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2023 01 27 Yelm Housing Needs Analysis DRAFT Housing Needs Assessment Housing Action Plan City of Yelm Prepared For: City of Yelm Prepared By: SCJ Alliance Malissa Paulsen, Planner Dan Penrose, AICP,Principal January 2023 Housing Needs Assessment Project Information Project: Housing Action Plan Prepared for: City of Yelm, Community Development nd 106 2 St SE Yelm, WA 98597 Project Representative Prepared by: SCJ Alliance 8730 Tallon Lane NE Lacey, WA 98516 scjalliance.com 360.352.1465 Contact: Malissa Paulsen Project Reference: SCJ #22-000356 Table of Contents Introduction..........................................................................................................................1 Issue Statement.....................................................................................................................1 Off-Base Military Households................................................................................................1 Community Profile................................................................................................................1 Population and Demographics............................................................................................................2 Household Characteristics...................................................................................................................5 Household Needs and Risk................................................................................................................10 Housing Inventory...............................................................................................................11 Housing Characteristics.....................................................................................................................11 Housing Cost......................................................................................................................................14 Special Housing Inventory.................................................................................................................16 Workforce Profile................................................................................................................17 Land Capacity Analysis.........................................................................................................20 Zoning................................................................................................................................................20 Projected Density and Underdeveloped Land..................................................................................22 Environmental Constraints................................................................................................................25 Gap Analysis........................................................................................................................27 Conclusion...........................................................................................................................31 SCJ AllianceJanuary2022 | Page i List of Tables Table 1. Household Types in Yelm with Regional Comparison (2021) ......................................................... 5 Table 2. JBLM Basic Allowance for Housing for E1 to E5 (2022) ................................................................... 9 Table 3. Olympia-Tumwater Metro Area (Thurston County) 2022 HUD Income Limits ($) ....................... 10 Table 4. Low Income Housing Availability................................................................................................... 16 Table 5. Senior Housing Types Available in Yelm (2022) ............................................................................ 17 Table 6. Industry Growth Projections for Pacific Mountain Workforce Area (2022) ................................. 19 Table 7. Yelm and Thurston County Job Earnings (2019) ........................................................................... 19 Table 8. Yelm Zoning Districts and Density ................................................................................................. 22 Table 9. Residential Density and Projected Capacity for Yelm (2021) ........................................................ 23 Table 10. Estimated New Housing Units Required in Yelm (2045) ............................................................. 29 Table 11. Estimated Housing Units Required in Yelm by Income (2030 - 2045) ........................................ 30 Table 12. Estimated Housing Units Required in Yelm by Type (2030-2045) .............................................. 30 List of Figures Figure 1. Yelm Historic and Future Population (1930 2040) ...................................................................... 2 Figure 2. Thurston County Population (1930 - 2040) ................................................................................... 3 Figure 3. Age Distribution in Yelm (2021) ..................................................................................................... 3 Figure 4. Ethnicity in Yelm (2020) ................................................................................................................. 4 Figure 5. Not Hispanic or Latino Ethnicity in Yelm (2020) ............................................................................ 4 Figure 6. Percentage Households with Own Children under 18 in Yelm (2021)........................................... 5 Figure 7. Regional comparison of Children in Households by Age-range (2021) ......................................... 6 Figure 8. Yelm Household Size with Regional Comparison (2021) ............................................................... 6 Figure 9. Tenure in Yelm (2021) .................................................................................................................... 7 Figure 10. Inflation-Adjusted Yelm Household Income with Regional Comparison (2021) ......................... 7 Figure 11. Inflation-Adjusted Yelm Household Income (2010-2021) ........................................................... 8 Figure 12. Percentage Service Members with Housing Costs over BAH (2020) ........................................... 9 Figure 13. Percentage of Service Members in Off-Base Housing, by Type (2020) ....................................... 9 Figure 14. Household Incomes in Yelm (2019) ........................................................................................... 10 Figure 15. Cost-Burdened Households in Yelm (2019) ............................................................................... 11 Figure 16. Housing Units in Yelm (2010-2021) ........................................................................................... 12 Figure 17. Yelm Residential Permit Activity (2014-2021) ........................................................................... 12 Figure 18. Units in Structure, Yelm (2021) .................................................................................................. 13 Figure 19. Housing Units by Number of Bedrooms (2021) ......................................................................... 13 Figure 20. Age of Housing in Yelm (2021) ................................................................................................... 14 SCJ Alliance January 2022 | Page ii Figure 21. Median Sales Price vs Number of Sold Houses in Yelm (2012-2022) ........................................ 15 Figure 22. Inflation-Adjusted Median Gross Rent in Yelm with Regional Comparison (2010-2021) .......... 15 Figure 23. Change in Rent, Home Value, and Income in Yelm (2014-2021) ............................................... 16 Figure 24. Job Density in Yelm (2019) ......................................................................................................... 17 Figure 25. Top Industries in Yelm, 2019 ...................................................................................................... 18 Figure 26. Commuting Patterns in Yelm (2019) .......................................................................................... 20 Figure 27. City of Yelm Zoning (2022) ......................................................................................................... 21 Figure 28. Future Residential Development Potential (2017) .................................................................... 23 Figure 29. Projected Housing Density for Yelm (2017) ............................................................................... 24 Figure 30. Water-based Environmental Constraints in Yelm (2022) .......................................................... 26 Figure 31. Mazama Pocket Gopher Areas (2022) ....................................................................................... 27 Figure 32. Renter Households and Affordable Rental Units by Income in Yelm (2021) ............................. 28 Figure 33. Owner Households and Affordable Housing Units in Yelm (2021) ............................................ 29 List of Appendices Appendix 1 City of Yelm Zoning Map Appendix 2 Future Residential Potential Map (2017) Appendix 3 Water-based Environmental Constraints in Yelm (2022) SCJ Alliance January 2022 | Page iii Introduction A Housing Needs Assessment (HNA) is a tool for communities to understand the way that their unique demographics, housing stock, economy, and available land determine current and future housing needs. By analyzing each of these components, the HNA can show important gaps between the housing needs of residents and the available housing in a community. Once these gaps have been identified, a plan for mitigating them to ensure access to housing for all economic and demographic segments of a community can be developed. Issue Statement Yelm is a predominately white, military-based, community of 10,205 people with unique housing needs and challenges stemming from its military-personnel economy and demographics. Yelm faces an exponential growth projection, leading to a need for higher density and additional new housing units to balance the supply and demand of housing stock as the city grows. Off-Base Military Households Joint Base Lewis-McChord (JBLM) is situated just north of the City, and heavily influences the population ires consideration of JBLM staffing levels, housing demand and any anticipated transitioning of military personnel to civilian life, according to the 2020 JBLM Off-Installation Housing Study. As a part of this requirement, and in recognition of the increase in housing demand due to military personnel living off the installation, this assessment separates out military households in an effort to better understand future needs of the Military households are discussed in further detail in this assessment under Off- Base Military Households. Community Profile The Community Profile discusses Yelm ds, as well as households with specific needs and risks, including cost-burdened households. These demographic and household characteristics provide background and context for the types of housing required to better serve all Yelm SCJ Alliance December 2022 | Page 1 Population and Demographics Historic and Future Population Figure 1.YelmHistoric and Future Population (19302040) 30,000 25,000 20,000 15,000 10,000 5,000 0 193019401950196019701980199020002010202020302040 Source: Washington Office of Financial Management (OFM), TRPC Population Forecast Allocations The City of Yelmwas incorporated in 1924and the 1930Census showed a population of 384people. The population remained below 1,000 until the 1980s when it began to grow rapidly, as shown in Figure 1, with a689% increase from1980to2020, an annual growth rate of 17 percent.Currently, the population sits around 10,250, with rapid growth projected into 2030and 2040.This amounts to an estimated population growth of just under 24,000residentsby 2040. Washingtons Office of Financial Management (OFM) uses the Housing Unit Method to estimate estimated from change in housing since last census. Average person per house (PPH) and occupancy rates applies to updated housing by type of housing (i.e. single family, duplexes, 3- Population in Group Quarters facilities such as prisons, mental hospitals, and nursinghomes, is Management). To estimate the future population for the November 2022 data release, OFM looked at Migration, Natural Increase, COVID mortality, and other components of population change. SCJ AllianceDecember 2022 | Page 2 Figure 2.ThurstonCounty Population (1930-2040) 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 193019401950196019701980199020002010202020302040 Source: Washington Office of Financial Management (OFM) s staffing due to the proximity of the bases East Gate to State Route 507. Figure 2 shows a steady historic increase in the County population, though there is a small, accelerated uptick in 1980 which mirrors the growth within the City of Yelm. AgeandRace/Ethnicity Figure 3. Age Distribution in Yelm (2021) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% WashingtonThurston CountyCity of Yelm Under 18 years18 to 24 years25 to 29 years30 to 39 years 40 to 49 years50 to 59 years60 to 69 years70 and older Source: 2021American Community Survey (ACS) 5-year Estimates, Table S0101 The population of Yelmis significantly younger than ThurstonCounty or Statewide demographics show. Almostone out of every three residents are under 18 years oldand 81% of the populationisunder 49 SCJ AllianceDecember 2022 | Page 3 years of age. Yelm also has a smaller percentage of individuals 50 years or older, with 18.8% of the population compared to the County and State, at 36.2% and 34.2% respectively. Reflected in Figure 3, the high number offamilies(as discussed further in the Household Characteristics section below) and proximity to JBLM combine for a statistically youngerpopulation which has important implications for housing needs in the City. Figure 4. Ethnicity in Yelm(2020) 100% 90% 80% 70% 60% 86% 88% 90% 50% 40% 30% 20% 10% 14% 12% 10% 0% WashingtonThurston CountyYelm Hispanic or LatinoNot Hispanic or Latino Source: 2020 Decennial Census, Table P2, 2020 U.S. Census Figure 5. Not Hispanic or Latino Ethnicityin Yelm(2020) 1.04% White alone 2.25% 9.21% 3.48% Black or African American alone 1.54% American Indian and Alaska Native alone 3.22% Asian alone Native Hawaiian an Othe Pacific Islander alone 67.26% Some other Race alone Two or more races Source: 2020 Decennial Census, Table P2, 2020 U.S. Census As shown in Figures 4 and-Hispanic, with approximately two- thirds of the population identifying as non-Hispanic white. Hispanic/Latino residents make up around 12% of the population. SCJ AllianceDecember 2022 | Page 4 Household Characteristics Household Size, Type, and Tenure can be comprised of any combination of related family members, unrelated people, or individuals. The 2020 American Community Survey estimated 2,900households in Yelm. Table 1. Household Typesin Yelmwith Regional Comparison(2021) Household TypeCity of YelmThurston County TotalPercentTotalPercent Total Households3,166100%114,556100% Family Households2,51579.4%75,62166.0% Married-couple family1,92560.8%58,37651.0% Other family59018.6%17,24515.1% Nonfamily Households65120.6%38,93534.0% Householder living alone54517.2%29,14125.4% Householder 65 years and over00%1,1041.0% Source: 2021American Community Survey (ACS) 5-Year Estimates, Table S2501 As shown above in Table 1, a majority of households in Yelm are family households withapproximately 76% of those being married coupleswho manage the household, who may or may not haverelated or unrelated children. This overall age demographics as seen previously in Figure 3 and discussed below. Figure 6. Percentage Households with Own Children under 18 in Yelm(2021) Yelm Thurston County 0%5%10%15%20%25%30%35%40%45%50% Source: 2021American Community Survey (ACS) 5-Year Estimates, Table S2501. Reflected in Figure 6,above,nearly half of Yelmhave children under the age of 18in their household. This is more than 20%higher than the Countywide percentage, coinciding with the data presented in Table 1 showing a large percentage of family householdsin Yelm. SCJ AllianceDecember 2022 | Page 5 Additionally, Yelm has a larger percentage of very young families (families with one or more children under the age of 6). With more than double the County percentage of children under 6, young families typicallyface aburden of having a one-income Figure 7. Regional comparison of Children in household or high childcare costsin addition to Households by Age-range(2021) housing expenses(Figure 7, left). 40% Yelm1American 35% Community Survey (Table S1101) states thatthe 30% average family sizeis 3.63compared to 3.08for 25% 22.0% Thurston County. 20% Renter-occupied housing also has a higher rate 15% 16.7% of multiple occupants per roomascompared to 10% owner-occupied housing (8.0% vs. 0.6%, 13.5% respectively). Households averaging more than 5% 6.4% one occupant per room are considered 0% overcrowded, meaningthat renters are in Thurston CountyYelm smaller housing unitsthan what may be Under 6 years only6 to 17 years only desired. Source: 2021American Community Survey (ACS) 5-Year Estimates, Table S2501 sizes are much larger, as reflected in Figure 8, with 56% of households comprised of three or more people, compared to 38% statewide. Conversely, only 17% of households in Yelm are one-person households. Given the data on non-family households and occupants per room discussed previously, family households made up of 3 to 4-or more persons. In these households, the house is typically maintained by a married couple who have young children. Figure 8. YelmHousehold Sizewith Regional Comparison(2021) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% WashingtonThurston CountyYelm 1-person household2-person household3-person household4-or-more-person household Source: Source: 2021American Community Survey(ACS)5-Year Estimates, Table S2501 SCJ AllianceDecember 2022 | Page 6 As compared to Thurston County, data for Yelm show the tenure isfairlyaverage, where approximately two-thirds of the population own and occupy their homes, and the remaining third rent, as reflected in Figure 9. Military households have been known to purchase homes when they move stations to ensure equity in the housing market. This is also typical because military personnel receive a monthly housing stipend, discussedfurther in theOff-Base Military Households section of this report. Figure 9. Tenure in Yelm(2021) 100% 90% 32.3% 33.2% 80% 70% 60% 50% 40% 67.7% 66.8% 30% 20% 10% 0% Thurston CountyYelm Owner-occupied housing unitsRenter-occupied housing units Source: 2021American Community Survey(ACS)5-Year Estimates, Table S2501 Household Income TheMedian Household Income (MHI)in Yelmis $83,027. When adjusted for inflation, this represents a 50% increase between 2010 and 2021.While this is similar to County and Statewide incomes, the MHI in Yelm increasedat a faster rate than that of the County over this time period by more than 16%. Renters earnedsignificantly less than homeowners in Yelm. When analyzed separately, the MHI for homeowners in 2021 was $92,519 compared to $48,634 for renters almost $44,000 less, annually. Figure 10. Inflation-Adjusted YelmHousehold Income with Regional Comparison (2021) $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $- WashingtonThurston CountyYelm 201020202021 Source: 2010, 2020, 2021American Community Survey(ACS)5-Year Estimates, Table S2503 SCJ AllianceDecember 2022 | Page 7 While there has been an overall increasein MHI over the past decade, Yelm initially decreased between 2010 and 2014before climbing steadilyfrom 2015to 2021. This previous decline may beattributed to the 2008 recessionwhich causedthe number of available employment opportunities to decline. Figure 11. Inflation-Adjusted YelmHousehold Income (2010-2021) $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $- 201020112012201320142015201620172018201920202021 Household IncomeLinear (Household Income) Source: 2010-2021American Community Survey(ACS)5-Year Estimates, Table S2503 Off-Base Military Households According to the Joint Base Lewis-McChord (JBLM) Off-Installation Housing Study, conducted by the South Sound Military & Communities Partnership in 2020, the region surrounding the military base is experiencing a shortage of housing stock. The biggest concerns for service members when considering housing, are quality, availability, and location. Affordability is not as large of a concern because service members are providedwhat is known asa Basic Allowance for Housing(BAH). This is an allowance provided by the government to contracted military personnel to offset the cost of housing when the service members do not receive government-provided housing (on-base housing). The allowance amounts do vary, but typically range from $1,578 $2,664 Own without dependents, and an additional $141 $639 with dependents. 26% -readiness goals require that Rent service members be at their post within a 30-minute notice; because of this, housing costs rise,and availability decreases within this boundary. 74% These impacts on the housing market are exacerbated when service membersfirstarrive at JBLM, as the typical time they have to secure housing is around 10 days. Additionally, most service members live off- base (75%), and 74% of survey respondents rent versus purchase a home. More than half of the respondents were with the E1 to E5 rank, andwere married(82%), with a child or children in the household(53%). SCJ AllianceDecember 2022 | Page 8 Table 2. JBLM Basic Allowance for Housing for E1 to E5 (2022) Basic Allowance for Housing RankTitle No DependentsDependents E1Private$1,578$2,034 E2Private 2nd Class$1,578$2,034 E3Private First Class$1,578$2,034 E4Corporal or Specialist$1,578$2,034 E5Sergeant$1,764$2,205 Source: 2022 Department of Defense Travel Allowances, BAH Rate Lookup Figure 12. PercentageService Members with Housing Costs over BAH (2020) 0%10%20%30%40%50%60%70%80%90%100% $0 to $249$250 to $500More than $500Not Applicable Source: 2020 JBLM Off-Installation Housing Study, Pg.24 & Pg. 29; Chart: SCJ Alliance The JBLM Off-Installation Housing Study indicates that service membersgenerallytry to find housing that allows their total costs (rent/mortgage and utilities) to be paid entirely by the BAH. Table 2, above, shows the allowance listed for service members with the E1 through E5 rank. These service members are typically looking for apartments or single-family homes that they can own or rent, for less than $1,578to $2,205, a month. As shown in Figure 12, most of these households paymore thanwhatthe BAH covers, with some spending an additional $500 or more a month to live in the vicinity of JBLM. Figure 13. Percentage of Service Members in Off-Base Housing, by Type(2020) Duplexes or Other Apartments Single-family House 0%10%20%30%40%50%60% Source: 2020 JBLM Off-Installation Housing Study, Pg. 29; Chart: SCJ Alliance SCJ AllianceDecember 2022 | Page 9 As part of the service member survey conducted for the JBLM Off-Installation Housing Study, service members were asked what type of housing they reside in. Two-thirds of the respondents lived in apartments or other type of multi-family residential unit, with the remaining one-third in single-family residences. Household Needs and Risk Low-Income and Cost-Burdened Households The U.S.Department of Housing and Urban Development (HUD) calculates income thresholds to determine eligibility for subsidized affordable housing units.The thresholds are calculated for Metropolitan Statistical Areas (MSA), in this case the area encompassing Olympia-Tumwater, WA, to includeparts of ThurstonCounty. TheFY 2022 MedianFamily Incomewas $103,500,according to HUD, however the 2021 American Community Survey (ACS) lists Yelm. Table 3 shows the 2022 ThurstonCounty HUD Income Limits for low, very low, and extremely low-income households making 80%, 50%, and 30% of the AMI, respectively. Table 3. Olympia-Tumwater Metro Area(ThurstonCounty)2022HUD Income Limits ($) 1-person 2-person 3-person 4-person 5-person Household Income Level householdhouseholdhouseholdhouseholdhousehold Extremely Low Income (30% AMI)21,20024,20027,25030,25032,700 Very Low Income (50% AMI)35,35040,40045,45050,45054,500 Low Income (80% AMI)56,50064,60072,65080,70087,200 Source: HUD Figure 14 shows a breakdown of Yelm42% of Yelmhouseholds are earning less than 80% AMI, a common threshold for subsidized housing eligibility. As discussed previously, renters earn overall lower incomes than homeowners, with 61% of rental households earning under 80% AMI compared with 33% of ownership households, and over four-times as many rental households earning under 30% AMI as ownership households. 8 program; however,students and individuals under the age of 24 do not typically qualify for assistance. Figure 14. Household Incomes in Yelm(2019) All Households Owners Renters 0%10%20%30%40%50%60%70%80%90%100% 30-50% AMI50-80% AMI80-100% AMI>100% AMI SCJ AllianceDecember 2022 | Page 10 Source: HUD Comprehensive Housing Affordability Strategy (CHAS) In addition to income, HUD uses -monthly income - 50% of its monthly income on housing costs. Figure 15shows that Yelm-burdened households are also those earning the lowest incomes. The majority of households earning less than 30% AMI are also severely cost-burdened. Overall, nearly 30% of Yelm-burdened. These households can face difficult choices between prioritizing spending on housing and other household needs such as food and health care. Figure 15. Cost-Burdened Households in Yelm(2019) >100% AMI 80-100% AMI 50-80% AMI 30-50% AMI 02004006008001,0001,200 Severely Cost-Burdened (>50%)Cost-Burdened (30-50%)Not Cost Burdened Source: HUD Comprehensive Housing Affordability Strategy (CHAS) Housing Inventory This section discusses the type and age of s existing housing stock, current and future housing production, and trends in ownership and rental housing costs in the City. It also identifies special housing types in Yelm, including subsidized affordableunits and senior housing. An inventory of the existing housing creates a baseline for future planning and identifiesimportant trends. Housing Characteristics Housing Units, Production and Vacancy Rates The 2021ACS count of housing units in Yelmwas 3,264of which 3,166were occupied. As shown in Figure 16, the total number of housing units in Yelmhas risen steadily and in tandem with the number of occupied units. Yelmhas done well in providing for housing needs over the last decade, averaging 99 unitsper yearsince 2010, with an increase of 107additional occupied units per year. These statistics show that demand for housing remains strong and despite thepace of new residential units being broughtinto the market, Yelms available housing inventory is starting to get tight. SCJ AllianceDecember 2022 | Page 11 Figure 16. Housing Units in Yelm(2010-2021) 3500 3000 2500 2000 1500 1000 500 0 201020112012201320142015201620172018201920202021 Total housing unitsOccupied housing unitsVacant housing units Source: 2010-2021American Community Survey(ACS)5-YearEstimates, Table DP04 Data from the 2021ACS (U.S. Census, Table S2504)shows that most of the occupied units in the cityare detached single-family homes, occupied by both owners and renters. Homeowners mostly live in single- family homes, with a smaller portion in mobile homes, and renters primarily live in apartment buildings (not including duplexes, triplexes, or quadplexes). Figure 17breaks down recent construction between single-family and multi-family unitsas reported by City of Yelm Community Development.The figure considers development per unit and not per structure, therefore multi-family will typically always show higher permit activity with any constructionwhen compared to development of single-familyhomes.The figure shows projections associated with current permits under review and likely to be approved prior to the end of FY 2022. Figure 17. YelmResidential Permit Activity (2014-2021) 350 300 250 200 150 100 50 0 2019202020212022 Single Family StructuresMulti-family structures Source: City of Yelm Beginning in 2020, permit activity for development of single-family structures in the City of Yelm started to slowly increase,which coincides with the development of the Master Planned Community(MPC)in the East side of the city. This planned community has an anticipated1000+ residential units and has movedforward in tandem with the increased housing demand. While a large majority of the MPC is planned single-isalso SCJ AllianceDecember 2022 | Page 12 required to construct multi-family residence the Washington State Growth Management Act (GMA) by encouraging a variety of different housing types within city limits. Type,Size, and Age of Units Yelmsingle-family homes, as shown in Figure 18, making up more than 77% of the total stock.A majority of the remaining 23% are apartment buildings with 20or more units,along with a smaller share of 5-to-9-unit apartments, duplexes, triplexes, and quadplexes. This housing mix reflects the growth of thefamily-oriented military population asdiscussed in the Household Characteristicssectionof this report, and its demand on the housing market. Figure 18. Units in Structure, Yelm(2021) Figure 19, below, helps to displaythe Mobile home 20 or more size of residential units within Yelm. 10 to 19 2.7% units 6.2% This is an important consideration units 5 to 9 units 2.6% because unit size helps to assess how 5.8% well the housing stock meets the needs of the community. In this case, a 3 to 4 units majority of the housing stock is 2.5% comprised of unitswith at least 3 to 4 2 units bedrooms. With the average household 0.0% size for Yelm at3.22persons per unit, this means that Yelm does not have an 1-unit, attached issue of overcrowdingwithin the 2.7% 1-unit, predominatesingle-family residential detached structures.Overcrowding is determined 77.5% if an average household has more than one occupant per room. Source: 2021American Community Survey(ACS)5-Year Estimates, Table DP04 Figure 19. Housing Units by Number of Bedrooms(2021) 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% No bedroom1 bedroom2 bedrooms3 bedrooms4 bedrooms5 or more bedrooms SCJ AllianceDecember 2022 | Page 13 Source: 2021American Community Survey(ACS)5-Year Estimates, Table DP04 The housing in Yelm is relatively evenly distributed between older and newer structures, as shown in Figure 20. Just over16% of the residential buildings in Yelm are considered historic, meaning they were built more than 50 years ago. Though this is significantly less thanthe Thurston County region, this is likely due to the more recent growth and population boom in the 1990s.Older buildings may contain lead paint and present ongoing maintenance problems, andolder housing stock can also provide a source of naturally occurring affordable housing unitsas they are smaller and often more centrally located to existing centers served by transit and commercial services. There is also a larger share of buildings constructed since 2000. Figure 20. Age of Housing in Yelm(2021) 100% 1959 or earlier 1960 to 1969 80% 1970 to 1979 60% 1980 to 1989 40% 1990 to 1999 20% 2000 to 2009 0% 2010 or later WashingtonThurston CountyYelm Source: 2021American Community Survey(ACS)5-Year Estimates, Table DP04 Housing Cost Both rental and homebuying costs have increased in price over the past decade, and sales prices have increased particularly fast since the onset of the COVID-19 pandemic. Figure 21 shows Yelm sales prices over the past decade. Overall, the trendline shows a steady increase in housing cost with a noticeable stagnation in 2020 and then acceleration upward in January 2021. Index, which estimates the typical home value for a region, estimates the cost to purchase a home in Yelmat $456,043as of July 2022. SCJ AllianceDecember 2022 | Page 14 Figure 21. Median Sales Price vs Number of Sold Houses in Yelm(2012-2022) $500,000600 $450,000 500 $400,000 $350,000 400 $300,000 $250,000300 $200,000 200 $150,000 $100,000 100 $50,000 $-0 20122013201420152016201720182019202020212022 # Homes SoldMedian Sale Price Source: Rent cost is significantly more difficult to track, particularly for smaller geographies. Census data on rents is both delayed and self-reported and large real-estate websites do not track rent costs well for smaller communities. However, the Census data can provide a window into larger trends. In Yelm, rent costs are broadly similar tothose inThurstonCounty as a whole and have been increasing at a similar rate. Both County and City rent costs have not increased as quickly as they haveStatewide,asshown in Figure 22. The 2020 ACS reports the Median Gross Rent in Yelmto be $856, with an increase of 35% since 2010. Figure 22. Inflation-Adjusted Median Gross Rent in Yelmwith Regional Comparison (2010-2021) $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 201020112012201320142015201620172018201920202021 YelmThurston CountyWashington Source: 2010-2021American Community Survey(ACS)5-Year Estimates, Table DP04 Comparing rent prices, home prices, and incomes can provide a window into better understanding housing affordabilityin the community. Figure 23 takes 2014as a baseline year and shows the change in each indicator over a 7-yearperiod. After a brief dip in home values and income between 2014and 2015 home values soaredattwicethe rate of Median Household Income, while the cost of rent fluctuated but stayed under 5%annualincrease over the past decade. In 2017, Income and Home Values stayed steady as the cost of rent decreased. This brief decline in rent is likely due to an anomaly in the data, as median values can fluctuate greatly in a small market. Housing affordability and availability are also affecting SCJ AllianceDecember 2022 | Page 15 communities across ThurstonCounty, as demonstrated by the University of Washington Center for Real Estate Research that shows the countywide Housing Affordability Index (HAI) falling since 2020. Figure 23. Change in Rent, Home Value, and Income in Yelm(2014-2021) 40% 30% 20% 10% 0% 20142015201620172018201920202021 -10% -20% -30% Median Gross RentMedian Home ValueMedian Household Income Source: 2014 -2021American Community Survey 5-Year Estimates, Tables S2503,DP04, Zillow Special Housing Inventory Special Housing Inventory includes Group Homes and Care Facilities, Income-Restricted Housing, and Senior Housing options. According to the 2020 Decennial Census there were no members of the population identified as residing in an institutionalized facilitywithin the City of Yelm. Income-Restricted Housing Income-restricted housing includes complexes and apartment communities that provide affordable housing options for low-income families, elderly, or developmentally delayed individuals. The reduction of cost to the renter is typically provided through subsidies paid to the complex or community by both local and federal government agencies. Table 4. Low Income Housing Availability Total Low-Income UnitsAssistance Type Low Income Housing Killion Court (Killion Court)2018 Rent Assisted Prairie Run Apartments (Mountain View Rd)3112 Rent Assisted Income Based Salmon Run Apartments (Vancil Rd)39 Housing Choice Voucher Preservation Portfolio (Killion Court)106Housing Choice Voucher Subsidized Rainier Apartments (Edward Street) 44 21 Rent Assisted Orchard Apartments (McKenzie Ave SW) 32Subsidized Krislen Apartments (Cullens Rd SE) -Subsidized2055+ Subsidized Source: HUD LIHTC Database, Affordable Housing Online, PolicyMap, HelloSection8 SCJ AllianceDecember 2022 | Page 16 Senior Housing There are multiple types of senior housing, typically assessed at the different stages of care that a senior citizen may need. These types include senior living community (independent living), assisted living, memory care, and rehabilitation or skilled nursing. There is some overlap between levels, and this should be considered in the unit types for the facilities listed below. Table 5. Senior Housing Types Available in Yelm (2022) Unit types Senior Housing Prestige Senior Living Rosemont (Killion Rd SE) Independent Living | Assisted Living Easthaven Villa (Cullens St NW) Assisted Living | Memory Care Krislen Apartments (Cullens Rd SE) - Subsidized Senior Living Community Source: Affordable Housing Online Workforce Profile Understanding workforce and employment trends is essential for housing planning. economy, location, and housing shortage have negative impacts on its economic health. Understanding the an provide better opportunities for economic development and access to jobs in the future. Figure 24. Job Density in Yelm (2019) Source: Census OnTheMap SCJ Alliance December 2022 | Page 17 Job density is concentrated near the downtown core and along Yelm Avenue (E/W) where the commercial and Central Business District are primarily located, as shown in Figure 24. There are two other hotspots of job density: the Walmart Supercenter at the southeast of the city along SR 507, and the Master Planned Community to the east. Much of the Master Planned Community has not yet been developed,but as part of the development process,small commercial units are required, and there are some home-basedbusinesses registered in the residential community. Figure 25. Top Industries in Yelm, 2019 900 800 700 600 500 400 300 200 100 0 Jobs in YelmWorkers in Yelm Source: Census OnTheMap Within Yelm, theschool district,retail,and foodindustriesaccount for a large share of the jobs, as shown in Figure 25. As the population grows, the number of children in the area will grow and all three industries are expected to expand with the increased demand and educational needs. School Districts are dependent on taxes and levies for funding which will naturally see an increase with the growth of the population. SCJ AllianceDecember 2022 | Page 18 Employment Projections According to the Washington State Employment Security Department (ESD), which provides regional employment projections, the Pacific Mountain workforce area (which encompasses Grays Harbor, Lewis, Mason, Pacific and Thurston Counties) will see annual growth of 2% between 2020 and 2025, which will taper to 1.64% annually by 2030. These projections are based on staffing patterns from occupational employment statistic surveys and converted to industry classifications based on industry control totals (ICT) definitions. Projections for the top industries in the City of Yelm are shown below in Table 6. Table 6. Industry Growth Projections for Pacific Mountain Workforce Area (2022) Growth Projections Industry Title 2020 2025 2025 - 2030 Construction 2.23% 1.68% Retail Trade 1.55% 1.11% Professional, Scientific and Technical Services 3.13% 2.24% Educational Services 2.62% 2.31% Health Care and Social Assistance 2.10% 2.24% Accommodation and Food Services 6.55% 1.59% Source: 2022 Employment Security Department Industry Projections Jobs in Yelm pay less than jobs in Thurston County as a whole, with 22% of jobs paying $1,250 a month or less in the City, as shown in Table 7. There are a significant number of residents and employees in Yelm earning less than $3,333 per month. If these earners were the sole providers for their household they would be at risk of being housing cost-burdened based on the rent estimates discussed earlier in this analysis. Table 7. Yelm and Thurston County Job Earnings (2019) Jobs in Jobs in Jobs Worked by Yelm Yelm Residents Thurston County Earnings $1,250 per month or less 21.9% 19.5% 16.7% $1,251 to $3,333 per month 40.2% 33.4% 28.3% More than $3,333 per month 38.0% 47.1% 55.0% Source: Census OnTheMap SCJ Alliance December 2022 | Page 19 Figure 26. Commuting Patterns in Yelm (2019) Source: Census OnTheMap opportunities. The majority of residents in Yelm do not work in the City, and vice versa, as shown in Figure 26. Just 5% of city residents work within the city. A slightly larger number of people travel to Yelm for work compared to the number of residents who drive to their workplace from Yelm. According to community members interviewed by SCJ Alliance in the Fall of 2022, the school system is the largest employer within the city limits, and most of the school faculty and staff live outside the district and drive to Yelm due to housing affordability and availability concerns. Land Capacity Analysis This section analyzes existing and potential capacity for housing production based on current zoning code and correlates the results with the number of housing units the City will need based on population and household forecasts. This section also discusses other opportunities and constraints to development, including availability of water, sewer, and other municipal services, environmental constraints, zoning, and other factors. Zoning The City of Yelm is 3,642 acres (5.69 square miles) not including the UGA, and a large portion of the land within city limits is designated Master Planned Community (MPC) for residential units. While the land designated for the MPC is considered developable, the development will be implemented in steps as the City grows and demand for housing grows. SCJ Alliance December 2022 | Page 20 Figure 27. City of Yelm Zoning (2022) Source: Esri, City of Yelm four commercial and three residential districts, not including the Master Planned Community as shown in Figure 29, in light blue. The C(CBD) covers Yelm area, to provide a pedestrian shopping atmosphere and to promote the rehabilitation of existing downtown core stays vibrant and walkable with a variety of commercial offerings such as retail stores, service-oriented establishments, and apartments with other residential uses allowed provided development occurs on existing lots that are one acre or less. Single-family residential development has the most stringent standards within the CBD, while allowed, the uses lean toward a preference of commercial and medium to high-density development, which promotes walkability and pedestrian safety. SCJ Alliance December 2022 | Page 21 Table 8. Yelm Zoning Districts and Density Zoning District Residential Density (per net acre) Commercial CBD Commercial Business District 20-32 1 C-1 Commercial District 32 1 C-2 Heavy Commercial Zone 32 1 C-3 Large Lot Commercial District 32 Industrial I Industrial Residential R-4 Low-Density Residential 4 2 R-6 Moderate Density Residential 3-6 2 R-16 High-Density Residential 8-16 1 Subject to R-16 development standards. Apartments shall represent no more than 66.6 percent of a mixed use development. At least 30 percent of the commercial component must be constructed prior to completion of residential component, providing that adequate infrastructure is constructed for remaining commercial component. 2 Density bonus available for townhouse and planned residential developments. Source: City of Yelm Table 8 identifies the density allowed by current zoning regulations within the City per zoning district. Controlling density allowances in residential areas helps to control the type of housing and therefore supply. Not all types of housing are similar; typically, higher density equals lower housing cost. This is a general rule for the housing market, but not always accurate as there are also different styles such as luxury apartments, which will have more room and a better view, or low-income housing, for which developers typically apply for the Low-Income Housing Tax Credit (LIHTC) through the Department of Housing and Urban Development (HUD) or other applicable tax credit or loan programs. Projected Density and Underdeveloped Land According to the Thurston Regional Planning Council, in 2020, Yelm had a residential capacity of 2,240 units with an additional 5,730 units within the Master Planned Community (MPC). The Urban Growth Area (UGA) has a residential capacity of an additional 660 units. residential units continues to fluctuate, the numbers above reflect subdividable and developable land within the City of Yelm and its UGA using the zoning code as active in 2020. In 2022, City staff altered the density allowance in the Central Business District (CBD), to require development to meet a minimum density standard of 20 units per net acre. While this change did not likely affect the residential capacity, it should help to promote density growth within the downtown core. SCJ Alliance December 2022 | Page 22 Table 9. Residential Density and Projected Capacity for Yelm (2021) Source: Thurston Regional Planning Council While Figure 28 reflects development potential from 2017, the mapping can still be used as a guide to better understand the areas within the City and its UGA that have potential. This map was created by development based on parcel size, zoning, current use, and environmental constraints. The map below shows minimal residential capacity within the core of the city, with and increase near city limits. The Master Planned Community, mentioned above and reflected in tan below holds the most development potential/capacity. Figure 28. Future Residential Development Potential (2017) Source: Thurston Regional Planning Council SCJ Alliance December 2022 | Page 23 The Thurston Regional Planning Council provides insight into future housing density hotspots, or areas where there will be a higher density of people living in the future. Figure 29 shows the Residential Density projected for 2045, where the density is altered the eastern portion of the city where the R-6 and R-16 districts are to the Master Planned Community in the western portion of Yelm. Figure 29. Projected Housing Density for Yelm (2017) 2017 2045 Source: Thurston Regional Planning Council SCJ Alliance December 2022 | Page 24 The above mapping does not take into consideration some constraints on development including water availability, creeks and potential Mazama Pocket Gopher Habitat. Residential capacity expansion is projected, but not likely to reach stated levels in the most western portion of Yelm due to environmental considerations, and economic and infrastructure needs of the city. The projections also do not take into consideration the rate of development or changes resulting from future zoning regulations. Environmental Constraints While the recreational opportunities within and surrounding Yelm are plentiful, this also means that there are constraints to development that must be taken into account. Environmental regulations are Critical Areas and Resource Lands (Chapter 18.21), the State Environmental Policy Act (Chapter 18.20), Environmental Review and Permitting (Chapter 18.11) and Environmental Performance Standards (Chapter 18.51). Critical Areas Yelm defines a critical area to Wetlands (and their buffers), Critical aquifer recharge areas, Frequently flooded areas, Geologically hazardous areas and Fish and wildlife habitat conservation areas. There are streams that run through the City of Yelm, and while they are protected to some extent, they do not fall under Shoreline Jurisdiction (Shoreline Management Act). Development within a critical area or its buffer requires an environmental review, including a critical area report to evaluate the proposal and all probable impacts to the critical area(s). Streams, Floodplains and Wetlands Yelm has three mapped streams that course through the city or along its boundary - the Centralia Canal, Yelm Creek, and Thompson Creek. Proposed development within proximity of these streams is regulated by the Critical Areas and Resource Lands chapter of the Yelm Municipal Code. limits. Most of the zoning near the canal is Low Density Residential (R-4). Most of the parcels in city jurisdiction that border the canal are already developed. The Centralia Canal is part of a diversion dam off the Nisqually River built in 1929, which is a hydroelectric project owned and operated by the City of Centralia (City of Centralia, Yelm Hydroproject). Yelm Creek cuts through the eastern portion of the City. The zoning in proximity to the creek varies throughout its course, from Moderate Density Residential (R-6), some Industrial (I) to a good portion of the commercial district on the south side of Yelm along Hwy 507. Most of the parcels near the creek have not been developed, however those that have been developed show a greenbelt between the development and the creek. This greenbelt also coincides with some sloping along the western side of the waterway. Thompson Creek runs through the western portion of the city, where the Master Planned Community (MPC) and some Low Density Residential (R-4) are zoned. There has been some infrastructure and residences put into place crossing the stream for new development. Some development of land SCJ Alliance December 2022 | Page 25 occurred prior to current environmental practice standards and are within wetland and flood hazard Figure 30. Water-based Environmental Constraints in Yelm (2022) Source: Thurston GeoData, As reflected in Figure 30, streams within the area, especially larger streams such as Yelm Creek present a flood hazard. Proposed residential development within flood hazard areas are required to build one to Areas and Resource Lands chapter. Ensuring the safety of people and their property can unfortunately also increase the cost of development. Wetlands are also environmentally regulated as a critical area and require review and consideration of impacts prior to development being permitted. Wetlands are among the most productive ecosystems in the world as they provide a high level of nutrients and primary productivity for many species of birds and mammals, according to the Environmental Protection Agency (EPA). These ecosystems also provide natural water quality improvement, flood protection, and shoreline erosion control because of this presence of wetlands and wetland review areas require additional review and for any impacts to be mitigated through local wetland regulation. SCJ Alliance December 2022 | Page 26 Mazama Pocket Gopher Figure 31. Mazama Pocket Gopher Areas (2022) Source: Thurston GeoData, While Yelm does not have any mapped Mazama Pocket Gopher Areas, it does have soils preferred by the protected species which can reflect higher levels of Mazama Pocket Gopher activity and habitat and therefore a need for additional jurisdictional review. According to the U.S. Department of Fish and Wildlife, the name Mazama Pocket Gopher encompasses four subspecies that are only found in Thurston and south Pierce County, Washington. All four subspecies have been listed as threatened under the Endangered Species Act since April 2014. Their primary threat is degradation and loss of their habitat due to conversion of prairie land to agriculture, commercial and residential development. The City is currently evaluating habitat for prairie species through the US Fish and Wildlife Habitat Conservation Plan (HCP) process that will protect local habitat and species for a period of thirty years, provide certainty for long-term land use plans and economic development, contribute to the creation of a green belt on the western side of the city, and enable the city to maintain control of local land use rules and regulations. Completion of the HCP is expected to take several years. Gap Analysis This section identifies specific gaps following from the demographic, service member, and housing data discussed above. These gaps identify segments of the population with particular housing needs and important issues and trends which may emerge in coming years and should be used to formulate policy considerations to close these gaps. SCJ Alliance December 2022 | Page 27 Quantity of Housing Units to Income levels The housing market is typically thought of as two pieces: the rental market and the sales market. While there is overlap in household income levels between these two markets, affordable rental units and lower pricesare always in demand. This same idea is reflected in the data in Figure 32 and Figure 33, below, where households making less than $50,000 in annual income have a higher burden of cost due to lack of available affordable housing choices. Data like that shown belowhelps to betterclarifywhere between number of renters and number of affordable units would benefit from an increasedsupply of lower priced units. This may take the form of subsidized housing or rental assistance programs. Figure 32.Renter Households and Affordable Rental Units by Income in Yelm (2021) 600 500 400 300 200 100 0 < $20,000< $35,000< $50,000< $75,000$75,000 or more Number of Renter HouseholdsNumber of Affordable Rental Units Source: 2021American Community Survey 5-Year Estimates, Tables S2503 The information in Figures 31and 32does not reflect certain factors, such as service members stationed at JBLM and the Basic Allowance for Housing (BAH) which they receive on top of their salary; this is discussed in more detail in the Off-Base Military Households section of this report. SCJ AllianceDecember 2022 | Page 28 Figure 33.Owner Households and Affordable Housing Units in Yelm (2021) 1800 1600 1400 1200 1000 800 600 400 200 0 < $20,000< $35,000< $50,000< $75,000$75,000 or more Number of Owner-HouseholdsNumber of Affordable Housing Units Source: 2021American Community Survey 5-Year Estimates, Tables S2503 Housing Units Needed to Accommodate Projected Population Thurston County and the City of Yelm expect population to grow to a total of 25,890residents within city limits by 2045, as discussed in the Historic and Future Populations section. Using this projectionand the American Community Surveydata from 2021, the 2045 projection is an additional 15,685 residents during this timeframe. This projection can be used to estimate the number of housing units that will be needed in Yelm by 2045, as shown below. This is forecast to be 5,486 additionalunits to meet the population growth of the city. Table 10. Estimated New Housing Units Required in Yelm (2045) 2021Estimates2045Projection Population10,20525,890 People Per Household3.223.22 Households3,1668,240 (5% Vacancy Rate)412 Total Housing Units3,2648,750 New Housing Units Required 5,486 Source: Washington Office of Financial Management (OFM), 2021American Community Survey 5-Year EstimatesTable DP04 and S1101, Thurston Regional Planning Council Table 11 presents a breakdown of projected housing units for 2030, 2040, and 2045. The calculations are based off the 2021 ACS listed household size and percentageof occupied housing unitsby income, with an added 5%to account for the standard vacancy rate. The table uses the projected population to break down the total housing units using the same method as Table 10, then assumes a 5% vacancy rate to obtain the projected occupied housing units andbreaks down the occupied housing units by 2021 percentage of housing units by income. SCJ AllianceDecember 2022 | Page 29 Table 11. Estimated Housing Units Required in Yelm by Income (2030 - 2045) 2021 2030 2040 2045 Total Housing Units 7,360 8,151 8,750 3,264 % of Area Median Income Occupied Housing Units 3,166 7,014 7,768 8,338 19% Less than $20,000 6.1% 428 474 509 Less than 19% 34% $20,000 to $34,999 7.6% 533 590 634 to 34% 48% $35,000 to $49,999 9.6% 673 746 800 to 48% 72% $50,000 to $74,999 14.8% 1038 1150 1234 to 72% $75,000 or more 59.8% 4194 4645 4986 or more Zero or negative income 1.5% 105 117 125 0% Source: 2021 American Community Survey 5-Year Estimates Table S2503, Thurston Regional Planning Council Another way of breaking down the housing unit projections is by type of structure. Table 12 represents the projections of housing unit needs if the City chose to keep the statistical proportions of 2021. Just under 78% of the -unit, detached (also known as Single Family residences (SFR)). If the same ratio is applied to growth by 2045, there would be a projected need of 6,781 SFRs by 2045 (an additional 4,252 units). ent zoning requirements have no lot size area minimum or maximum but use a designated structure density to regulate development. Table 12. Estimated Housing Units Required in Yelm by Type (2030-2045) UNITS IN STRUCTURE 2021 2030 2040 2045 Total housing units 3264 % 7360 8151 8750 1-unit, detached 2529 77.50% 5704 6317 6781 1-unit, attached 89 2.70% 199 220 236 2 units 0 0% 0 0 0 3 or 4 units 83 2.50% 184 204 219 5 to 9 units 190 5.80% 427 473 508 10 to 19 units 84 2.60% 191 212 228 20 or more units 202 6.20% 456 505 543 Mobile home 87 2.70% 199 220 236 Boat, RV, van, etc. 0 0% 0 0 0 Source: 2021 American Community Survey 5-Year Estimates Table DP04 While calculating potential land requirements with density regulations proves difficult as it is dependent on type of unit and individual lot sizes, we can get a general understanding of the amount of land required to accommodate 4,252 SFRs. If all the SFRs were developed in an R4 zone which allows a density of four residential units per acre, the City would need to accommodate approximately 1,063 acres (around 30% of the area of the City). The R6 zone, which requires a density of three to six residential units per acre, would require between 644 and 1403 acres to accommodate the SFR load. And the R16 zone, which requires a density of eight to sixteen units per acre, would require approximately 266 to 532 acres. These calculations do not include potential density bonuses that are available for planned residential developments, the size of the units, or residential capacity in non- residential zones. This analysis also does not consider other potential changes in the housing stock, SCJ Alliance December 2022 | Page 30 especially loss of housing stock across the city due to age or poor condition. This could also increase the number of new units required. Conclusion While Yelm is projected to grow in population and shows residential capacity, both on undeveloped areas and through infill of underdeveloped parcels, the city will need to consider areas to prioritize and improve infrastructure strategically to ensure capacity does not expand too quickly and impact the housing market or vacancy rates in a negative way. Some of this capacity, especially in the Master Planned Community in the western portion of the city has additional environmental considerations. Analysis of the housing prices, values, and supply show that Yelm residents face a housing availability issue more than that of affordability. This is not to say that affordable housing is not necessary but rather Yelm residents statistically have increased purchasing power when compared to the Thurston County region when looking at Median Household Income. This could be partially due to the military servicemember household use of the BAH to meet their housing costs. There is also limited availability of low-income, senior housing, or nursing homes located within the city. Growth projections from Thurston County show that residential density will increase within the western most portion of Yelm (Master Planned Community) and in the current moderate to high-density residential zones in the northern and southern areas of the city. Reevaluating current zoning designations and density allowances, especially in the areas referenced above would help to increase density and allow for development or redevelopment of parcels in these areas. Remodel and/or demolition of older structures or underutilized parcels will be important to review as redevelopment is typically costly to developers. SCJ Alliance December 2022 | Page 31 Appendix 1 City of Yelm Zoning Map Source: Esri, City of Yelm Appendix 2 Future Residential Potential Map (2017) Source: Thurston Regional Planning Council Appendix 3 Water-based Environmental Constraints in Yelm (2022) Source: Thurston GeoData