Contact:
Stephanie Giralmo, Public Relations & Media Manager
Master Builders Association of King and Snohomish Counties
p 425.457.7067

FOR IMMEDIATE RELEASE

MBAKS Establishes Two NAHB Student Chapters as Part of Their Emerging Professionals Initiative

BELLEVUE, Wash., October 31, 2022—The Master Builders Association of King and Snohomish Counties (MBAKS) announced today the official establishment of two NAHB Student Chapters in partnership with Edmonds College Construction Management and Seattle College Wood Technology Center. MBAKS will be the first local home building association in Washington state to have active NAHB Student Chapters in 2022.

As part of the Emerging Professionals program, these student chapters will allow participants to become student members of MBAKS, which, in addition to other benefits, provides complimentary access to events and networking opportunities with local building professionals. This program will bring awareness to field-based education, training opportunities and address the urgent need for qualified trade professionals in our industry.

“These NAHB Student Chapters are integral, vital parts of our comprehensive, ground-breaking Emerging Professionals initiative,” said Colby Goodman, MBAKS Director of Membership and Councils. “Additionally, they serve as a testament to the commitment by MBAKS to a meaningful workforce development strategy and the future of the homebuilding trades.”

MBAKS is an active, contributing partner to the BIAW Workforce Development Task Force and is a pioneer, along with other Washington local home building associations, in addressing the need to foster talent for the future of the building industry. Currently, MBAKS has plans to establish two more NAHB Student Chapters with Sno-Isle TECH and Lake Washington Institute of Technology, with the expectation of formalization of those chapters by years’ end.

About MBAKS

Founded in 1909 and headquartered in Bellevue, Washington, the Master Builders Association of King and Snohomish Counties (MBAKS) is the nation’s oldest and largest local homebuilders’ association. Like our founders, our members continue to take a leading role in all facets of homebuilding and support the planning for a growing region. From new technology to advances in sustainability, from collaborative public policy efforts to investing in our communities, our commitment to a thriving, inclusive and well-planned region never wavers. We are the professional homebuilders, architects, remodelers, tradespeople (carpenters, framers, roofers, plumbers, electricians), planners and engineers, suppliers, manufacturers, and sales and marketing professionals in your community who believe everyone deserves access to a healthy and productive place to call home.

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Contact: data@mbaks.com

This month's Builders Bulletin features a new data point, the NAHB/Wells Fargo Housing Market Index (HMI). This is a national and regional indicator that tracks builder perception of current single-family home sales and expectations. It has decreased every month in 2022, reflecting a general bearish outlook towards the housing market amid rising construction costs and high interest rates.

Download this month's report:

Each election cycle, our Affordable Housing Council (AHC) interviews candidates at the city, county, and state levels to determine their degree of support for our industry.

The following candidates have received an AHC endorsement for the 2022 election cycle. 

Ballots are due Tuesday, November 8. Your vote in support of AHC-endorsed candidates will go a long way toward affecting the outcome of these critical races. 

For dropbox locations, ballot questions, and more, visit King County Elections or Snohomish County Elections.

Endorsements as of October 25, 2022.

By MBAKS Content Strategist James Slone

The Black Homeownership Initiative is working to close the homeownership gap.

In 2021, the Coalition for More Housing Choices joined a network of associations and organizations to launch the Black Homeownership Initiative with the goal of closing the gap between Black and white homeownership rates in Washington state.

The Coalition—representing a spectrum of nonprofit, business, civic, and labor organizations, including MBAKS— came together to develop a plan to build enough homes to accommodate regional growth in a way that “benefits current residents” and offers affordable housing choices.

The Black Homeownership Initiative was a natural outgrowth of the Coalition’s approach to housing with its strong focus on equity, seeking to align “infrastructure development, housing production and preservation, and underwriting and lending” to double the Black homeownership rate in the state.

They have their work cut out for them.

Mind the Gap

A history of exclusionary housing policies has meant that people of color and other minorities have been denied the financial equity, stability, and peace of mind that comes with homeownership—the basic building block of the American dream. The Black community has been especially impacted.

According to the Urban Institute, Black homeownership in the U.S. has not increased since the 1960s. Indeed, it’s actually declined 5% since 2011 versus just 1% of white households. These days, affordable housing is scarce for everyone, but for Black households, it’s even more elusive.

The situation is especially dire here in our own backyard. The Seattle Times recently reported that just 34% of Black people statewide own homes (compared to 68% of whites). In Seattle, it’s an abysmal 26%.

It is hardly surprising to learn that the median net worth of Black households in Seattle is just $23,000, compared to $456,000 for white households. Economic inequality means Black households are likelier than whites to spend more than half their income on rent and debt (e.g., student loans).

And even when they can save, their chances of being denied a home loan are much greater. An analysis by Zillow found that Black applicants were denied mortgages at a rate 84% higher than white applicants in 2020.

How did it come to this?

Racism’s Self-Fulfilling Prophecy

Black and other non-white people were kept out of most Seattle neighborhoods in the early twentieth century through zoning and racially restrictive housing covenants. While the U.S. Supreme Court struck down the covenants in 1948, lenders and real estate companies continued to discriminate through “redlining,” a practice of designating communities of color “high risk of default.”

Redlined maps determined which neighborhoods received favorable mortgages, interest rates, and refinancing. The result? Homes in Black communities hemorrhaged value, decent loans became hard to come by, and predatory loans led to defaults. The stigma of redlining also led to a loss of jobs, resources, and investment in these communities as capital—and white residents—fled to the suburbs.

The 1968 Fair Housing Act made racial discrimination illegal, but the resulting gap persists—Black households have less intergenerational wealth to pass on or equity to invest in new housing. While gentrification displaces Black residents, single-family zoning means that more affordable types of housing cannot be built in threequarters of Seattle neighborhoods.

(See “Codifying Prejudice” in the fall 2020 issue of Master Builder.)

Mending the Gap

There are signs that things are changing. Perhaps the most prominent recent example is the Africatown Community Land Trust, which has created affordable housing and cultural spaces in the Central District to mitigate the effects of gentrification and underinvestment in the historic Black community. Another recent initiative spearheaded by the Seattle Foundation’s Civic Commons seeks to help 1,500 Black households become homeowners across the Puget Sound over the next five years.

MBAKS supports the Black Homeownership Initiative because closing the gap is a crucial part of solving the housing crisis in the Puget Sound region—which will need to accommodate 60,000 new residents a year—and because it’s the right thing to do.

The Housing Development Consortium (HDC), which encompasses all major nonprofit housing developers in King County, is a leading partner of the Initiative as part of its mission to “ensure that all people live with dignity in safe, healthy, and affordable homes within communities of opportunity.”

Patience Malaba, executive director of HDC, laid out the stakes last June. “We have decades of racial injustice and economic inequality that has consistently, persistently led to disparities in wealth, specifically for BIPOC [Black, Indigenous, and People of Color] communities and disproportionately for Black households. One of the foundational steps in America to build wealth is homeownership.”

MBAKS’ Senior Policy Analyst, Allison Butcher, agrees. “The association recognizes the need to address race-based housing policies of the past to create a more inclusive future for our region. Part of the solution is creating more attainable housing choices for more people close to jobs, transit, schools, healthcare, and other amenities.”

The Initiative’s plan includes seven interrelated strategies to bolster Black ownership. These include marketing and outreach, pre- and post-purchase counseling, purchase supports and tools, changes in policies and practices, support for existing Black homeowners, and housing production to increase affordable homes.

MBAKS’ role, says Butcher, is “advocacy to enable more infill and more affordable ‘missing middle’ housing.” MBAKS sees increasing housing supply of all types as a key strategy to lowering home prices and barrier of entry for Black households.

Only the Beginning

The Initiative is off to a great start, but there’s still much to be done.

Currently most of the focus is on increasing the supply of and access to affordable homeownership. Looking toward the future, Initiative partners and the HDC hope to develop a policy framework that can be used to monitor and evaluate their collective efforts to increase homeownership opportunities.

Meanwhile, a Washington State Department of Commerceled Homeownership Disparities Work Group has developed recommendations for reducing the gap for BIPOC communities that intersects with the Initiative’s work. The report includes specific statewide recommendations that could be actionable in late 2022 or during the 2023 legislative session, creating additional momentum.

These are heartening developments. Solving the ownership gap means ensuring that everyone can find a home of their own. But to be lasting, it must go beyond up-zoning and legalizing more housing types.

It requires acknowledging the long history of racial discrimination that has narrowed homeownership options for Black people and actively working to overcome its grim legacies. Acknowledging that the gap exists—and why it exists—is an important step.

By MBAKS Senior Policy Analyst Allison Butcher

King County’s August median home price of $815,000 stayed relatively flat compared to the previous month, which was $810,000. Snohomish County saw a month-over-month dip in its median home price of single-family homes and condos—from $737,500 in July to $700,000 in August. Year-over-year prices were up 5.6% in King County and 4.9% in Snohomish County.

Download this month's report:

By MBAKS Content Strategist James Slone

What’s driving up home prices? Supply and Demand.

Pointing out how expensive housing is has become its own genre. How many articles do we really need on hot, hot, hot housing markets? Is there any end in sight for breathless reports on the monthly numbers? Probably not, because even with recent interest rate hikes and some cooling off locally, national home prices are still sky-high.

According to Axios, in 2022, the national median price for existing homes rose above $400,000 for the first time in history. And that’s on the low side for the Puget Sound region. Earlier this year, the median home price neared one million in King County.

As of this writing, a recession lurks on the horizon and a “correction” seems inevitable, but the market is unlikely to crash like it did during the Great Recession. Vast numbers of Americans will remain frozen out of the housing market, and there’s a lot of understandable frustration and blame to go around.

There are a host of interrelated factors that have contributed to these high prices. Let’s take a look at a few.

Shifting Demographic Sands

The story about mass flight from cities to suburbs during COVID lockdowns may have sold online subscriptions, but it wasn’t really true for Seattle. In fact, according to the latest census data, the bulk of our region’s demographic growth over the last few years landed in urbanized King County. Seattle is not dying; it’s running full speed ahead.

Many people are trying to buy homes in popular markets like ours, so demand for limited housing is very high. Robust urban centers remain magnets for young professionals, and families in the millennial cohort have entered the housing market in force. Employers like Amazon mean a high-skilled, high-earning workforce that can afford to buy. It also means a lot of people are priced out.

The Wages of Inequality

Many people were never priced in. Perhaps the biggest barrier to housing in the U.S. is economic inequality. It’s not so much the price of housing itself; it’s that earning power has not kept up. Wages for low- to moderate-income workers have stagnated over the last few decades and now workers have to contend with supply chain disruptions and inflation taking a bite of their paychecks.

With low wages and high costs of living, just making rent means never saving up. As Barron’s reported in February, “full-time workers simply do not earn enough to make a down payment on a home” in many U.S. housing markets—especially after COVID layoffs. On top of this, many historically marginalized people don’t have existing home equity or access to intergenerational wealth, making a down payment on a home insurmountable.

Tales of Investment Capital

The old canard that Wall Street investors are responsible for high prices is wrong, but there is a kernel of truth. As reported by Fortune in June of this year, during the COVID housing boom, investors—tempted by loose capital, low mortgages, and high appreciation— bought up housing at record levels.

In the first quarter of 2022, “investors made up a record 28% of single-family home sales… up from 19% in the first quarter of 2021.” According to a study published by the Harvard Joint Center for Housing Studies earlier this year, this single-family home shopping spree further limited the supply for “potential owner-occupants” like first-time buyers.

In some cases, homes have been taken off the market and turned into rental units. As Forbes has reported, real estate investors and landlords receive large tax breaks for houses that are not available to live-in buyers. This has incentivized taking housing off the market.

Getting High on Supply

It’s not news that COVID led to supply chain disruptions across the entire economy. Perhaps the most notable supply shortage for homebuilders was in the lumber industry. In January, the National Association of Home Builders (NAHB) reported that the rise in lumber prices added $18,000 to the average price of single-family homes. Other materials, such as fixtures and windows, have also been affected by shortages, leading to construction delays and, inevitably, higher prices.

Labor Shortage Shuffle

Ever since the Great Recession, the residential construction industry has had a labor shortage. According to Zonda’s Ali Wolf, writing for MarketWatch, “Many skilled workers left the housing industry permanently as they reskilled and found jobs in other industries perceived to be more stable.”

While the labor market has improved since then, 62% of homebuilders report that they’re still falling short as workers retire or switch careers. The endless search for new employees means spending more money on salaries, recruitment, training, and retention—not to mention costly project delays due to staffing shortages—resulting in higher price tags.

Land and Regulations

Whether you’re a developer or a homebuilder, creating housing is very expensive. In some of the hottest markets—like San Francisco and Seattle—land itself is often in short supply, leading to high land values. As explained by housing developer Benjamin Maritz in “Meeting Great Expectations” in the fall 2021 issue of Master Builder, to break even, developers have to charge more for fewer square feet. And whether you’re buying a house or renting, it means paying more.

Add in regulations like lengthy permitting timelines, expensive tree ordinances, environmental review processes, and other onerous policies, construction becomes a very costly and time-consuming enterprise, reducing supply and passing costs onto homebuyers.

Even policies designed to create affordable housing can produce unintended consequences that stymie it. Seattle’s own inclusionary zoning policy, Mandatory Housing Affordability, slapped fees and floorspace requirements on townhomes, making starter homes ideal for first-time buyers too pricy to build. (See "The High Cost of Regulation" in the summer 2022 issue of Master Builder.)

Supply and Demand

This brings us to the biggest, most general cause of high prices. It’s a stone-cold classic: the law of supply and demand. Simply put, people want homes, and there aren’t enough of them, leading to higher prices. From 2018 to 2020, Bloomberg reports, the U.S. housing shortage increased from 2.5 to nearly 4 million units—and the shortage has only worsened.

According to an analysis by Pew Research published in March, “the number of active housing listings in the U.S. was at its lowest in at least five years in January 2022, with 408,922 active listings on the market,” a 60% drop from 1 million listings in February 2020. Meanwhile, single-family home prices rose from a median of $327,100 in 2019 to $408,100 in late 2021—a 25% leap!

Clearly we need supply. So, where is it?

Twilight Zoning

Along with the aforementioned permitting and environmental review processes, which add time and uncertainty to projects, there is also the dominance of single-family zoning in space-constrained cities like Seattle. You can’t have housing where you can’t build it. Some residents have even used environmental review and public comment to scuttle needed housing.

It’s natural to ask who benefits the most from these policies. In a 2020 report on the housing crisis, Brookings fellow Jenny Schuetz concluded the biggest beneficiaries are not builders, developers, or investors, but existing homeowners who’ve enjoyed a substantial, largely untaxed return on investment and the “political muscle to continue restricting new housing supply.”

The Bottom Line

If there is one takeaway from all this, it’s that there is no one issue to single out. Prices are driven by a complex mix of economic, social, and political factors. But the main driver is lack of supply, and the easiest, most direct way of addressing it is building a lot more housing for all types for all people.

The demand is there; people want housing. It's time to embrace solutions that support increasing supply of homes for current residents, newcomers, and future generations.

The Master Builders Association of King and Snohomish Counties (MBAKS) has proposed several ways to make it easier to build, including streamlining permitting processes, making zoning changes to facilitate more “missing middle” housing choices in our urban areas, and supporting workforce development to encourage people to enter the building trades.

MBAKS also works with policymakers and housing advocates to identify ways to create more affordable housing and offers the Housing Toolkit to help communities pursue policies that create more housing choices. Find out more about what MBAKS is doing.