Private investments needed to help address Washington’s middle-income housing crisis, experts say


Shane Ersland


Washington has a housing crisis that will require a wide variety of homes to be built for residents representing various income levels. 

The Washington State Department of Commerce projects a need to add 1.1 million homes over the next 20 years, and more than half of them need to be affordable for residents at the lowest income levels. 

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Washington housing experts discussed efforts to establish affordable homes during the Inland Northwest State of Reform Health Policy Conference in Spokane. Empire Health Foundation President Zeke Smith said the state’s lack of housing is a huge cost driver for the healthcare system.

“The folks showing up in your emergency rooms on a regular basis, and who perpetually need additional services, often overlap with the homeless population,” Smith said. “There’s an individual and community health aspect of it; you can see a direct and proportional relationship between housing affordability. We absolutely need more affordable housing, both to address homelessness and housing insecurity.”

Spokane Housing Authority Executive Director Pam Parr highlighted a specific need for middle-income or workforce housing.

“It’s getting harder for people to purchase homes,” Parr said. “Bringing middle-income housing to a community is good for the whole community. Middle-income folks are the folks that pay property taxes. And in our state, that’s what funds governments, is property taxes. That’s really important to remember.”

Middle-income housing is for people who make between 60 to 120 percent of the median income, Parr said. Low-income housing is for residents who make lower than 60 percent of the median income.

“Most low-income housing is funded through low-income housing tax credits. But what we really need to do is figure out how to fund middle-income housing. There aren’t currently a lot of government programs available to do that. There are large employers that are stepping into this space. There are other large employers that could be in this space and should be in this space. So I’m really advocating for some of those private companies to step into this space and help out.”

— Parr

Smith said private investments will be needed to address the state’s middle-income housing shortage. An example of that type of investment was the development of the Evergreen Impact Housing Fund, which was a $50 million investment from Microsoft to create about 1,250 affordable units in East Seattle.

“Most of us don’t have $50 million to throw at an issue,” Smith said. “But with that, they were really able to address where there’s a gap in funding; workforce housing. We don’t have a Microsoft on the east side, but if we put some layers and different partners together, we might actually address some of that.”

The state’s legislature attempted to address some of the state’s middle-income housing challenges with the passage of House Bill 1110 during the 2023 session. The “Middle Housing” bill will allow for duplexes and townhomes in neighborhoods currently dominated by single-family homes. But Parr said the government will not be able to solve the issue on its own.

“We really need to have those large employers step up to the plate and provide some funding for more affordable housing for their staff, or down-payment assistance for their staff to purchase homes,” Parr said.

Google, Amazon, and Microsoft have all undertaken efforts to do this, but additional large companies need to step up, Parr said.

Permanent supportive housing needs

Panelists also discussed the state’s need for permanent supportive housing. The Department of Commerce estimates that Washington will need more than 122,000 permanent supportive housing units over the next 20 years.

Yakima Neighborhood Health Services CEO Rhonda Hauff said the organization decided to enter the housing sector after a board member there spoke to an unhoused person who said the local homeless population needed a place to go whenever they became sick.

“That was our introduction to medical respite care,” Hauff said. “It took us a couple years, but we developed our first medical respite program. A couple years later, our providers came to us and said, ‘If you want us to make a difference in people’s health, we need to help put a roof over their head.’”

Yakima Neighborhood Health Services now operates 141 units for permanent supportive housing. They serve chronically homeless individuals and people with disabilities, and many are leased through private landlords.

“In the lower Yakima Valley, there is not a lot of accessible housing, but we have some pretty good relationships with private landlords,” Hauff said. “We sublease to people who are chronically homeless.”

The organization is able to help residents reduce a lot of the barriers they have (including bad credit or criminal records) when attempting to find housing, Hauff said. It also utilizes the Substance Abuse and Mental Health Services Administration’s permanent supportive housing evidence-based model to provide additional services to tenants with mental health disorders.

“So in addition to our housing case managers, using the model of supportive housing, we also infuse it with a nurse (or) a behavioral health specialist, so they’re providing services when our case managers identify the [tenant’s] needs. It’s all within the same healthcare team. As a healthcare organization, I can’t stress enough what this has done for us because our infrastructure is healthcare. The goals are to improve their health, first of all, and to increase their self-sufficiency.” 

— Hauff

Yakima Neighborhood Services also conducts coordinated entry work, which promotes a continuum of care that empowers people disproportionately impacted by homelessness.

“We are the largest provider of coordinated access in the (US Department of Housing and Urban Development) housing world in Yakima, so we do coordinated entry, helping people get into housing,” Hauff said. “We have our street outreach team that finds people. And our medical respite program is often one of the first points of entry because when people are feeling at their lowest, and really wanting help, they come into medical respite. 

That’s how housing gets into our healthcare world. More community health centers are delving into this arena, and Washington is such a ripe place for this to happen because there are lots of legs to this stool, and it’s just making our efforts stronger and stronger.”

Spokane’s housing challenges

The Spokane Housing Authority has created about 850 permanent supportive housing units in the 10 years Parr has been there, she said.

“The problem with permanent supportive housing is when people get in, they can’t move on because there’s no place else to rent or to go,” Parr said. “We’re going to be working hard next year on a strategy to figure out how we can take folks who have stabilized and are ready to move on to a less intensive setting, and find the answer for them, to free up that permanent supportive housing unit for the next person who needs it. Right now, people are going into permanent supportive housing and they’re stuck there. There’s no place else to go.”

This is despite the fact that someone who has been in a supportive housing unit for a year can request a tenant-based voucher to move out of their unit and get subsidized to live in a different setting, Parr said. 

“The problem is they can’t use the voucher somewhere else,” Parr said. “There is nothing to rent in Spokane. Many of you are probably healthcare providers, and I would guess your employees are having a really hard time finding a place to live.”

Empire Health Foundation has been heavily involved with the Rights-of-Way Safety Initiative over the past 18 months, Smith said. The initiative is a collaboration between several agencies that transitions people residing on state-owned rights-of-way to safer housing opportunities with an emphasis on permanent housing solutions. The initiative helped move approximately 600 people from Spokane’s Camp Hope, which was the state’s largest homeless encampment. 

“We received funding from the Department of Commerce to act as an intermediary for a service provider continuum to provide peer navigation services, outreach services, housing services, and housing navigation services to be able to move people off of Camp Hope. In October last year, there were 467 individuals on one block. And as of June 9th, there was nobody left on that site. They didn’t all get into housing. That’s not realistic, nor is it what happened. But over 200 of those individuals did get into different types of housing.”

— Smith

While Washington has a long way to go to fix its housing crisis, Parr said she has never been more excited about addressing it in the 35 years she has worked in the industry. 

“This is the first time I have ever been so excited about housing funding issues because it’s not just housing people now that are talking about it; everybody’s talking about it,” she said. “And that has never happened before. And that’s a really important thing to remember because if we can work together, and push forward some of those policy and funding things, I think we can truly make a difference

We believe at the housing authority that housing is that foundational piece that we really have to have to make all the other things work. It’s pretty hard to make somebody healthy if they don’t have a place to lay their head at night.”