local food economy. 

The newly opened Phase 1 apartments represent about 10% of the new housing Bellingham needs to provide each year to keep up with its share of state- and countywide needs and stated goals. Most of the residents will be people who are not currently unhoused but were in danger of being priced out of Bellingham’s rental market. Living near jobs and public transportation, with childcare available on site, can help reduce the stressors that diminish quality of life for many local families. 

Projects like these are moves to provide both for projected population growth and for the mismatch between rent increases and wage growth. 

A regulatory framework (and thicket)

The state’s Growth Management Act (GMA) was adopted in 1990 and requires fast-growing cities and counties to create plans to manage their population growth. In 2021, the GMA was amended to incorporate income levels, meaning housing and utilities should not be more than 30% of a household’s income. 

Visitors watch the new building take shape during construction. (Courtesy WCF)

In 2023, the Washington State Department of Commerce projected the state will need 1.1 million homes developed over the next 20 years to keep up with population growth. Over half of these homes need to be affordable for residents at the lowest income levels, according to the agency. Meeting that goal means creating at least 55,000 new housing units per year. Last year, production was 18,000 units short.

For Whatcom County, this equates to a projected housing need of 34,377 over 20 years, based on the plan set by House Bill 1220.

Working toward that target, the county produced 13,000 units per year in the five-year period from 2016 through 2021, said Blake Lyon, director of planning and community development for the City of Bellingham. In that same timeframe, Bellingham produced an average of 644 housing units — about 48% of the county’s total.

Using this same methodology, Lyon said that over the 20-year period Bellingham’s share of the 34,377-unit goal is roughly 16,500, or 825 units per year, based on a spectrum of incomes.

Lyon said that in 2022, about 2,116 affordable housing units were made available. He anticipates that this number — well above the goal of 825 — will vary depending due to permitting and construction processes which may not fall within one calendar year.

Big-picture problems 

Community development planning consultant Paul Schissler works in both urban and rural planning, and currently is focusing on how the community can make housing more affordable for residents. 

“There are only a handful of ways to do it, and we don’t have enough of it going on,” Schissler said.

One of the biggest issues Schissler attributes to housing inaffordability is the commodification of real estate.

It’s “the idea is that land is a commodity, that it’s an investment, and that people have a right to make a profit regardless of people’s ability to pay, even to pay bills … the big change in the system is that the commodification has gotten worse,” he said.

Schissler said that real estate commodification means profit for landlords and capital gains for sellers. But it also means households in Whatcom County are heavily cost-burdened.

Cost burden” can be defined as paying more than 30% of household income for housing (rent or mortgage) and utilities. Severe cost-burden is when people pay 50% more than their household income on housing and utilities.

Research by Construction Coverage shows that from 2023 to 2024 the Bellingham metropolitan area saw a 16.8% increase in rents, with median rents rising from $1,484 to $1,734 — $250 per month more.

 The Mount Vernon-Anacortes metro area saw a nearly identical increase, up 16.0% from $1,614 to $1,872.

By comparison, the Seattle-Tacoma-Bellevue metropolitan area saw a 9.7% increase in median rents, from $2,455 to $2,692.

The City of Bellingham Consolidated Plan Overview found that in Bellingham 24% of homeowners and 56% of renters are cost-burdened, and renters are three times more likely to be cost-burdened than homeowners. This accounts for almost half of Bellingham residents.

Residents have begun moving into new apartments in The Millworks. (Amy Nelson / Salish Current © 2024) 

“So, no wonder people can’t stay here. It’s too expensive,” Schissler said. “The jobs are too hard to get, and even when you get a good job it doesn’t pay.”

The project and Phase 2

Mercy Housing Northwest — one of the nation’s largest affordable nonprofit housing organizations — partnered with the Whatcom Community Foundation (WCF) and other local organizations to develop The Millworks at the 3.3-acre Georgia Pacific redevelopment site — a part of the $44 million cleanup project at the waterfront.

The Port of Bellingham has been engaged in the redevelopment of the Waterfront District since it took over the property from Georgia Pacific in 2005. That redevelopment has involved the cleanup over the initial years, followed by planning, and now implementation of those plans, according to Port Commissioner Michael Shepard.

Shepard said since 2012 there was an expectation that affordable housing would be built into the waterfront. The Port, in communication with the WCF, had the idea of creating a community food kitchen.

“We loved that idea, and some of my feedback back to the community foundation was we definitely see an opportunity here for that type of development, but we have this critical need for affordable housing,” Shepard said.

The idea was retooled into a two-phase project that activates the space with a local foods campus and has integrated multiple phases of affordable housing — the first being The Millworks project, which focuses on the housing needs of families, according to Shepard. 

“It really says a lot about Bellingham and our community values, and the Port’s role in listening to and taking action on some of those community values and putting in the first project to actually open doors,” Shepard said. 

Construction for the project began at the end of 2022, intending to be completed for residence in April of 2024. With construction ahead of schedule, 35 residents are approved for move-in within the coming weeks, said Marui Ingram, CEO and President of WCF.

The Phase 1 units will be permanently affordable for a minimum of 50 years and rent will be measured based on area median income, said Ingram.

“Phase 1 serves folks earning 30%, 50% and 60% of area median income,” she said. There’s [also] a 15-unit set-aside, meaning that 15 of those 83 units are for families that are exiting homelessness. So that is just a huge win, for we have far too many people in this community experiencing [homelessness] already.”

Rent for a one-bedroom at this development would be between $540 and $1,080 depending on income — compared to around $1,500 in the market, Ellen Lohe, associate director for Mercy Housing Northwest wrote in an email provided by Ingram. 

A six-classroom child education center is part of the Phase 1 opening, making play areas vital to the design of The Millworks project. (Courtesy WCF)

“People often think about affordable housing as housing for people who are not working, but that is often not the case,” she said. “Many people who need housing subsidy, and I think most people who understand the cost of housing in this community, also can understand that you can still be working 40 or more hours a week and still not be able to afford a market rate unit in this community.”

At Mercy Housing’s properties, residents will not be asked to leave once they reach a certain income level, Ingram said.

Phase 2 of the project is in the design process — with the goal of construction for the next development to begin in late 2025.

Phase 2 adds about 90 additional workforce housing units to the site, including some that will be available for ownership instead of renting. This part of the development will also add a local food campus. 

The layout includes a food campus on the first floor, the second floor including office spaces for nonprofit organizations — such as WCF itself, the third floor including retail space and a rooftop courtyard and finally above this will be the residential housing units. 

With the food campus, there will be a shared kitchen which would allow multiple producers to create value-added projects — along with a demonstration kitchen for training and larger production space. The goal is to create an efficient business model that will lead to a more resilient community, Ingram said. The production of food within the kitchens could include prepared meals — or soups and stews — that can go out to school districts, food banks, or nursing care and rehabilitation centers. 

“One of the things that we learned during the pandemic was the supply chains, which we still continue to see challenges in within the food sector, those were in some cases just shut down or incredibly curtailed,” Ingram said. “It’s really just looking at how do we make sure that we’ve got enough to help take care of our community during good times and during challenging times.”

Another part of Phase 2 includes the Waterfront District’s energy solution. Phase 2, and other waterfront developments, will connect to the district energy system which utilizes a single energy plant to distribute hot and chilled water through underground pipes to new buildings which, in turn, eliminate the need for individual boilers, furnaces and cooling systems.

Moving toward the long-term

Shepard said there is a clear role for the government to be working and utilizing public resources to build housing when we do not see it coming from the private sector. 

With Phase 1 complete, The Millworks has added 83 new housing units to the city’s inventory and a child education center; Phase 2 will double the housing number and add a food campus. (Courtesy WCF)

“We don’t see the private sector building much housing for those lower- to middle-income individuals. Most of the housing is more of that market rate and above, which is just unaffordable to many members of our community,” he said. 

Lyon named two primary reasons the private sector shies away from affordable housing. One is the administrative responsibilities that come with diving into federal, state or local funding. The other is the responsibility of tracking and monitoring the affordability components.

“For example, you might have to income-verify with prospective tenants [to ensure] that they are eligible to receive that assistance that’s being provided,” he said. “And then there’s an obligation to track that over the life of that unit.”

When building affordable housing is not profitable for the private sector , it falls to the public sector to build affordable housing. There are multiple affordable housing projects developing within the Bellingham community such as the Laurel-Forest Project and Trailview.

For Schissler, political will, policy and implementing policy are the key ingredients to lead to more capacity to create more nonprofit home projects.

But how will the other part of the equation — wages — keep up to make housing affordable?

Shepard said that the Port has an ongoing mission around economic development. “We want to make sure that there are a variety of jobs in the community, good opportunities for employment, and quality wages,” Shepard said. “That’s a part of making sure that folks can afford housing here as well.”

— By Aria Nguyen

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