Friends of Lake Chelan provides insight on affordable housing crisis

CHELAN – Friends of Lake Chelan’s Steve Kline and John Olson orchestrated an affordable housing meeting, Wednesday, Jan. 10 at Lakeside Lodge and Suites. The meeting emphasized on the negative impact that short-term rentals (STR) can have on a community.
Olson led into the presentation with a slideshow of statistics gathered through many agencies including the planning departments of the City of Walla Walla, Wash., City of Chelan and City of Bend, Oregon. The presentation started out by comparing the community of Chelan and the short-term rental crisis to “The Frog Story” in which a frog stays in a pot of water, brought to a slow boil, until the end, but will jump out of already boiling water. “Our community is only degrees away from being that frog,” said Olson, “(and) short-term/vacation rentals are the burner.”
“The thing that started the whole investigation for us was an article,” began Olson, “on (the City of) Walla Walla’s frustration with their current STRs.” He continued explaining the City’s concern with their rapid growth in STRs, “they thought that there might be as many as 200 in their community,” he explained, “not knowing exactly what to do, the City started out with a complete ban on STRs … they soon converted that to grandfathering existing properties, but still banned new STRs.” The City of Walla Walla continued with Ordinance 2017-23, which was based off the lack of information and contributions to the community from the current STRs. Some of the rationale for the ordinance was that there was no regulation on a new and impactful industry, and no business licenses or registrations, so there was no foreseeable way of knowing the exact number of the vacation type rentals in the community.
The Friends of Lake Chelan began researching sources for data on STRs in the Chelan community. Researching vacation rental sites such as Vacasa, Sage and VRBO, the team compiled a rough estimate of STRs for Chelan. “It looks like, in the Chelan Valley,” Olson said, “and there may be some duplication here, but, there may be as many as 1,347 short-term rentals in our valley, and that’s not including unknown Manson ones.” Councilman Dobbs takes the moment to suggest the probability for duplicates in the quantity configured using the common sites for vacation rentals. Most rentals, he explained, advertise on more than one site. Due to the lack of location information on the rentals, however, explained Olson, it’s beyond difficult, if not impossible, to compile an accurate number of the rentals. Taking the possibility for duplication into consideration, when estimating costs saved or lost for the City due to the STRs, a flat quantity of $1,000 was used. “I’d like to offer to come along side and give you some numbers that I have that were generated by a company that specializes in doing this sort of thing,” offered Dobbs, “I would love to see those numbers,” replied Olson. In an interview with City of Chelan Community Development, Olson asked how many STRs are in Chelan, “the answer we got is ‘we have no idea’.” With the way Chelan is laid out, it’s hard to really define where limits are, he explained. “When you look at short-term rentals online, there’s no address. Until you sign up, until you give them a check, you don’t get an address.” This makes it extremely difficult to identify the amount and locations of short-term rentals in our community he explained.
“We have a real problem in Lake Chelan,” said Olson, “the cause of it, in our (he and Steve Kline) opinion, is short term rentals (STRs).” Olson explained some of the local impacts believed to be caused by the short-termed rental crisis in Chelan, “STRs drive up both long-term rental rates and housing purchase prices,” he explained. “The problem will not solve itself,” said Olson, “according to the Lake Chelan Chamber of Commerce information kiosk in their office, Chelan is now the number one resort community destination in Washington State, which means we’re probably the (number one) resort destination in the Northwest, they’re stating that there’s over two million visitors (to Chelan) every year.”
Chelan has been frequently compared to Bend, Oregon, who also depends heavily on the tourist industry. The City of Bend, Oregon’s approach to their STR crisis is what the Friends of Lake Chelan suggests the City of Chelan model their solution to the vacation rental crisis after. “Bend took a slightly different tact from the Walla Walla decision,” explained Olson, “rather than banning STRs, Bend turned STRs into a profit center, generating income for the city for the services that the city provides, both now and into the future, without curtailing the business opportunities of the property owners.” Projected Chelan finances under the Bend model would include a Type I business registration card, “when you look at the regulations across the state, this is real typical,” suggest Olson, and an infraction fee of $1,000, plus other monetary solutions. “Rough estimates suggest that, under a comparable ‘Bend’ plan in Chelan, the average STR in Chelan will generate $3,200 for Chelan, totaling $3.2 million from the +/- 1,000 STRs in Chelan (currently).” Olson pointed out that Dobbs was very accurate in the point he made about the actual unknown number of STRs in Chelan, and how many may have been cross-referenced in the attempt to compile an accurate figure. “But, if we had that kind of money available, or even a portion of that money available, it’d be very easy to run a program and support the program, it could also support the auxiliary services the City provides at the parks, roads, affordable housing for our workers that serve the tourists and general services in the city.” Olson then went on to request a call to action. “Saying no to the STR owners, rental managers and local real estate agents who all profit from STRs, even for the benefit of the community, is a difficult decision to make,” he began, “we recognize that, but the decision to manager STRs is legislatively easy with many, many examples and success stories available. It only takes the courage, the will, and the stroke of a pen to make it happen.”
“I’m curious, of the 1,347 in inventory,” asked Councilman Tim Hollingsworth, “how much of that is under the control of the City? I know, obviously South Shore, Manson is tough … my point is that it’s a regional issue.” Councilwoman Wendy Isenhart supplied her input, “I wanted to say proudly, that Chelan does lead,” she began, “I think we’ll come up with a great plan, we’ve got a super council, Ray (Dobbs) has brought this forward and we’re going to be talking about this, I think, in the first quarter.”
Steve Kline then took the front of the room and presented the affordable housing presentation that was provided to Chelan City Council several weeks back. The presentation, a reiteration of the affordable housing needs in the community, explained the reasoning behind the Citizen Campaign launched by the Friends of Lake Chelan. “This comes from the Harvard University School of Business,” he began, “affordable housing will never emerge in an open real estate marketplace because the marketplace will always promote the highest economic value. So, if you’re talking about something that’s for sale, unless you put a deed restriction on it or it becomes a community land trust situation you’re only going to sell it once, then it’s no longer affordable. Keep this in mind.” Kline continued on in his explanation for the campaign, pointing out statements such as the establishment of affordable housing is done by the people and for the people to meet community needs, solidifying the crucial need for a partnership between the developers, city, landowners and community members.
In the affordable housing portion of the night’s presentation, Kline pointed out that 60 percent or 3,000 of Chelan’s work force commutes from the outside, according to the Comprehensive Plan Economic Development Plan. This percentage is configured based off workers within Chelan city limits, “even at a $25,000 per year income,” explained Kline, “this results in $75 million revenue loss to Chelan.” He continued, explained that even now, during the slow season, help wanted signs are posted throughout town, defining the connection between the inability to sustain employment in an unaffordable housing market.
Kline proceeded by providing statistics for the affordability margin in the community. Surveys conducted revealed that personnel within schools, parks and service industry workers average $23,500 to $38,000 gross income per year. At the standard range of 30 percent set aside for housing costs, at the average gross income in Chelan, the pricing for affordable housing would range from $588 to $950 per month for rent or mortgage payments. In Chelan’s housing marketplace, explained Kline, it is more common to see charges upward of $1,000 for “minimal one-bedroom housing.” The solution, he said, is to build affordable housing for the community similar to the plans available through the Missing Middle Housing examples available online. The aesthetically pleasing and open-floored plans are built in a cost-effective manner, allowing the rates to remain affordable and the cost of the build to be minimal. Tenant criteria for the housing, he suggested, would require the tenant to work in Chelan, have income below $50,000 per year and maintain a crime-free neighborhood by requiring local police background checks.
For more information on the Friends of Lake Chelan’s Citizen Campaign for Affordable Housing, locate the Friends of Lake Chelan Facebook page or email Steve Kline at skline38@hotmail.com or John Olson at johnrolson@outlook.com.