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HomeMy WebLinkAbout2023.08.17 Planning Commission PacketAGENDA PLANNING COMMISSION MEETING City Hall - Council Chambers 525 North Third Avenue Pasco, Washington THURSDAY, AUGUST 17, 2023 6:30 PM This meeting is broadcast live on PSC-TV Channel 191 on Charter Cable and streamed at www.pasco-wa.com/psctvlive. Audio equipment available for the hearing impaired; contact staff for assistance. Please silence your cell phones. Thank you. I. CALL TO ORDER II. PLEDGE OF ALLEGENCE III. ROLL CALL: Declaration of Quorum IV. WELCOME AND ANNOUNCEMENTS V. APPROVAL OF MINUTES • Meeting Minutes of July 20, 2023. VI. OLD BUSINESS VII. PUBLIC HEARINGS • 2024 CDBG Fund Allocations (BGAP2023-003) • Housing Action and Implementation Plan VIII. WORKSHOP IX. OTHER BUSINESS X. AJOURNMENT PLANNING COMMISSION MEETING MINUTES City Hall - Council Chambers 525 North Third Avenue Pasco, Washington THURSDAY, JULY 20, 2023 6:30 PM Planning Commission Meeting Minutes Page 1 of 11 July 20, 2023 CALL TO ORDER City of Pasco Planning Commission meeting was called to order at 6:30 p.m., by Chair Jerry Cochran. PLEDGE OF ALLEGIANCE Chair Cochran led the Pledge of Allegiance. ROLL CALL Commissioners Present: Abel Campos, Rosa Torres, Mitchell Moffitt, Kim Lehrman, Jay Hendler and Jerry Cochran, a quorum was declared. Commissioners Excused: Paul Mendez, Dana Crutchfield, and Rachel Teel Staff Present: Community & Economic Development Director Jacob Gonzalez, Block Grant Administrator Kristin Webb, and Administrative Assistant II Carmen Patrick. WELCOME AND ANNOUNCEMENTS Chair Cochran explained the Planning Commission is an advisory board made up of volunteers appointed by City Council. He further explained the purpose of the Planning Commission was to provide recommendations to City Council regarding changes to the City’s Comprehensive Plan, Land Use Updates, Block Grant Allocations and Zoning Code. The Planning Commission is tasked with considering the long-term growth and development of the community, the impact of land use decisions on community, livability, economic opportunity, housing affordability, public services, and the environment. Chair Cochran reminded the audience tonight’s proceedings were being broadcast live on City of Pasco’s Facebook page and on Charter Cable PSC Channel 191 and will be rebroadcast several times during the next month. He stated the meeting was also being recorded and could be watched on City of Pasco’s website, which is Pasco-wa.gov. Click on the VIDEO ON DEMAND link and make your selection there. Chair Cochran stated copies of the meeting agenda were available on the back table. He then asked that everyone silence cell phones to prevent interruptions during the meeting. For those present this evening, when you are given the opportunity to address the Commission, please come to the podium, speak clearly into the microphone, and state your name and city of address for the record. Chair Cochran reminded the audience and the Planning Commission that Washington State Law requires public meetings like the one being held this evening not only be fair, but also appear to be fair. In addition, Washington State Law prohibits Planning Commission members from participating in discussions or decisions in which the member may have a direct interest or may be either benefited or harmed by the Planning Commission’s decision. An objection to any Planning Commission member hearing any matter on tonight’s agenda needs to be aired at this time or it will be waived. Chair Cochran asked if there were any Planning Commission members who have a declaration at this time regarding any of the items on the agenda. Planning Commission Meeting Minutes Page 2 of 11 July 20, 2023  No declarations were made. Chair Cochran asked if anyone in the audience objected to any Planning Commission member hearing any of the items on the agenda.  None heard, record shows there were no declarations. Chair Cochran stated the Planning Commission needed and valued public input explaining it helped the Commission understand the issues more clearly and allowed for better recommendations to City Council. Furthermore, in many cases, this could be the only forum for the public to get facts and opinions placed into the official record and City Council will use to make the Commission’s decision. He encouraged those present to take full advantage of this opportunity. APPROVAL OF MINUTES Commissioner Campos moved to approve the Planning Commission meeting minutes of June 15, 2023, Commissioner Torres seconded, and the motion carried unanimously. OLD BUSINESS None PUBLIC HEARINGS A. Block Grant 2024 CDBG Allocations (MF: BGAP2023-003) Block Grant Administrator Kristin Webb presented her grant program requirements.  HUD Approved 5-Year 2020-2024 Consolidated Plan- Goals & Strategies for spending.  Annual Action Plan (AAP) Supplement-Basis for carrying out annual goals and objectives each program year.  Consolidated Annual Plan Evaluation Report (CAPER) to evaluates AAP Performance.  Citizen Participation is mandatory and encouraged throughout the process. Consolidated Plan 2020-2024 Goals  Increase and Preserve Affordable Housing Choices  Community, Neighborhood and Economic Development  Homeless Interventions and Public Services Kristin stated the estimate of the available funds based on the entitlement total for 2023 is CDBG Entitlement $651,474; Prior Year funds/Program income $65,000 – program income is received from pay offs of CDBG rehab loans. Available for funding in 2024- $716,000. She then discussed the breakdown of percentages by project type and goal summary, which line up with the Consolidated Plan Goals. We received 21 proposals for funding totaling $2,515,250. So, with an estimate of $716,000 we have a deficit of $1,798,776. The path forward is:  May 26 – Application Deadline  July 20 – Planning Commission Public Hearing  August 17 – Planning Commission Action  August 17 – End Public Comment Period for AAP  August 28 – City Council Workshop  September 5 – City Council Action Planning Commission Meeting Minutes Page 3 of 11 July 20, 2023 Then update Allocation for final submission to HUD. Applicants: • Fida Garica, Engineer I for the City of Pasco. Fida is asking for funds for the Lewis Street Corridor Improvements Project. Questions from Commissioners: Commissioner Campos asked if this was a result of the surveys sent out to the community. Fida Garcia answered yes, that was a lot of input from our community and what was actually depicted on the Downtown Master Plan. Commissioner Lehrman asked when is the estimate timeline to be done with the Lewis Street Overpass? Fida Garcia answered we're hoping to have design completed by the end of this year or early next year, and hopefully, if we get funding, we can start construction next year. Commissioner Torres asked can you talk a little bit more about how the Overpass project and this project will kind of connect and what does that look like where the connection is going to be? Fida Garcia continued so the Lewis Street Overpass will run from Oregon Avenue to Second Avenue. And at the intersection of Second Avenue to Fifth Avenue is our project, which is from Second to Fifth. And then Peanuts Park is just adjacent just south of Lewis Street and Fourth. • Jessica Brackin, Development Services Lead for the City of Pasco. Jessica is asking for funds for sidewalk improvements for ADA, Americans with Disabilities Act to bring them up to the most current set of standards. Questions from Commissioners: Commissioner Moffitt asked if the City is required to update all crossings to meet ADA requirements? And if so, what is the timeline that's given? Jessica Brackin answered the overall answer is yes, we are required to have all of our facilities brought up to ADA. There's not a strict timeline given, but there is the need to have a plan in place and to identify the timeline that we wish to get in compliance by and a path to get there. It's a federal requirement, it varies so much from city to city. There's not a particular date required because some cities have a lot more out of compliance than others. Obviously, there's lots of cities that are huge that were built before a certain time that would have a very heavy lift. So, it's flexible in terms, but you have to develop a plan to become under compliance. Commissioner Moffitt continued so we're just trying to get closer to where we should be, but this is not going to get us where we should be? Jessica Brackin stated there's provisions in place with retrofits that could allow flexibility, Planning Commission Meeting Minutes Page 4 of 11 July 20, 2023 sometimes it's often in very tight right of ways, or where there's maybe other structures that could prevent you from meeting total compliance. There's some flexibility that's built into there, but that's part of what the plan would adopt to. If we're places that we just can't make that work, or there's drainage issues that would cause a bigger safety threat. There's definitely leeway that maybe wouldn't the end goal wouldn't be 100% compliance, but you are meeting the intent of the regulation. Commissioner Moffit asked if all intersections require, for example, the blind, they have to push the button and you can hear the beeps or something and some don't. Is there an ADA requirement, this is a certain percentage, or what is that? Jessica Brackin answered there's different warrants and it's very detailed on what's included and not included. And ADA is often thought about for physical disabilities, like walking disabilities, but you're very correct, it includes audible disabilities, vision disabilities and things. And part of that is included with the physical structure, part of it's included with signage. There’re different warrants for different types of intersections of what you require, for which if some do require the beacon that actually makes audible noise that people can understand or not, it depends on a lot of parameters of which level is required. Commissioner Lehrman asked regarding on your application question number four, “Projects will be ranked according to the attached allocation policy”. I don't understand how this is earmarked for a low priority. Jessica Brackin explained so we went through the ranking process, and a part of it is to do with goal number two, which is “Improve community infrastructure, public facilities, and local economies”. And part of it would be in that prioritization of the plan is that a lot of the areas that are older fit into some of those categories and it's making sure that they're up to date and that they're meeting facilities, so it applies to those individual groups that are listed as part of the program. Commissioner Campos asked for that transition plan, is there a specific area of the City that you're focusing on or are you looking at the whole scope of the whole City? Jessica Brankin answered it would look at the whole City as the plan because that is the requirement. But with the previous inventory that was done, I think it was almost ten years ago, and there's been improvements in then. So that's part of the update. But it does target certain neighborhoods just naturally that could particularly benefit from it. Commissioner Torres asked if you don't get this funding to update the plan, is there something that you can keep moving forward with or does this stop progress on getting more of these done? Jessica Brackin answered we will have to pursue funding in other locations and reallocate from our budget because it is something that needs to move forward. • Jessica Brackin, Development Services Lead for the City of Pasco. Jessica is asking for funds for Neighborhood Traffic Management. This involves strategies to discourage speeding, creating a safer environment for all users of the right-of-way. Planning Commission Meeting Minutes Page 5 of 11 July 20, 2023 Questions from Commissioners: Chair Cochran asked how does the street connectivity issue that we're working on interplay with this? Because it seems like the more we create street connectivity, the more we create this problem. Jessica Brackin replied yes, they are interrelated, especially if it's only in certain spots and not all throughout the City. If there's kind of uniform connectivity, you don't have as much of a problem. But the connectivity does multiple good things, but also it can encourage speeding. And it's not necessarily the volumes we're trying to mitigate, it's the speeding tendency. So, it's not necessarily a capacity issue or through traffic. Chair Cochran continued regarding this one and the one before. When you say you want to develop a plan or program, is that typically just staff funding and staff time to do that, or is it consultants or a little bit of both? Jessica Brackin answered probably both. • Melissa Ransom and Jeff Morrow are asking for funds for the Pasco YMCA at the Martin Luther King Jr. Center. Questions from Commissioners: Commissioner Campos asked we saw on the application that you had said that you serve about 2,700 residents. What's the number been like in previous years? Have you seen an increase? Jeff Morrow answered yes, I think we have. The numbers a few years back, I don't think were as big as that, but it's getting bigger. Commissioner Moffitt do you have any programs that allow adults to do something? Are there any adult programs you have that you offer? Jeff Morrow stated one of our biggest problems is we don't have a physical building like other cities do, like Walla Walla does, Spokane, Yakima. So that's where we're kind of bouncing around the Tri-Cities. We have facilities in Richland, in Kennewick, Pasco, and so it's more catered to the youth right now. That's one of our goals as the years go by, that we want to get a bigger building and be able to have more things for adults. • Donna Tracy with The Arc of the Tri-Cities is requesting funds for the purpose of providing scholarships for individuals and families who meet low-income status so that they may participate in their services. Questions from Commissioners: Commissioner Hendler asked where are you located? Donna Tracy answered we're located at 1455 Fowler. • Liz Delamora with the Domestic Violence Services of Benton and Franklin Counties, Pasco Planning Commission Meeting Minutes Page 6 of 11 July 20, 2023 Maripositas Outreach is requesting funds to hire two new bilingual advocate positions being proposed. Questions from Commissioners: Commissioner Moffit asked do you provide any services to men and if so, can you just kind of elaborate? Liz Delamora answered we provide services to all genders. It doesn't matter men, women, anybody that needs our services, we are available for. We do have an emergency shelter that shelters only women and children, but we do have offsite places that we work with, for example, hotels in the area that can shelter men. So, we are open to helping anybody that is seeking our services. Commissioner Campos asked just for clarification, so if you do get this funding, that would give two staff to focus solely on Pasco? Liz Delamora stated yes. We are trying to expand our services beyond Kennewick and Richland, since we have some locations there. We are trying to do a satellite office. Our staff that are going to be focusing on would be the Pasco locations, as well as maybe entirely hoping Franklin County doing a lot of mobile outreach and just having a place where someone can come in. And if there's an office space, something like that, we can provide services too. So, it remains confidential. But the point of all of this is that we want to make it as accessible as possible to anybody that is seeking our services. • Rosanna Johnson with the City of Pasco Code Division is requesting funds to organize community clean up and educational outreach events in areas of Low-moderate income. Questions from Commissioners: Chair Cochran asked based on the application, that it's southeast Pasco only. Rosanna Johnson answered we're targeting the low to moderate income areas, which would be from the 395 over to the eastern city limits of Pasco. That's predominantly where we have the least amount of complaints come from residents, but the highest observable violations. • Rosanna Johnson with the City of Pasco Code Division is asking for funds to add an additional rental inspector position, as of now they only have one. Questions from Commissioners: Commissioner Moffitt asked how do you decide, other than at the time of licensing and every two years, who to inspect? Do you also inspect when people have complaints or something like that, or what actually draws you to do an inspection? Rosanna Johnson commented so if you're licensed automatically, you're going to be inspected at the time of licensing every two years. That's every single rental that we have in the city. We do have limitations on the number of units. So if you have a multifamily complex, more than 20 units, then we inspect 20%. Unless you have failed inspections, we can inspect 100% of the units. On occasion, that does happen where we have to inspect more than, say, 15 in a 100 unit complex. Planning Commission Meeting Minutes Page 7 of 11 July 20, 2023 Otherwise, single family dwellings are all inspected. As far as complaints, we do take complaints from citizens. They have to follow the RCW landlord tenant laws, and once they've complied with the time frames and requirements of that, they bring the complaint to us, we inspect, and we have to continue to follow through. Commissioner Torres asked if you get the funding for this position, how do you plan to keep that person funded or those positions funded going forward, long term? Rosanna Johnson answered at the moment, it would be funded through CDBG. As far as wages go, the city pays for the benefits for each staff member that is already funded and is proposed to be funded. We would request it in future budgets. Commissioner Lehrman stated I've heard that sometimes people might call in over and over to code enforcement to come in, and that can create, a harassing situation. Is there any way that code enforcement tracks who calls in? Rosanna Johnson stated right now, anybody can call in and make a complaint, and you can be anonymous, and you can stop me in the street and give me your complaint as long as I'm on duty. As far as people calling in and calling on the same person, same property again and again, if there's no violation, there's no issue, no citation noticed, sent to them, and no contact made. But if there is a violation, then we have to continue with our process and cite them. We do our best to work with people as much as we can. We call people, we email them, we'll knock and talk at their door, leave door hangers. Like I kind of mentioned in our proposal, we do a lot of effort, as much as we're able to. There’re three complaint officers, so really only two out in the field at a time. It is kind of difficult to get to everybody in person, but we do our best. Commissioner Lehrman asked if there was a method for those who don’t speak English. Rosanna Johnson answered yes, we have several staff members that speak Spanish, we also have Language Link that we can call and they have a list of languages available to translate, and we also have somebody who translates live or over the phone and we can also use Google Translate if we are in a pinch. Kristin Webb continued the other applications that we have here, one of our directors couldn't make it, so I was going to kind of go briefly over his. So, the ACS Department, which is Administrative and Community Services, are applying for three Recreation Specialists. They have one at the Civic Center, one at Martin Luther King, and then the First Avenue Center, which used to be called the Senior Center. They have applied in the past. Senior Life Resources, they are the Mid-Columbia Meals on Wheels. The ACS with the City of Pasco also applied for their Pasco Youth Recreation Scholarship program. League of Education Voters Foundation, this is their first time applying. ACS also applied for replacing some of the equipment at the Pasco Specialty Kitchen. CDBG myself, I applied for minor rehab funds again and also facade, as you had heard from Rosanna, we did two facades this year, and those were monies from 2016 and 2018 that had not been spent. But with the help of Code Enforcement, going out there and talking to these individuals, brought them to the City to apply for those funds. And then we also do have to pay for the Section 108 debt payment, and that's for the next 18 years, so that will always be in our Planning Commission Meeting Minutes Page 8 of 11 July 20, 2023 funding unless General Fund decides to take that payment over. Questions from Commissioners: Chair Cochran commented that the League of Education Voters, was designated as high risk, and I know there's probably a rubric behind it. I just don't know what that is. Kristin Webb explained we have a risk assessment that we do, and so it has questions that HUD has us ask them, and so that's where we come up with what their risk number is or whether they're going to be medium, high or low. It is not detailed in the application, however it does say that they will be assessed. Kristin said she would bring copies of the risk assessment to the next meeting for the Commission. Commissioner Campos asked what was the safety upgrade on the ball field at Kurtzman Park? Kristin Webb answered that they are wanting to replace some of the bleachers and equipment. Commissioner Lehrman asked coming back to the Kurtzman Park, I noticed it said on page two, number seven, it didn't list how many residents would be served. Kristin Webb stated the individual that filled out that application is new in filling these out, so we kind of had to explain that to him, and so he was going to get us that number. So we're hoping that when we come back in August, we'll have that for you guys. Commissioner Lehrman added would the League of Educated Voters be able to come back in August and do a presentation? Kristin Webb answered yes, because it’s still a public hearing. B. Block Grant 2024 CDBG HOME Funds Allocations (MF: BGAP2023-004) Kristin Webb updated the Commission on this years allocations. The estimated entitlement funds for Pasco are $179,197.  Estimated Program Income is $100,000- these funds are from Down Payment Assistance Payoff’s.  We are budgeting $100,000- Owner Occupied Rehab- with these dollars the home must be brought up to current code standards, we are anticipating only doing 2 rehabs.  Down Payment Assistance- $10,000- anticipating only doing 1 as the purchase limit set by HUD for Pasco is $347, 000 which means the purchase limit can’t be more than that.  Tenant Based Rental Assistance- $109,197- the Consortium has a contract with CAC, Community Action Connection to administer that program for the 3 cities.  Program Administration- $10,000- for Pasco staff to Administer the program. C. Draft Draft Housing Action Plan Jacob Gonzalez presented the Draft Housing Action Plan to the Planning Commission with an opportunity to review. A public hearing has been scheduled and noticed for July 20 and August 17 Planning Commission meetings. Planning Commission Meeting Minutes Page 9 of 11 July 20, 2023 Next steps:  July 20: Planning Commission Public Hearing #1  August 17: Planning Commission Public Hearing #2/Recommendation  Late August: 4th Stakeholder Workshop  Late August-October: City Council Workshop and Adoption Public Comment: Peter Harpster, Aqtera Engineering, 2815 St. Andrews Loop Ste# C, Pasco We are members of the development community, have been attending these workshops that Director Gonzalez has been hosting and work with several different developers, building communities both in the City and in Franklin County. And I also sit on the Franklin County Planning Commission. The developments that we do in the county, we can only go so small in the lots, one acres, pretty much as small as we can go. And so with those projects, we're not really addressing the housing crisis that exists today. We're definitely in favor of this action plan and benefits a lot of different groups. The developers, of course, build more products, residents as well, that may not be able to afford a one acre lot with a $700,000 house out in North Pasco, but can buy a 3000 square foot lot. And it's a great entry level home. We're working with the nation's largest home builder. And just today, planned the first phase of a multi-phase project south of Burns Road in the Broadmoor area that eventually, at full build, it will have 224 homes that really were designed for entry level homebuyers. One comment that I think maybe would be helpful, or maybe I'm just ignorant. Strategy four mentions special population groups, and then strategy five mentions vulnerable residents. And maybe it's just me, I don't know the difference. And it may be helpful to define those differences. I think there's certainly a lot of overlap, but it would be helpful to know exactly which groups are impacted or benefited between those two. And then just the last comment, along with the housing crisis, there's a staffing shortage for lots of industries, including, I think, planning and engineering. But one comment would just be that we move through this process and adoption of this plan quickly. That way, people who desperately need housing can get it sooner. And one thing that this conversation brings to mind is Maslow's Hierarchy of Needs, which I'm sure a lot of you are familiar with. And it's a concept in psychology that for people to become their best selves, they need adequate housing and lots of other things. And there's a pyramid at the top is becoming your best self, being a contributing member of society at the bottom of that pyramid. One of the very first needs that people need met is adequate housing. And so the sooner we can pass this through, the sooner we can remove some of those barriers to provide a variety of housing types. Sooner we can get people in housing, they can become contributing members of society when that housing is taken care of, that's it. Thank you. WORSHOP None Planning Commission Meeting Minutes Page 10 of 11 July 20, 2023 OTHER BUSINESS A. Presentation National Legue of Cities Presentation Jessica Brackin, City of Pasco Development Services Lead, and Gina Vasquez, Community Resource Specialist presented the Commission with an update on the current efforts related to the National League of Cities (NLC) Mayor’s Institute on advancing community revitalization to improve health and equity in Pasco. The NLC Pasco Team began developing the “Shared Action Roadmap” in Houston and the will be refined over the next month. Next Steps:  Implementation of the Downtown Master Plan such as revising code to allow more flexibility for murals and public art.  Redevelopment study of the former Thunderbird Motel site. Question/Comments from Commissioners: Commissioner Moffitt commented on the idea of murals. Commissioner Lehrman commended on the presentation and presented ideas on how to get citizens and younger people more involved. Chair Cochran stressed concerns on what kind of art will be allowed. Gina Valdez stated that she works with the Pasco Arts and Culture Commission and any public art will be governed. B. Memo 2023 Comprehensive Plan Amendment Docket Jacob Gonzalez informed the Commission that the purpose of this Memo was to provide them with a preliminary assessment and update on the proposals we have received, in preparation for a public hearing this spring. There are two pre-application meetings, we have one submitted application, and one determination of completeness. The annual amendment process has two components:  Establishment and acceptance of the annual docket consisted of completed application which determines whether applications shall be considered.  Evaluation of the docket applications by the Pasco Planning Commission and Pasco City Council Note: The 2023 docket will also include the evaluation of one application that was submitted as part of the 2022 docket. C. Memo Recreational Vehicle Parking Regulations Jacob Gonzalez stated to the Commission that the Code Division and Pasco Police Department receive 300+ documented complaints annually about recreational vehicle and equipment parking on private property and public streets. These complaints reference exceeding the 72- hour parking limit on the public street, obstructing views of driveways and pedestrians, blocking sidewalks, driving over utilities and neighborhood aesthetics. Through contact with residents our office has been made aware of requests for amendments to Planning Commission Meeting Minutes Page 11 of 11 July 20, 2023 the recreational vehicle and equipment parking regulations. As a result, from the public interest in the topic, city staff is seeking guidance from the Planning Commission regarding the evaluation of parking regulations for recreational vehicles. Next Steps: Jacob Gonzalez stated Staff can certainly take this feedback from this meeting tonight, and we'll go back and do some homework about more of the statistics that we can collect on our own complaints, how we apply, how our code is administered, and begin to come up maybe in late 2023 and early 2024, at least maybe some options for us to look at. Do we want to be more lenient in some aspects? What are the consequences of that? Do we want to be more stringent? And what are the consequences of that based on whoever the community member might be, and then coordinate that with the various department staff that are impacted by this decision and come back to the planning commission with some general options and an evaluation back in early 2024 is certainly doable for us. ADJOURNMENT Chair Cochran stated with no other business, I recommend a motion to adjourn. Commissioner Campos made the motion to adjourn the meeting, it was seconded by Commissioner Lehrman. Passed unanimously. Meeting adjourned at 9:19 pm. YouTube link to watch full meeting: Pasco Planning Commission Meeting, July 20, 2023 - YouTube Respectfully submitted, Carmen Patrick, Administrative Assistant II Community & Economic Development Department MEMORANDUM TO PLANNING COMMISSION PLANNING COMMISSION MEETING City Hall – 525 North Third Avenue – Council Chambers DATE: THURSDAY, August 17, 2023 6:30 PM 1 TO: Planning Commission FROM: Jacob B. Gonzalez, Director SUBJECT: Draft Housing Action and Implementation Plan Background On June 27, 2023, city staff submitted the Draft Housing Action Plan to the Washington State Department of Commerce for review, in accordance with the requirements of RCW 36.70A.600. The Housing Action and Implementation Plan is a strategic plan to identify ways the City can meet its present and future housing needs for all households. The State legislature has implemented several policies to encourage housing supply including House Bill 1923 to make changes to zoning and development regulations. The City of Pasco has undertaken the HAP to better understand the housing challenges faced by city residents, workers, and employers, and how to best address them. The City’s population is estimated to reach 143,657 by the year 2045, an increase of more than 60,000 residents from todays population. Pasco’s total housing needs by 2045 will require more than 23,000 new homes by the 2045. Recommended Strategies The Housing Action Plan identifies the following strategies and actions based on key findings from the market analysis, housing needs assessment, and input from the community.  Strategy #1: Remove regulatory barriers and encourage the development of a variety of housing types.  Strategy #2: Increase opportunities for homeownership.  Strategy #3: Expand the supply and increase access to affordable housing.  Strategy #4: Build housing for Pasco’s special population groups.  Strategy #5: Mitigate displacement of vulnerable residents. The Draft Housing Action Plan is attached to the report for your review and recommendation. Staff is coordinating a fourth stakeholder workshop that will occur between the Planning Commission and Council action on the plan, to ensure that the recommended draft plan adequately addresses all comments received. 2 RECOMMENDATION MOTION: I move to close the public hearing on the Draft Housing Action and Implementation Plan and recommend the Pasco City Council adopt the Draft Plan as contained in the August 17, 2023 staff report. 0 City of Pasco Draft Housing Action Plan 2023 Oneza & Associates | EcoNorthwest | NYU Capstone Team 6-21-2023 City of Pasco Housing Action Plan - draft 1 INTRODUCTION .................................................................................................................................. 4 ORGANIZATION OF THE REPORT ................................................................................................................................... 4 CONTEXT ................................................................................................................................................................. 4 EXISTING HOUSING CONDITIONS .......................................................................................................... 5 WHO LIVE IN PASCO? ................................................................................................................................................. 5 WHAT ARE THE ECONOMIC CONDITIONS FOR HOUSING?.................................................................................................... 9 WHAT ARE THE CURRENT HOUSING CONDITIONS IN PASCO? ............................................................................................ 13 HOMELESSNESS ...................................................................................................................................................... 14 AFFORDABLE HOUSING PROGRAMS ............................................................................................................................ 15 DISPLACEMENT RISKS .............................................................................................................................................. 16 MARKET ASSESSMENT ....................................................................................................................... 21 OVERVIEW AND PURPOSE .......................................................................................................................................... 21 ECONOMIC CONDITIONS ........................................................................................................................................... 21 EMPLOYMENT GROWTH ............................................................................................................................................ 21 DEMOGRAPHIC PROFILE ........................................................................................................................................... 24 POPULATION AND HOUSEHOLDS ................................................................................................................................ 25 HOUSING PROFILE AND MARKET ASSESSMENT ............................................................................................................. 27 DEFINING AFFORDABLE HOUSING .............................................................................................................................. 28 HOUSING SUPPLY .................................................................................................................................................... 28 HOUSING COST ....................................................................................................................................................... 32 ASSETS, OPPORTUNITIES, AND CHALLENGES ...................................................................................... 46 HOUSING NEED PROJECTIONS ........................................................................................................... 47 POPULATION PROJECTIONS ...................................................................................................................................... 47 HOUSING NEED BY INCOME LEVEL .............................................................................................................................. 47 SUMMARY OF HOUSING NEEDS IN PASCO ............................................................................................ 48 WHO LIVES IN PASCO TODAY? ................................................................................................................................... 48 WHAT WILL PASCO’S FUTURE POPULATION LOOK LIKE? ................................................................................................ 48 WHAT ARE THE CURRENT HOUSING AFFORDABILITY CONDITIONS IN PASCO? .................................................................... 49 KEY FUTURE HOUSING TRENDS IN PASCO? .................................................................................................................. 50 HOUSING STRATEGIES AND ACTIONS .................................................................................................. 51 REFERENCES .................................................................................................................................... 54 APPENDICES ..................................................................................................................................... 54 Table of Contents City of Pasco Housing Action Plan - draft 2 Table of Exhibits Exhibit 1. Population Growth, Pasco and Franklin County, 2010-2021 .......................................... 4 Exhibit 2. Median Age, Pasco, Franklin County, and Washington, 2021 ........................................ 5 Exhibit 3. Change in Age Distribution, Pasco, 2010-2021 ............................................................... 6 Exhibit 4. Race and Ethnicity, Pasco, 2010-2020 ............................................................................ 7 Exhibit 5. Income by Race, Franklin County, 2010-2019 ................................................................ 7 Exhibit 6. Households in Pasco, 2010-2019 .................................................................................... 8 Exhibit 7. Households Family and Non-Family, Pasco, 2010-2020 ................................................. 9 Exhibit 8. Home-owners and Renters, Pasco, 2021 ........................................................................ 9 Exhibit 9. Unemployment Rate in Franklin County, Washington, and U.S, 2021 ......................... 10 Exhibit 10. Median Income in Franklin County, 2010 to 2019 ..................................................... 10 Exhibit 11. Median Income in Pasco, 2021 ................................................................................... 11 Exhibit 12. Cost Burdened Households - Renters, 2019 ............................................................... 11 Exhibit 13. Cost Burdened Households - Renters, 2010 and 2021 ............................................... 12 Exhibit 14. Cost Burdened Households - Owners, 2019 ............................................................... 12 Exhibit 15. Cost Burdened Households - Owners, 2019 ............................................................... 13 Exhibit 16. Housing Types, Pasco, 2021 ........................................................................................ 13 Exhibit 17. Age of Housing Units, Pasco 2021 .............................................................................. 14 Exhibit 18. Total Homeless People and homelessness Persons Per 1,000 Residents .................. 14 Exhibit 19. CDBG Allocation by Year ............................................................................................. 15 Exhibit 20. Percent of Individuals Living in Poverty by Race ........................................................ 17 Exhibit 21. Percent of Individuals Experiencing Poverty .............................................................. 18 Exhibit 22. Predominance Race/ Ethnicity by Census Tracts ........................................................ 18 Exhibit 23. Percent change in Non-Hispanic/Latino and White Population from 2011-2021 ...... 19 Exhibit 24. Percent change in Hispanic/Latino and/or Non-White Population from 2011-2021 . 19 Exhibit 25. Employment by Industry in Pasco, 2010 and 2019 .................................................... 22 Exhibit 26.Employment in Pasco and where Residents Work, 2019 ............................................ 24 Exhibit 27. Household Size, Pasco, 2019 and 2021 ....................................................................... 25 Exhibit 28. Age Distribution, Pasco, 2019 and 2021 ..................................................................... 26 Exhibit 29. Race and Ethnicity, Pasco, 2019 and 2021 ................................................................. 26 Exhibit 30. Housing Type in Pasco, 2021 ...................................................................................... 29 Exhibit 31. Number of Bedrooms, Pasco, 2021 ............................................................................ 29 Exhibit 32. Building Permits, 2010-2021 ....................................................................................... 30 Exhibit 33. Age of Housing Units, Pasco 2021 .............................................................................. 31 Exhibit 34. Vacancy Rate and Household Count, Pasco, 2021...................................................... 32 Exhibit 35. Median Zillow Home Value (ZHVI), Pasco and comparison cities, 2010-2022 ........... 33 Exhibit 36. Percent Change in Home Value (ZHVI), Pasco and comparison cities, 2010-2022 .... 33 Exhibit 37. Housing Costs and Income Trends, Pasco, 2020-2021 ............................................... 34 Exhibit 38. Housing Costs and Income Trends, Pasco, 2020-2021 ............................................... 35 Exhibit 39. Pasco Multifamily Rental Market Snapshot................................................................ 35 City of Pasco Housing Action Plan - draft 3 Exhibit 40. Multifamily Rent per Square Foot and Vacancy Rate, Pasco, 2011-2023 Q3 ............. 36 Exhibit 41. Multifamily Deliveries and Net Absorption, Pasco, 2011 -2023 Q3 ............................ 37 Exhibit 42. Homeownership Rates by Race/Ethnicity, 2021......................................................... 38 Exhibit 43. Renter Households, Pasco, 2010-2021 ....................................................................... 38 Exhibit 44. Renter Cost Burden, Pasco, 2010 and 2021 ............................................................... 39 Exhibit 45. Average Rent and Median Sale Price in Paso and related affordability, 2023 ........... 40 Exhibit 46. Housing Affordability in Pasco by AMI, 2023 .............................................................. 41 Exhibit 47. Housing Affordability in Franklin County by Industry and Wages, 2023 .................... 43 Exhibit 48. Housing Costs by Housing Prototype, 2023 ................................................................ 44 Exhibit 49. Housing Unit Costs by Housing Prototype, 2023 ........................................................ 45 Exhibit 50. Pasco Population Projections, 2020-2045 .................................................................. 47 Exhibit 51. Housing Needed by Income Level in Pasco by 2045 ................................................... 48 City of Pasco Housing Action Plan - draft 4 Introduction Pasco Housing Action Plan (HAP) is a strategic plan to identify ways the City can meet its present and future housing needs for all households. Pasco is one of the fastest growing cities in the Tri-Cities region. The City’s population is estimated to reach 121,828 in 2038 according to the Office of Financial Management. This will be a 52% increase from the City’s 2022 population of 80,180. The plan encourages the construction of affordable and market -rate housing to increase the supply of housing. The State legislature has implemented several policies to encourage housing supply including House Bill 1923 to make changes to zoning and development regulations. The City of Pasco is undertaking the HAP to better understand the housing challenges faced by city residents, workers, and employers, and how to best address them. Organization of the Report This document discusses three major components of a Housing Action Plan, existing housing conditions, market assessment, and need projections. Based on these analyses, recommended strategies and actions are identified. Additional analysis on existing housing conditions and displacement analysis have been performed by NYU Wagner Capstone Team and are available under appendices B and C. Public participation results are available in Appendix A. Context Both the City of Pasco and Franklin County experienced a rapid population growth between 2010 and 2021. Since 2010, Pasco saw its population grow by 32 percent or 18,919 people. This translates to an annual average growth rate (AAGR) of 2.53 percent for Pasco between 2010 and 2021. Similarly, Franklin County’s population grew by 26 percent or 20,187 people. Franklin County’s AAGR between 2010 and 2021 was slightly lower than Pasco at 2.11 percent. Overall, the City of Pasco makes up 80 percent of Franklin County’s total population in 2021. Exhibit 1. Population Growth, Pasco and Franklin County, 2010-2021 Source: Office of Finance and Management (OFM), ECONorthwest calculations 2010-2021 Change 2010 2020 2021 Number AAGR Pasco 59,781 77,108 78,700 18,919 2.53% Franklin County 78,163 96,749 98,350 20,187 2.11% Data sources The demographic and socioeconomic data was derived from US Census data for Pasco and the American Community Survey (ACS) 5-Year Estimates and. The ACS is a demographic survey City of Pasco Housing Action Plan - draft 5 distributed to American homes, designed to collect demographic data ranging from race to ability/disability. Using Franklin County census tracts, data was compiled to create a profile of the City of Pasco. Data from the Office of Financial Management (OFM) and Comprehensive Housing Affordability Strategy (CHAS) were also used. Existing Housing Conditions This section identifies Pasco’s existing housing conditions and future needs. This gi ves an overview of Pasco’s demographic conditions, housing inventory, growth, and employment trends. A detailed analysis on Pasco’s existing conditions is performed by New York University Wagner Capstone Team (Appendix A). This section evaluates demographic and economic conditions of the community. Who live in Pasco? Pasco’s population is relatively young Exhibit 2. Median Age, Pasco, Franklin County, and Washington, 2021 Source: American Community Survey (ACS) 2021 5-year estimates Pasco Franklin County Washington Median Age 29.9 30.5 37.9 ▪ Pasco’s population generally skews younger with a median age of 29.9. In comparison, Franklin County has a median age of 30.5 and Washington 37.9. Children (ages 0 to 17 years old) represent 33 percent of the population, while adults ages 18 to 64 make up about 58 percent. Senior adults (60 years and older) saw the fastest growth in this the past decade Between 2010 and 2021, Pasco had increased number of residents among seniors 65 years and older. Senior residents age 60 and older saw almost a 90 percent increase between 2010 and 2021. Although Pasco does not have a large senior population, this population cohort has rapidly grown over the past decade. City of Pasco Housing Action Plan - draft 6 Exhibit 3. Change in Age Distribution, Pasco, 2010-2021 Source: American Community Survey (ACS) 2010 and 2021 5-year estimates The Hispanic community continues to be a growing population group in Pasco ▪ Between 2010 and 2020, all race groups in Pasco have increased except for White non- Hispanic which decreased one percent. The majority of Pasco’s residents are Hispanic (55.5%) and White non-Hispanic (36.8%). ▪ In 2021, over half (56 percent) of Pasco’s population identified as Hispanic. Growth trends indicate that Pasco will continue to grow rapidly, and Hispanics will continue to be a majority ethnic group. City of Pasco Housing Action Plan - draft 7 Exhibit 4. Race and Ethnicity, Pasco, 2010-2020 Source: US Census Bureau. According to US Census, Hispanics may be of any race, so also are included in applicable race categories. Socio-economic gaps exist between Non-Hispanic White residents and Black and Hispanic residents ▪ Percentage of people living in poverty was highest among Hispanic (30%) in 2010, which has been reduced (22%) in 2019. The percentage of people living in poverty has been increased among Black of African American from 20% in 2010 to 27% in 2019. Non - Hispanic White has the decreasing trend from 9.4 % in 2010 to 7% in 2019. ▪ Pasco’s median household income is $70,486 according to 2021 census. Between 2010 and 2019, distribution of income is higher among White non-Hispanic compared to Hispanic, and Black or African American. Exhibit 5. Income by Race, Franklin County, 2010-2019 0.00%10.00%20.00%30.00%40.00%50.00%60.00% White (Non-Hispanic) Black or African American (Non-Hispanic) American Indian or Alaska Native (Non-Hispanic) Asian (Non-Hispanic) Native Hawaiian/Other Pacific Islander (Non- Hispanic) Some Other Race/Two or More Races (Non- Hispanic) Hispanic or Latino 2020 2010 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 Non-Hispanic White Hispanic or Latino Black or African American Citywide 2019 2010 City of Pasco Housing Action Plan - draft 8 ▪ Rates of college completion and attendance rose for Non-Hispanic White residents and Hispanic residents between 2010 and 2019. College completion is lower among Black or African American (15.3% and 6.4%). Overall, the lower educational attainment is a factor impacting long-run economic opportunity and mobility. Smaller households are increasing in Pasco ▪ Over the last decade or so, small households increased and large house holds decreased, suggesting that future home demand may be satisfied by smaller dwelling units. The number of one, two- or three-persons households have increased while the four-person household has decreased from 39% to 36% in the last decade. ▪ The average household size in Pasco has decreased from 3.32 in 2021 to 3.14 in 2022 (source: OFM) Exhibit 6. Households in Pasco, 2010-2019 Household make-up remains similar ▪ Various household types in Pasco such as family ((married and other), and non-family (living along and not living alone) remains the same in the last decade. Family constituting 76% and non-family constituting 24% of the total household types in 2020. 0 5 10 15 20 25 30 35 40 45 1 person 2 people 3 people 4 people 2010 2019 City of Pasco Housing Action Plan - draft 9 Exhibit 7. Households Family and Non-Family, Pasco, 2010-2020 Home ownership is higher among older population. ▪ Pasco had 74% of owner-occupied homes, and 26% renter occupied homes in 2021. Among all the homes, 61% is occupied by owners of 35 years or older. Exhibit 8. Home-owners and Renters, Pasco, 2021 What are the economic conditions for housing? Since 2010, unemployment rate has decline from a high of 10 percent in 2012, down to 6.6 percent in 2019. The COVID-19 pandemic of 2020 had an effect in jobs increasing the unemployment rate to 8.7 percent before quickly declining to 6.6 percent in 2021. In 2021 the unemployment rate was slightly higher in Franklin County compared to Washington and the State. Overall, labor market conditions are strong in Pasco with steady job growth and declining unemployment rate. 0 10 20 30 40 50 60 70 80 Family (married and other) Married Other family Non-family (living along and not living alone) Living alone Not living alone 2010 2020 13% 61% 11% 15% 0%10%20%30%40%50%60%70% Owner occupied 34 or under Owner occupied 35 and older Renter occupied 34 and under Renter occupied 35 and older City of Pasco Housing Action Plan - draft 10 Exhibit 9. Unemployment Rate in Franklin County, Washington, and U.S, 2021 Source: Employment Security Department/LMEA; U.S. Bureau of Labor Statistics, Local Area Unemployment Statistics Median income of Hispanic households was 76% of the Non-Hispanic White households Countywide ▪ Median household income in Pasco was $70,486 in 2021. Among various groups, median income is highest among Non-Hispanic White ($89,121). Hispanic households made 76% of the Non-Hispanic White households ($68095) in 2021. Overall income has increased among all groups in the last decade, but income disparities still remain. Increase in median income is highest among Hispanic households in the last decade. Exhibit 10. Median Income in Franklin County, 2010 to 2019 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 Non-Hispanic White Hispanic or Latino Black or African American Citywide 2010 2019 City of Pasco Housing Action Plan - draft 11 Exhibit 11. Median Income in Pasco, 2021 People earning 50% or less of the area median income (AMI) are mostly cost burdened. State and federal standards specify that households spending more than 30% of gross annual income on housing experience a housing cost burden. ▪ Approximately 64% of renters and 22% of owners are cost burdened in Pasco (Source: CHAS data year 2015- 2019). Exhibit 12. Cost Burdened Households - Renters, 2019 Cost burden among renters in Pasco have remained high since 2010 ▪ Although cost burden has remained a little over 50 percent since 2010, the share of renters that are severely cost burdened has declined over time from 29 percent in 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 Non-Hispanic White Hispanic or Latino Black or African American Citywide 0 500 1,000 1,500 2,000 2,500 3,000 Household Income <= 30% HAMFI Household Income >30% to <=50% HAMFI Household Income >50% to <=80% HAMFI Household Income >80% to <=100% HAMFI Household Income >100% HAMFI Cost burden > 30%Cost burden > 50% City of Pasco Housing Action Plan - draft 12 2010 down to 23 percent in 2021. This indicates that fewer renters are spending over 50 percent of their household income in housing costs. Exhibit 13. Cost Burdened Households - Renters, 2010 and 2021 Exhibit 14. Cost Burdened Households - Owners, 2019 Median renter incomes have grown but remain very low. ▪ Median renter incomes have grown in the past decade, however in 2021 median renter incomes were $38,588 compared to $86,676 for the median owner income. 29%23% 23%29% 0% 10% 20% 30% 40% 50% 60% 2010 2021 Renter Severely Cost Burden Cost Burden 0 200 400 600 800 1000 1200 1400 Household Income <= 30% HAMFI Household Income >30% to <=50% HAMFI Household Income >50% to <=80% HAMFI Household Income >80% to <=100% HAMFI Household Income >100% HAMFI Cost burden > 30%Cost burden > 50% City of Pasco Housing Action Plan - draft 13 Exhibit 15. Cost Burdened Households - Owners, 2019 What are the current housing conditions in Pasco? Single family homes dominate the housing stocks ▪ In the past five years, single-family dwelling units both attached and detached has been the pre-dominant housing types available in Pasco consisting about 80% of Pasco’s housing supply Exhibit 16. Housing Types, Pasco, 2021 0 20 40 60 80 100 120 2017 2018 2019 2020 2021 SFDU MF Mobile Home City of Pasco Housing Action Plan - draft 14 Majority of homes were built before 2010 Exhibit 17 shows the age of housing units in Pasco. The majority of Pasco’s housing units were built in the 1970’s and early 2000’s. Units built since 2010 make up a small share of Pasco’s total housing supply. Exhibit 17. Age of Housing Units, Pasco 2021 Source: 2021 ACS 5-year estimates Homelessness Visible homelessness has declined in Benton-Franklin Counties since 2006. Based on the point- in-time count1 in 2020, there were 190 persons without homes, most of whom are sheltered. Exhibit 18. Total Homeless People and homelessness Persons Per 1,000 Residents Source: bentonfranklintrends.org/graph.cfm?cat_id=7&sub_cat_id=4&ind_id=1 1 The Point-in-Time homeless count is an enumeration of sheltered and unsheltered people experiencing homelessness on a single Wednesday night in January. City of Pasco Housing Action Plan - draft 15 Student homelessness in Benton-Franklin Counties exist although has declined significantly since 2014. This is not visible as this is evident in the form of shared spaces (EWU, 2022) Affordable Housing Programs Down Payment Assistance program. Under the City of Pasco’s Community and Housing Improvement Program (CHIP), the City provides Down Payment Assistance (DPA) program to qualifying residents using Community Development Block Grants (CDBG). Under this program, the City will provide financing up to a $10,000, which enables a low to moderate income person(s) or family to purchase a vacant or owner-occupied home for sale within the Pasco city limits. The DPA program has seen reduction in funding due to HUD’s restrictions and cap on eligible sale prices of homes. The sales price should not exceed 95% of the current median purchase price for the area according to HUD’s eligibility requirements. In 2021, sales price for eligibility is $302,000, and the median home price is $336,093 in Pasco. As a result, the CDBG funding is being used in other community activities as shown in Exhibit 19 below. Exhibit 19. CDBG Allocation by Year Source: Consolidated Annual Performance Evaluation Reports (CAPERs) Habitat for Humanity. Tri-County Partners Habitat for Humanity (Habitat) serves Franklin, Benton, and western Walla Walla counties. Habitat for Humanity offers homeownership opportunities to families who are unable to obtain conventional house financing. Generally, this includes those whose income is 30 to 60 percent of the area’s median income. As part of the program, they contribute 500 hours of “sweat equity” on the construction of their home or someone else’s home (Habitat for Humanity, 2023). Since 1997, Habitat has built 37 homes in Pasco. City of Pasco Housing Action Plan - draft 16 DSHS support. Washington State Department of Social and Health Services offers services at the County level for persons with disabilities. In addition to various social services, DSHS programs include Housing and Essential Needs (HEN), Community Behavioral Health Rental Assistance (CBRA), and Shelter Plus Care program that serves persons in behavioral health services. The HEN Referral program provides access to essential needs items and potential housing assistance for low-income adults who are unable to work for at least 90 days due to a physical or mental incapacity and are ineligible for Aged , Blind, or Disabled (ABD) cash assistance. The CBRA provides permanent rental subsidy for high-risk individuals with behavioral health conditions and their households. DSHS currently serves 147 households at the County level under these programs. Displacement Risks Overview Displacement occurs when households are no longer able to remain in their homes due to rising housing cost. This may be a result of various factors such as redevelopment, major renovations, or housing costs increasing faster than what people can afford. Residents may be forced out due to physical conditions that render homes needing redevelopment by owners. In Pasco, costs of home ownership and rents have risen over the past years, leaving low -income residents within the City particularly vulnerable to negative housing outcomes. The housing market in Pasco as served by the private sector is likely to continue to cater to the higher end of the economic spectrum. This creates a gap between available and affordable housing choices. This trend eliminates the existing affordable housing options and reduces the ability for Pasco to grow in inequitable fashion. Types of displacement Three main types of displacements are generally observed. Physical displacement occurs if existing housing are subject to redeveloped and existing tenants are displaced. This occurs when the market becomes feasible for development or redevelopment, meaning a strong demand of housing can encourage property owners to upgrade existing rental properties. This includes displacement as a result of eviction, acquisition, rehabilitation, or demolition of property, or the expiration of covenants on rent- or income-restricted housing. Economic displacement can occur due to the inability of the households to afford rising rents or costs of homeownership like property taxes. When new developments of redevelopments in the vicinity rents or sells at a higher price, that encourages owners of existing units to increase rents, and these increases exceed what existing tenants can afford. Economic displacement can occur without redevelopment if the market has high demand and low supply of housing. Lower income groups are at higher risk of economic displacement. City of Pasco Housing Action Plan - draft 17 Cultural displacement occurs when residents move because the people, businesses and institutions that make up their cultural community have left the area. This affects ethnic minority households as the presence of their cultural assets play a significant role about where they would prefer to live, raise children and age. Low income and racially minority communities are at higher risk of cultural displacement. While physical displacement can be measured, economic and cultural displacements can be difficult to measure. Several indicators help identify the displacements such as percentage of people living in poverty, race and ethnicity of people living in poverty, concentrations of poverty, and changes of population overtime. Household income by race and ethnicity shown in Exhibit 5 indicates distribution of income is higher among White non-Hispanic compared to Hispanic, and Black or African American. Percentage of people living in poverty was highest among Hispanic (30%) in 2010, which has been reduced (22%) in 2019. In 2019, poverty increased among Black or African American population (Exhibit 20). Exhibit 20. Percent of Individuals Living in Poverty by Race (Higher percent indicated by darker shade of purple) Household Size 2010 2019 Non-Hispanic White 9.4 7 Hispanic or Latino 30.1 22.2 Black or African American 20.3 27 Citywide 21.1 16.3 In Exhibit 21, the area shown in darker shades of purple indicates higher concentration of poverty. Exhibit 22 indicates census tracts with predominant races. The City Center and East Pasco area consists of more Hispanic population that coincides with higher concentration of poverty (Exhibit 21). Exhibits 23 and 24 identify the areas in Pasco where population is changing for non-Hispanic White and Black, Indigenous, People of Color (BIPOC) population. These maps indicate a loss of population (non-Hispanic White and BIPOC) over a decade in the east side of the City including the City Center area. These are the areas with higher risks of displacement. Exhibits 25 and 26 identify areas in Pasco with change in share of non-Hispanic White and Black, Indigenous, People of Color (BIPOC) population. Exhibit 26 indicates a negative change in share for the City Center area for BIPOC population. Overall, this change in share has increased for this population group for the rest of the City except for a few areas where non -Hispanic White has an increase in share. See Appendix C for additional details. City of Pasco Housing Action Plan - draft 18 Exhibit 21. Percent of Individuals Experiencing Poverty (Higher percent indicated by darker shade of purple) Exhibit 22. Predominance Race/ Ethnicity by Census Tracts (Non-Hispanic White in Purple, Hispanic/Latino in orange) City of Pasco Housing Action Plan - draft 19 Exhibit 23. Percent change in Non-Hispanic/Latino and White Population from 2011-2021 (Source: Per US Census Bureau American Community Survey 5-Year Estimates (2006-2011 versus 2016-2021).) Exhibit 24. Percent change in BIPOC Population from 2011-2021 (Source: Per US Census Bureau American Community Survey 5-Year Estimates (2006-2011 versus 2016-2021) City of Pasco Housing Action Plan - draft 20 Exhibit 25. Change in Share of Non-Hispanic White Population from 2011-2021 (Source: Per US Census Bureau American Community Survey 5-Year Estimates (2006-2011 versus 2016-2021) Exhibit 26. Change in Share of BIPOC Population from 2011-2021 (Source: Per US Census Bureau American Community Survey 5-Year Estimates (2006-2011 versus 2016-2021) City of Pasco Housing Action Plan - draft 21 Market Assessment Overview and Purpose This section provides an analysis of Pasco’s housing and market assessment. The housing market assessment provides information about Pasco’s existing economic, demographic, and housing market which all affect the demand for and pricing for housing. The information provided in this report serves a foundation for policy recommendations to design implementable housing strategies for Pasco and to build the housing needed to accommodate future population growth. Economic Conditions This section discusses key components of Pasco’s economy, which affect the demand for and pricing of housing. The section summarizes Pasco’s employment trends, unemployment, and other labor market indicators. Key Findings ▪ Labor market conditions are strong in Pasco with steady job growth and declining unemployment rate. Pasco continues to diversity its economic base. ▪ Pasco experienced employment growth in retail trade, accommodation and food services, manufacturing and construction, and notable employment losses in health care and social assistance, educational services, and other services (excluding public administration). ▪ Unemployment rates indicate that Pasco has recovered to pre-COVID-19 conditions. Employment Growth Employment growth accompanied population growth in Pasco between 2010 and 2019, especially in the sectors of retail trade, accommodation and food services, manufacturing, and construction. Employment in the good producing category, in general, grew 60% from 2010 to 2019 and represents about a quarter of total employment. Service producing jobs make up the other nearly three quarters of Pasco jobs. Employment sectors of notable decline between 2010 and 2019 include health care and social assistance, educational services, and other services (excluding public administration). Education services is the principal employment concentration in Pasco, accounting for 16 percent of the jobs in the city, partly because of the Pasco School District and Columbia Basin College (CBC). Retail is the second largest concentration of jobs mostly driven by the rapid population growth and the Tri-Cities being southeast Washington’s regional economic center City of Pasco Housing Action Plan - draft 22 for retail trade. Food processing is the principal manufacturing activity in Pasco, accounting 12 percent of the overall jobs coming from the presence of the Lamb Weston com pany. Exhibit 27. Employment by Industry in Pasco, 2010 and 2019 Source: U.S. Census Bureau; OnTheMap Application and LEHD Origin-Destination Employment Statistics (2019); ECONorthwest Calculations 2010 2019 Percent Change Industry Number Percent Number Percent 2010-2019 Good Producing 3,669 19% 5,860 26% 60% Agriculture, Forestry, Fishing and Hunting 822 4% 1,229 5% 50% Mining, Quarrying, and Oil and Gas Extraction 2 0% 9 0% 350% Construction 1,232 7% 1,912 8% 55% Manufacturing 1,613 9% 2,710 12% 68% Service Producing 15,237 81% 16,810 74% 10% Utilities 169 1% 161 1% -5% Wholesale Trade 1,300 7% 1,413 6% 9% Retail Trade 2,019 11% 3,404 15% 69% Transportation and Warehousing 766 4% 1,054 5% 38% Information 143 1% 132 1% -8% Finance and Insurance 312 2% 329 1% 5% Real Estate and Rental and Leasing 277 1% 345 2% 25% Professional, Scientific, and Technical Services 586 3% 494 2% -16% City of Pasco Housing Action Plan - draft 23 2010 2019 Percent Change Industry Number Percent Number Percent 2010-2019 Administration & Support, Waste Management and Remediation 665 4% 748 3% 12% Educational Services 3,783 20% 3,739 16% -1% Health Care and Social Assistance 1,822 10% 1,351 6% -26% Arts, Entertainment, and Recreation 314 2% 368 2% 17% Accommodation and Food Services 1,097 6% 1,967 9% 79% Other Services (excluding Public Administration) 1,129 6% 595 3% -47% Public Administration 855 5% 710 3% -17% Total Employment 18,906 22,670 20% As indicated in Exhibit 10 and discussed under Existing Housing Conditions, unemployment rate has decline from a high of 10 percent in 2012, down to 6.6 percent in 2019. The COVID -19 pandemic of 2020 had an effect in jobs increasing the unemployment rate but it declined in 2021. Overall, labor market conditions are strong in Pasco with steady job growth and declining unemployment rate. Employment Trends Exhibit 28 shows the jobs that Pasco has and where residents work. Gaps exist between where residents work and the jobs that Pasco offers in the city. The education industries, wholesale trade, transportation, and utilities (WTU), retail, and manufacturing have more jobs in Pasco than residents working in those fields. In 2019, a large share of Pasco residents worked in the services, and construction and resources industries. City of Pasco Housing Action Plan - draft 24 Exhibit 28.Employment in Pasco and where Residents Work, 2019 Source: U.S. Census Bureau; OnTheMap Application and LEHD Origin-Destination Employment Statistics (2019) Demographic Profile Pasco’s demographic profile has been discussed under the Existing Housing Conditions section which provides a foundation context for the housing market analysis. The discussion below includes some additional data around population growth and forecast, household characteristics, and race and ethnicity. Key Findings Key highlights in Pasco’s demographic trends include: ▪ Pasco has experienced rapid population growth since 2010. Pasco’s population in 2021 was 78,700, representing a 32 percent increased (18,919 new residents) since 2010. ▪ Since 2010, adults 60 to 64 years and those 65 years and older had the fastest gro wth among age cohorts, increasing 98 percent and 81 percent respectively in Pasco. ▪ Since 2019, household size has shifted in Pasco. The majority of Pasco households are 3- or more person households. Between 2019 and 2021, 1-person households has declined, while 2-perosn households has increased. This could indicate general changes in household formations or possibly an indication of 1-person households City of Pasco Housing Action Plan - draft 25 struggling to afford housing in Pasco and need for rooming with a partner or roommate to lessen housing costs. Population and Households Population growth and household formation are the primary drivers of demand for housing. The rate of population growth and household characteristics heavily influence the demand for specific housing types. As discussed under the Existing Conditions section and in Exhibit 1, Pasco and Franklin County experienced a rapid population growth between 2010 and 2021. Since 2010, Pasco saw its population grow by 32 percent or 18,919 people. This translates to an annual average growth rate (AAGR) of 2.53 percent for Pasco between 2010 and 2021. Household Size The households in Pasco comprised of 3- or more persons make up 54% of the total households, more than 1-person and 2-person households combined. Between 2019 and 2021, there has been a considerable shift in the household size formation in Pasco. Most notably 2 - person households increased, while 1-person households and 3- or more person households decreasing slightly. This trend could suggest that there are some affordability challenges in Pasco for 1-person households. Exhibit 29. Household Size, Pasco, 2019 and 2021 Source: American Community Survey (ACS) 2019 and 2021 5-year estimates Household Size 2019 2021 1-person household 20% 18% 2-person household 25% 28% 3- or more person household 55% 54% Median Age Pasco’s population is very young, with a median age of 29.9 in 2021. In comparison, the median age for Washington was 37.9—about 8 years older than Pasco’s population. Age Distribution The age characteristics of a community indicate current needs and future trends for housing. Because different age groups have very different housing needs, housing demand correlates to the age of residents. For example, young adult households may choose to occupy apartments, condominiums, and small single-family homes because of affordability, location, and household size/presence of children. Middle-aged adults may prefer larger homes in which to raise families, while seniors may prefer smaller units that have lower costs, less maintenance, and are more proximate to services. City of Pasco Housing Action Plan - draft 26 Exhibit 30 below show the age characteristics of Pasco’s population. Overall, the age distribution of Pasco’s population seems to be similar to that in 2019. Pasco’s population generally tends to skew younger. Children ages 0 to 17 comprised the largest cohort of residents in Pasco followed by adults ages 18 to 64 making 57 percent of the city’s population. Overall, Pasco has maintained a relatively small population of senior adults age 65 years and older. However, senior residents age 60 and older has rapidly grown over the past decade (Exhibit 3). Exhibit 31. Age Distribution, Pasco, 2019 and 2021 Source: American Community Survey (ACS) 2019 and 2021 5-year estimates Age 2019 2021 0 to 17 years 33.6% 33.1% 18 to 29 years 16.3% 16.6% 30 to 39 years 15.5% 14.5% 40 to 49 years 12.1% 12.7% 50 to 59 years 9.0% 9.0% 60 to 64 years 4.2% 4.5% 65 years and over 8.5% 9.0% Race and Ethnicity Most of Pasco’s population (56% of residents) identify as Hispanic or Latino, while 37% identify as White. Pasco residents that identify as Black, Asian, and two or more races each make up about 2% of the remaining population. Between 2019 and 2021 Pasco’s race and ethnicity has remain about the same with some slight decrease in the populatio n that identifies as White. Exhibit 32. Race and Ethnicity, Pasco, 2019 and 2021 Source: American Community Survey (ACS) 2019 and 2021 5-year estimates Race/ Ethnicity 2019 2021 White 38% 37% Black 2% 2% American Indian or Alaskan Native 0% 0% Asian 2% 2% City of Pasco Housing Action Plan - draft 27 Race/ Ethnicity 2019 2021 Native Hawaiian or Pacific Islander 0% 0% Some other race 0% 0% Two or more races 2% 3% Hispanic 56% 56% Housing Profile and Market Assessment This section summarizes Pasco’s housing market. It examines housing supply and availability, development trends, and affordability of ownership and rental housing. A housing profile and housing market analysis are important for understanding housing affordability and demand because they provide valuable information about the current state of the housing market, including the supply of housing units, average cost of rent or homeownership, and demographics of the area, which can help predict future housing d emand and need. Projecting future housing need is important to ensure that Pasco is planning ahead to ensure that it is providing housing at all income-levels for its population—especially those with lower incomes. Key Findings Key trends in the housing market include: ▪ Homeownership rates have steadily increased in the past decade in Pasco. Generally, homeownership rates have increased from 65 percent in 2011 up to 69 percent in 2021. In Washington, homeownership rates have generally decline from 64 percent down to 63 percent. ▪ Cost burden among renters in Pasco have remained high since 2010. Although cost burden has remained at 52 percent since 2010, the share of renters that are severely cost burdened has declined over time from 29 percent in 2010 down to 23 percent in 2021. This indicates that fewer renters are spending over 50 percent of their household income in housing costs. ▪ Low housing vacancy rates and high demand for housing has strained Pasco’s housing market with large increases in housing prices. Since 2010, the median home value in Pasco has increased 137 percent or $222,928, from $162,962 in 2010 up to $385,900 in 2022. ▪ Household incomes have not kept pace with the rising costs for homeownership. Between 2010 and 2021, the median household income has increased 58 percent, City of Pasco Housing Action Plan - draft 28 while the median home value in Pasco has increased 106 percent. This significant increase in homeownership costs have left many unable to purchase a home. ▪ Shifts in incomes has continued to strain renter households in Pasco. Renters and owners both experienced income growth between 2010 and 2021, but the magnitude of the changes differs by tenure. In 2021, the median renter income in Pasco was $38,588, compared to the median owner income of $86,676. ▪ Household incomes have generally kept pace with the rising rents. Between 2010 and 2021, median rents increased 44 percent, while household incomes increased 58 percent. As households struggle to purchase a home, demand for rental units will increase and potentially see large rent increases to accommodate the growing demand. This also emphasizes the importance of constructing new rental units to support the growing demand specially for lower income households. ▪ In 2023, a Pasco household would need an annual income of at least $96,500 to be able to afford the median home sale price of $386,000. Defining Affordable Housing Housing affordability refers to the degree to which a household or individual can afford to pay for housing without experiencing financial hardship or sacrificing oth er essential needs. According to the US Department of Housing and Urban Development (HUD), affordable housing refers to a residence that a household or family can acquire - either through buying, renting, or other methods - that requires payment of no more than 30% of the household's income. Typically households paying more than 30 percent of their income for housing is considered “cost burdened”, while households paying more than 50 percent for housing are “severely cost burdened.” Housing Supply According to the American Community Survey (ACS), Pasco has 23,921 housing units as of 2021. Exhibit 33 shows that single-dwelling detached homes make up the vast majority of housing units in Pasco. Multi-dwellings with 5 or more units make the second largest share of housing type in Pasco—which make up 12 percent. Single-dwelling attached homes make up the smallest share of housing in Pasco. City of Pasco Housing Action Plan - draft 29 Exhibit 33. Housing Type in Pasco, 2021 Source: American Community Survey (ACS) 2021 5-year estimates Note: Manufactured homes were categorized as single-dwelling detached homes Housing Type Total Precent Single-dwelling detached 18,516 77% Single-dwelling attached 1,211 5% Multi-dwelling (2-4 units) 1,341 6% Multi-dwelling (5+ units) 2,853 12% Other 0 0% Total 23,921 100% Number of Bedrooms With single family detached units as the most common type of housing, it is not surprising that most dwelling units in Pasco have 3 and 4-bedrooms. A small percentage of Pasco’s housing stock are studios (no bedroom) or 1-bedrooms. This indicates that most of the single dwelling and multi-dwelling units in Pasco are supportive of family households, with a very small share of units supportive for single residents. This limits the pool of units that single households or couples could obtain in Pasco’s housing market. Exhibit 34. Number of Bedrooms, Pasco, 2021 Source: American Community Survey (ACS) 2021 5-year estimates Number of Bedrooms Total Precent No bedroom 782 3% 1 bedroom 1,565 7% 2 bedrooms 4,137 17% 3 bedrooms 11,133 47% 4 bedrooms 4,863 20% 5 or more bedrooms 1,441 6% City of Pasco Housing Action Plan - draft 30 Development Trends Exhibit 35 shows trends in residential budling permits. Single-dwelling units have been the dominant type of housing permitted in Pasco in the past decade, while limited multi -dwelling units have been permitted overall. Development trends show that Paco’s housing market rebounded quickly after the 2008 Great Recession with several housing units permitted in 2010. Figures reveal that after 2010 there was a considerable drop in residential building permits through 2015, and have picked up in 2015. Although residential permitting has been increasing in recent years, it has not been to the same volume seen in 2010. Exhibit 35. Building Permits, 2010-2021 Source: HUD SOCDS Building Permits Database Exhibit 178 shows the age of housing units in Pasco. The majority of Pasco’s housing units were built in the 1970’s and early 2000’s. Units built since 2010 make up a small share of Pasco’s total housing supply. 0 100 200 300 400 500 600 700 201020112012201320142015201620172018201920202021Building PermitsSin gle-dwelling u nit 2-unit mu lti-dwelling unit 3- an d 4-u nit multi-d welling u nit Mu lti-dwelling (5+ Units) City of Pasco Housing Action Plan - draft 31 Exhibit 36. Age of Housing Units, Pasco 2021 Source: 2021 ACS 5-year estimates Housing Vacancy Vacancy is a measure of the availability of housing units in a given area. When there are more vacant units than there are people looking for a place to live, it can lead to lower rents and other housing costs. This can make housing more affordable for people who are looking for a place to live. On the other hand, when there is a low vacancy rate and a high demand for housing, it can lead to higher rents and other housing costs. This can make housing less affordable for people who are looking for a place to live. Therefore, vacancy rates can have a significant impact on housing affordability in an area. Exhibit 37 shows trends in vacancy rate for Pasco in the past decade. Since 2010, vacancy rate in Pasco has declined from a high of 8 percent in 201 0 down to 3.8 percent in 2017. The vacancy rate has increased slightly since 2017 to 4.5 percent in 2021. Generally, household count has increased in Pasco since 2010, while the number of occupied households has increased in line with the household growth . City of Pasco Housing Action Plan - draft 32 Exhibit 37. Vacancy Rate and Household Count, Pasco, 2021 Source: 2010-2021 ACS 5-year estimates Housing Cost Housing costs is a direct relationship of housing accessibility to all economic segments of the community. In general, if housing supply exceeds housing demand, housing prices will decrease. If housing demand exceeds housing supply, housing prices typically increase. The availability of housing—which is measured by vacancy rates—can also affect housing cost. Between 2010 and 2022 housing prices have significantly increased in Pasco and across the region. Exhibit 38 shows the median priced home of Pasco and a few comparison cities. These comparison cities were selected because they share similar characteristics to Pasco such as population and proximity. The median priced home in Paso increased from roughly $163,000 in 2010 to $386,000 in 2022. Since 2010, Pasco’s housing market increased at a similar rate in relation to the other comparison cities. 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 0 5,000 10,000 15,000 20,000 25,000 30,000 201020112012201320142015201620172018201920202021VacancyHouseholdsVacan cy Rate Total H ou seh olds Occup ied H ou seh olds City of Pasco Housing Action Plan - draft 33 Exhibit 397. Median Zillow Home Value (ZHVI), Pasco and comparison cities, 2010-2022 Source: Zillow Exhibit 408 shows that since 2010, the median sale price of a home has increased in all comparison cities, with the most significant increase in Pasco (137%), followed by Kennewick (130%) and Walla Walla (108%). Exhibit 408. Percent Change in Home Value (ZHVI), Pasco and comparison cities, 2010-2022 Source: Zillow, ECONorthwest Calculations Change (2010-2022) Jurisdiction 2010 2022 Number Percent Pasco $162,962 $385,890 $222,928 137% Kennewick $172,979 $397,351 $224,372 130% Richland $210,516 $433,308 $222,792 106% Yakima $155,888 $321,113 $165,225 106% Walla Walla $185,704 $386,272 $200,568 108% City of Pasco Housing Action Plan - draft 34 Between 2010 and 2021, the median rent increased by 44% and median household income (unadjusted) increased by 58%. This denotes that household income has increased faster than rents. This is particularly good because it suggests that Pasco residents have benefitted from the regional economy with growing wages while still affording rental housing. However, rental units consider all rental units including older constructions, as well as single family rentals. This has skewed down the median rent of newer multi-family apartments. Rent in the newly constructed multi-family apartments are higher than median rent and has increased at a similar pace with median household income for renters. This makes renting newer units still challenging. However, that is not the case when it comes to being able to afford to purchase a home. Between 2010 and 2021, home values increased by 106 percent—putting homeownership far beyond what several households could afford. Exhibit 41. Housing Costs and Income Trends, Pasco, 2020-2021 Source: 2010 and 2021 ACS 5-year estimates 2010-2021 Change 2010 2021 Number Percent Median Rent $688 $993 305 44% Median Home Value $162,992 $336,093 $173,130 106% Median Household Income (unadjusted) $44,659 $70,486 $25,827 58% Although median incomes have risen across both renter and owner households, the median income of a renter household remains substantially lower than both Pasco’s median household income of $70,486 in 2021 and the median homeowner income of $86,676. This in dicates that renter households are most vulnerable to price changes in the rental market and in greater need for affordable housing that they can afford. City of Pasco Housing Action Plan - draft 35 Exhibit 42. Housing Costs and Income Trends, Pasco, 2020-2021 Source: 2010 and 2021 ACS 5-year estimates Exhibit 43 shows a snapshot of Pasco’s multifamily rental market. As of 2023 Q1, Pasco had approximately 2,104 multifamily rental units across 28 buildings. In the first quarter of 2023 there was no multifamily projects in the pipeline or under construction. The average rent per unit was 1,280 or $1.45 per square foot. Exhibit 43. Pasco Multifamily Rental Market Snapshot Source: CoStar Inventory (buildings) Units Inventory Avg. SF Under Construction Avg. Rent per SF Avg. Rent per Unit Vacancy Rate Pasco 28 2,104 909 0 $1.45 $1,280 9.0% According to Costar, the multifamily rental market in Pasco was stable with an overall vacancy rate of 9.0 percent as of 2023 Q1. The multifamily market was tight, with a vacancy rate of 4.3 percent during the first quarter of 2022. In the first quarter of 2023, approximately 108 multifamily units were delivered to the market, which pushed the overall vacancy rate up in 2023 Q1. Since 2011, Pasco’s multifamily market has seen rent growth of 61 percent of $0.55 per square foot. City of Pasco Housing Action Plan - draft 36 Exhibit 44. Multifamily Rent per Square Foot and Vacancy Rate, Pasco, 2011 -2023 Q3 Source: CoStar Exhibit 42 shows Pasco’s rent per square-feet for apartment buildings compared to vacancy rate. The sharp increase of vacancy rate in 2019-2020 is mainly attributed to the pandemic when many people moved out of their apartments. The phenomenon started to normalizes after the pandemic with a decrease in vacancy rate and then an increase in vacancy rate in the recent years due to some recent constructions and availability of new rental units in the market. Exhibit 45 shows multifamily deliveries and net absorption in Pasco. Multifamily deliveries refer to the new units built in the market, while net absorption refers to the net difference between the number of units leased and the number of units vacated d uring a specific period of time. Since 2011, there was a total of 534 units absorbed and 629 units delivered in Pasco’s market. All new units delivered seem to be absorbed (leased up) by the market pretty quickly indicating a strong demand of multifamily. City of Pasco Housing Action Plan - draft 37 Exhibit 45. Multifamily Deliveries and Net Absorption, Pasco, 2011-2023 Q3 Source: CoStar Exhibit 46 shows homeownership rates by race and ethnicity in Pasco. When compared to Washington and the US, Pasco generally has above average homeownership rates for almost all races and ethnicities—except for American Indian or Alaska Native. Overall, the homeownership has increased in Pasco from 64 percent in 2010 up to 69 percent in 2021. Housing has generally been affordable in Pasco, however, in recent years median home values have increased substantially, reducing ability of many households to purchase a home. City of Pasco Housing Action Plan - draft 38 Exhibit 46. Homeownership Rates by Race/Ethnicity, 2021 Source: 2021 ACS 5-year estimates In most jurisdictions, a significant share of households rent, underscoring the importance of quality affordable rental housing. Jurisdictions where few households rent compared to the state may want to consider increasing the stock of rental housing in the jurisdiction. Exhibit 47 shows the share of households who rent. Since 2010, the share of Pasco households who rent have declined over time from 36 percent of households renting in 2010 down to 31 percent in 2021. This decline in renter households could suggest that the cost of owning a home within the city has become relatively more affordable than renting. Exhibit 47. Renter Households, Pasco, 2010-2021 Source: 2010, 2019, and 2021 ACS 5-year estimates 36% 31%31% 0% 5% 1 0% 1 5% 2 0% 2 5% 3 0% 3 5% 4 0% 4 5% 2 01 0 201 9 2 02 1 Pasco Rente r-occupie d City of Pasco Housing Action Plan - draft 39 Cost Burden State and federal standards specify that households spending more than 30% of gross annual income on housing experience a housing cost burden. Housing cost burdens occur when housing costs increase faster than household income. When a household spends more than 30% of its income on housing costs, households have less disposable income for other necessities, including health care, food, and clothing. In the event of unexpected circumstances such as the loss of employment or serious health problems, lower income households with a burdensome housing cost are more likely to become homeless or be forced to double -up with other households. Homeowners with a housing cost burden have the option of selling th eir homes and become renters. Renters, on the other hand, are more vulnerable and subject to constant changes in the housing market. Exhibit 48 shows housing cost burden for renter households, Since 2010, the share of cost burdened renters has continued to be over 50 percent. Although the share of cost burdening has not changed much, the share of renters that are severely cost burdened has declined over time, while those cost burdened has increased. Exhibit 48. Renter Cost Burden, Pasco, 2010 and 2021 Source: 2010 and 2021 ACS 5-year estimates 29% 23% 23%29% 0% 10% 20% 30% 40% 50% 60% 2010 2021 Renter Severely Cost Burden Cost Burden City of Pasco Housing Action Plan - draft 40 Housing Attainability Exhibit 47 shows the average rent and median home sale price in Pasco in Q1 of 2023. With an average rent of $1,272, a household would have to make $50,880 or more to afford the average rent in Pasco. In comparison, with a median home sale price of $386,000, a household would have to make $96,500 or more to comfortably afford the median home price in Pasco. Exhibit 49. Average Rent and Median Sale Price in Paso and related affordability, 2023 Source: CoStar, Redfin, ECONorthwest Calculations Exhibit 50 illustrates projected housing affordability based on household income . The median family income for Pasco— in 2022 was $89,600 (100% of area median income); this figure is based on HUD’s calculation for Franklin County’s median family income. The estimates presented in Exhibit 501 are based on income and affordability ratios that typical lending banks use. They do not consider other household financial characteristics that can affect ability to pay for housing – other debt, including auto loans, credit cards, etc. as well as accumulated assets. A key challenge many lower incomes households face is competition for affordable housing from higher income households. It is rational for higher income households to choose less expensive housing if it is available and meets household needs 2. Given entry costs (down payment for owner units, advance rent, and deposits for rental units) and required credit reports, lower income households have clear disadvantages in competing for lower cost housing. 2 https://www.strongtowns.org/journal/2021/4/27/are-new-homes-mostly-luxury-does-it-matter-if-they-are City of Pasco Housing Action Plan - draft 41 Based on the information above about the average rent and median home prices in Pasco, a household earning 100 percent of the Area Median Income (AMI) in 2023 could not afford to purchase the median home priced home in Pasco. However, this household could afford the average rent in Pasco. This highlights four key takeaways playing out in Pasco’s dynamic housing market: ▪ Pasco has an affordability gap between home prices and rental costs. While the household’s income allows them to cover the average rent, it falls short when it comes to purchasing a home at the median price. This suggest that the costs of purchasing a home is relatively higher than renting in Pasco’s current housing market. ▪ Pasco has an income disparity. While a household earning 100 percent of the area median income can afford the average rent, they cannot afford to purchase a home at the median price. This suggest that higher income households likely have a better change of homeownership, while lower and median-income households might be limited to renting. ▪ Potential barriers to homeownership exist. The inability of a moderate-income household to afford the median priced home raises questions about the potential barriers to homeownership in Pasco. Factors such as high down payment requirements, stricter mortgage lending criteria, and rising home prices relative to income growth can make it difficult for many households to enter the homeownership market. ▪ Increasing the supply of both renter and ownership product units is important for Pasco in the long-term. If the demand for housing, particularly for homeownership, exceeds the available supply, it can drive up home prices and make it challenging for households with moderate incomes to purchase a home. Similarly, if the demand for rental housing exceeds the available supply, it can drive up rent prices and price out households that rent in Pasco. Exhibit 50. Housing Affordability in Pasco by AMI, 2023 Source: HUD, ECONorthwest Calculations If your household earns: $26,300 $52,500 $70,000 $87,500 $105,000 < 30% of MFI 60% of MFI 80% of MFI 100% of MFI 120% of MFI Then they can afford: $660 Per Month $1,310 Per Month $1,750 Per Month $2,190 Per Month $2,630 Per Month OR OR OR OR OR $158,000- $184,000 Home Sale Price $245,000- $280,000 Home Sale Price $306,000- $350,000 Home Sale Price $368,000- $420,000 Home Sale Price City of Pasco Housing Action Plan - draft 42 Worker affordability Exhibit 48 shows the average wages by industry in Franklin County and the maximum rent and median home price that workers in each industry could afford. More than half of the industries in Franklin County have high enough wages that can afford the average rent of $1,272 in Pasco. However, only one industry, the information industry, has a high enough wage to afford the median home price of $386,000 in Pasco. Pasco’s employment is concentrated in educational services and retail trade. Based on the average wages earned in Franklin County 2021, workers in these industries cannot afford the average rent or the median priced home in Pasco. A select number of industries can support to afford the median home priced home if they 1.5 times per household. These industries include construction, wholesale trade, information, finance and insurance, professional and technical services, and government. 43 Exhibit 51. Housing Affordability in Franklin County by Industry and Wages, 2023 Source: OFM, ECONorthwest Calculations Industry Annual Average Wage Max Affordable Rent Can Afford the Average Rent Max Affordable Home Price Can Afford Median Home Price in Pasco Can Afford Median Home Price with 1.5 Earners per household? All Industries $49,736 $1,243 No $186,648 No No Ag., forestry, fishing & hunting $36,126 $903 No $135,573 No No Mining $60,000 $1,500 Yes $225,169 No Yes Construction $57,717 $1,443 Yes $216,601 No Yes Manufacturing $53,653 $1,341 Yes $201,351 No No Wholesale trade $66,555 $1,664 Yes $249,767 No Yes Retail trade $42,457 $1,061 No $159,331 No No Transportation & warehousing $53,656 $1,341 Yes $201,359 No No Information $109,235 $2,731 Yes $409,939 Yes Yes Finance and Insurance $71,792 $1,795 Yes $269,423 No Yes Real Estate & Rental & Leasing $51,268 $1,282 Yes $192,400 No No Professional & Technical Services $59,876 $1,497 Yes $224,703 No Yes Administrative & Waste Services $43,787 $1,095 No $164,326 No No Educational Services $42,118 $1,053 No $158,062 No No Health Care & Social Assistance $45,692 $1,142 No $171,472 No No Art, Entertainment, & Recreational $37,732 $943 No $141,601 No No Accommodation & Food Services $23,462 $587 No $88,048 No No Government $64,056 $1,601 Yes $240,390 No Yes Housing Unit Costs This section summarizes housing cost, which is the construction costs associated with building housing in Pasco. Understanding housing costs provides critical information for what is being built in the local housing market and what household could afford. If the type of housing built far exceeds what households could afford, then Pasco could look into its zoning code, housing policies, and other policy interventions to shape the private market to build housing that could be built more affordable. Utilizing building permit data from the City of Pasco, construction costs were derived from different housing types recently built in Pasco. Using information from these recently built housing types ensures that the construction costs derived are the most up to dat e given trends in the national economy where development has slowed because of the rising interest rates nationwide. Exhibits 50 and 51 show the costs by housing prototype. Generally, construction costs range between $175 to $185 per square feet to build attached townhomes and single-family homes. There are economies of scale building larger buildings that contain multiple units such as sixplexes and apartments. This is reflected in the cost per square feet and the total development costs per unit. Exhibit 52. Housing Costs by Housing Prototype, 2023 Source: ECONorthwest Calculations, City of Pasco Permits Note: Total development costs assumes a 10% developer profit on the overall construction cost Housing Type Unit s SF per Unit Total SF Cost per SF Total Const. Costs Land Cost Fees Total Dev. Costs Dev. Costs per Unit Single family 1 2000 2,000 $185 $369,800 $75,000 $10,174 $491,972 $491,972 Home+ADU 3 1500 4,500 $185 $832,050 $75,000 $5,615 $995,889 $331,963 Townhomes 4 1500 6,000 $175 $1,048,838 $75,000 $28,782 $1,257,521 $314,380 Sixplex 6 1250 7,500 $175 $1,311,048 $75,000 $38,554 $1,555,724 $259,287 Apartments 10 1000 10,00 0 $150 $1,500,000 $75,000 $59,498 $1,784,513 $178,451 With scales of economies there is also an efficient use of land where in certain residential zones additional housing units could be built with the same amount of land zoned for single-family homes. Missing middle housing can support greater housing options, affordability, neighborhood revitalization, efficient land use, social cohesion, and environmental sustainability. By providing diverse and affordable housing c hoices, promoting community interaction, and maximizing land use, missing middle housing contributes to inclusive and vibrant neighborhoods, supports economic activity, and addresses housing affordability challenges while reducing environmental impacts. Exhibit 53. Housing Unit Costs by Housing Prototype, 2023 Assets, Opportunities, and Challenges This section will highlight key locational factors that influence Pasco’s desirability for a range of land uses that play a crucial role in the City’s economy. Assets Barriers and Constraints ▪ Transportation Access & Network: Pasco is located at the intersection of major highways, railways, and waterways, making it a transportation hub in the region. This proximity to transportation networks is an important factor that makes Pasco a desirable location for industrial and commercial land uses. ▪ Natural Resources: Pasco is located in an agricultural region, and the city benefits from access to natural resources, such as water and fertile soil. This makes it an ideal location for agricultural land uses, such as farming and food processing. ▪ Workforce: Pasco has a diverse and well- educated workforce, employment is concentrated in the manufacturing, healthcare, and retail sectors. This availability of skilled labor makes it an attractive location for companies that require a highly skilled workforce. ▪ Proximity to other major cities: Pasco, Washington is located within close proximity to other major cities, such as Seattle, Portland, and Spokane. This makes it an ideal location for companies that need to access these markets while benefiting from Pasco's lower cost of living and business-friendly environment. ▪ Housing Affordability: Pasco has generally had a low cost of living compared to other cities in the region, however demand for housing has driven up prices in recent years. Increasing affordability challenges could pose as a barrier for attracting a strong workforce to the area. ▪ Limited cultural and entertainment: While Pasco has several quality of life amenities, such as parks and recreational areas, it does not have the same level of cultural and entertainment options as larger cities. This could make it difficult for companies to attract and retain younger workers who are looking for a vibrant and diverse cultural scene. ▪ Higher Education: while Pasco has several community colleges and vocational schools, it does not have a major university or research institution. This could limit the ability of companies to access a highly educated workforce and could make it difficult to attract companies that require access to cutting- edge research and development. Housing Need Projections Population Projections Pasco’s Comprehensive Plan update assumes that population will continue to grow rapidly in the future. Based on OFM’s 2017 GMA Projections (Medium Series), Franklin County is estimated to grow to 179,572 people by 20453. Assuming that Pasco’s population will continue to make up about 80 percent of the County’s population, Pasco is estimated to grow to 143,657 people by 2045. Between 2020 and 2045 Pasco will need to accommodate 66,549 new residents. The following section discusses how many housing units Pasco needs to accommodate this growth by income level. Exhibit 54. Pasco Population Projections, 2020-2045 Source: OFM, ECONorthwest Calculations Change (2020-2045) Jurisdiction 2020 2045 Number Percent Pasco 77,108 143,657 66,549 86% Franklin County 96,749 179,657 82,823 86% Housing Need by Income Level Pasco’s housing need by income level is based on HUD CHAS household income distribution. Assuming that Pasco’s current income distribution will remain the same by 2045, the future housing need is distributed according to Pasco existing household income distribution. Under this assumption, 11,542 housing units or 50% of Pasco’s total need through 2045 are needed for households who make 80% or less of the area median income. About 11,776 units or 50% of the total need are needed for households with incomes of 80% of AMI or higher. Pasco’s total housing need by 2045 totals 23,318 housing units. Of these units, 21,585 is needed to accommodate population growth and 1,733 units that have been underproduced by the housing market relative to National housing trends. Exhibit 53 indicates housing needs by different income groups. According to this table, the highest housing underproduction, or the higher housing need is shown among groups with 0% to 50% AMI. 3 ECONorthwest calculation based on OFM 2017 GMA Projections – Medium Series utilizing the 2.52 AAGR between 2017 and 2038 for Franklin County. Exhibit 55. Housing Needed by Income Level in Pasco by 2045 Source: OFM, CHAS 2015-2019, ECONorthwest Calculations Income Category Underproduction Need Total Need Share 0-30% AMI 800 2,484 3,284 14% 30-50% AMI 590 2,905 3,495 15% 50-80% AMI 295 4,468 4,763 20% 80-100% AMI 11 2,123 2,134 9% 100-120% AMI 37 2,351 2,388 10% 120-140% AMI 0 1,474 1,474 6% 140%+ AMI 0 5,780 5,780 25% Total 1,733 21,585 23,318 100% Summary of Housing Needs in Pasco Who Lives in Pasco Today? ▪ Pasco has a relatively young population. Pasco’s population generally skews younger with a median age of 29.9. In comparison, Franklin County has a median age of 30.5 and Washington 37.9. Children (ages 0 to 17 years old) represent 33 percent of the population, while young adults ages 18 to 39 make up about 31 percent. ▪ Senior adults (60 years and older) saw the fastest growth in this the past decade. Seniors age 60 and older saw almost a 90 percent increase between 2010 and 2021. Although Pasco does not have a large senior population, this population cohort has rapidly grown over the past decade. ▪ The Hispanic community continues to be a growing population group in Pasco. In 2021, over half (56 percent) of Pasco’s population identified as Hispanic. Growth trends indicate that Pasco will continue to grow rapidly, and Hispanics will continue to be a majority ethnic group. ▪ Socio-economic gaps exist between Non-Hispanic White residents and Black and Hispanic residents. Between 2010 and 2019, distribution of income has been higher among White non-Hispanic compared to Hispanic, and Black or African American. Median income of Hispanic households was 76% of the Non-Hispanic White households Countywide ▪ Median renter incomes have grown but remain very low. Median renter incomes have grown in the past decade, however in 2021 median renter incomes were $38,588 compared to $86,676 for the median owner income. What will Pasco’s Future Population Look like? ▪ Pasco’s population is projected to grow by 86 percent by 2045. From 2020 to 2045, Pasco’s population will increase from an estimated population of 77,108 in 2020 to 143,657 in 2045. This estimate assumes that Pasco will continue to make about 80 percent of the total County population in 2045 when Franklin’s population is projected to be 179,657 based on OFM 2017 GMA County projections. ▪ In the next 20 years, Pasco’s children and young adults will age and will need housing that meet the needs of older households. ▪ The share of Pasco’s senior residents is increasing and will need housing that meet the needs of older households. ▪ Pasco’s future households will majority be family sized with 3 or more-person household, however, there will be a need for 1-person housing units to accommodate a growing share of these households. What Are the Current Housing Affordability Conditions in Pasco? ▪ Pasco has an affordability gap between home prices and rental costs. While the household’s income allows them to cover the average rent, it falls short when it comes to purchasing a home at the median price. This suggest that the costs of purchasing a home is relatively higher than renting in Pasco’s current housing market. ▪ Pasco has an income disparity. While a household earning 100 percent of the area median income can afford the average rent, they cannot afford to purchase a home at the median price. This suggest that higher income households likely have a better change of homeownership, while lower and median-income households might be limited to renting. ▪ Potential barriers to homeownership exist. The inability of a moderate-income household to afford the median priced home raises questions about the potential barriers to homeownership in Pasco. Factors such as high down payment requirements, stricter mortgage lending criteria, and rising home prices relative to income growth can make it difficult for many households to enter the homeownership market. ▪ Increasing the supply of both renter and ownership product units is important for Pasco in the long-term. If the demand for housing, particularly for homeownership, exceeds the available supply, it can drive up home prices and make it challenging for households with moderate incomes to purchase a home. Similarly, if the demand for rental housing exceeds the available supply, it can drive up rent prices and price out households that rent in Pasco. ▪ Cost burden among renters in Pasco have remained high since 2010. Although cost burden has remained at 52 percent since 2010, the share of renters that are severely cost burdened has declined over time from 29 percent in 2010 down to 23 percent in 2021. This indicates that fewer renters are sp ending over 50 percent of their household income in housing costs. ▪ Low housing vacancy rates and high demand for housing has strained Pasco’s housing market with large increases in housing prices. Since 2010, the median home value in Pasco has increased 137 percent or $222,928, from $162,962 in 2010 up to $385,900 in 2022. ▪ Household incomes have not kept pace with the rising costs for homeownership. Between 2010 and 2021, the median household income has increased 58 percent, while the median home value in Pasco has increased 106 percent. This significant increase in homeownership costs have left many unable to purchase a home. As households struggle to purchase a home, demand for rental units will increase and potentially see large rent increases to accommodate the growing demand. This also emphasizes the importance of constructing new rental units to support the growing demand specially for lower income households. ▪ Housing affordability is a rising challenge in Pasco and region. In 2023, a Pasco household would need an annual income of at least $96,500 to be able to afford the median home sale price of $386,000. Key Future Housing Trends in Pasco Future Demographic Shift What Type of Housing is Needed? More middle-aged Millennials ▪ Homeownership of Millennials will increase ▪ Demand for ownership product type will increase near amenities for families Increasing Number of People age 60+ ▪ Smaller housing units as senior adults downsize ▪ Housing near services and healthcare facilities ▪ Aging in place and multigenerational households ▪ Affordable rental and ownership product types Increasing share of Hispanic Population ▪ Housing units with several bedrooms to accommodate large household size and multigenerational living ▪ Affordable rental and ownership product types Increasing Number of 1 and 2- person household ▪ Smaller housing units ▪ Affordable rental and ownership product type Housing Strategies and Actions The Housing Action Plan identifies the following strategies and actions based on key findings from the market analysis, housing needs assessment, and input from the community. Strategy 1. Remove Regulatory Barriers and Encourage the Development of Variety of Housing Types. Actions: Action 1.1. Amend minimum lot size, building height, setbacks, and design standards. Action 1.2. Reduce minimum parking requirements for missing middle housing, multifamily dwelling units, and mixed-use developments. Action 1.3. Review and amend the density increase design standards criteria (e.g. density bonus) to encourage a greater use of this incentive. Action 1.4. Explore to expand and tailor development impact fees. Action 1.5. Review and amend deferral of impact fees. The City of Pasco has already made significant changes to its zoning code. This includes allowing attached and detached accessory dwelling units (ADUs), and allowing diverse home types and missing middle housing on a majority of residentially zoned lots . The City has developed a set of updated standards for adoption that will allow for more housing types and flexibility, such as townhomes, duplexes, courtyard apartments, and other homes, that will increase options for residents. Strategy 2. Increase Homeownership Opportunities. Action 2.1. Develop pre-approved ADU and middle housing plan sets. Having a pre-approved set of plans will expedite the permit process and reduce the overall cost for developers. The City can create some prototype options for developers to choose from for an expedited review. Action 2.2. Explore implementing a voluntary inclusionary housing program. Inclusionary housing encourages creating housing units that are more affordable than the market rate housing. This can be added as a part of new development regulations. The City can leverage this by allowing incentives such as increased height, density, reduction in fees etc. in exchange of a certain percentage of the units (rental or owner) to be available below the market rate. Action 2.3. Explore working with community land trust. Community land trust can be a vehicle for Pasco to increase home ownership. Different non- profit and housing groups should work together towards establishing a community land trust. Under this, land ownership will be maintained by the land trust but homeowners will be able to build equity and move to the next levels of housing. Strategy 3. Expand the Supply and Access of Affordable Housing. Action 3.1. Explore establishing a Multi-Family Tax Exemption Program (MFTE) program. Action 3.2. Explore land banking for affordable housing development. Action 3.3. Explore a local, revolving funding source to support affordable housing development and programs. Action 3.4. Invest in infrastructure in areas with higher and mixed densities. Pasco should consider establishing 8-year, 12-year and 20-year MFTE programs throughout the City to stimulate the construction of new, rehabilitated, or converted multifamily housing (4+ units), including affordable housing. The City of Pasco, neighboring cities, federal jurisdictions (e.g. DSHS), non-profit housing provides (e.g. Habitat of Humanities), community land trusts etc. should collaborate to access additional funding opportunities for affordable housing. Existing agency funds also need to be allocated for affordable housing. Strategy 4. Build Housing for Pasco’s Special Population Groups. Action 4.1. Engage alternative housing providers to build affordable housing for special population groups. Action 4.2. Adopt code amendments that accommodate supportive and transitional housing, and emergency shelters. Action 4.3. Comply with state legislations addressing housing affordability for Pasco. Alternative housing developer should collaborate with market rate housing developers to cave in housing opportunities for special population groups. Housing developments should address both physical and mental disabilities in order to cater to a diverse group. Strategy 5. Mitigate Displacement of Vulnerable Residents. Action 5.1. Monitor regulated affordable housing properties and develop a housing preservation ordinance. Action 5.2. Expand tenant protections and centralize tenant resources. Action 5.3. Provide homeowner assistance and resources. All agencies and coalitions should work together to develop a central database of resources for affordable housing. Tenant protection and a centralize tenant resources will address illegal evictions. Homeowners should be given adequate resources and support to maintain their homes. Old neighborhoods should be monitored for utilities, public safety, and various community opportunities. Additional Strategies Additional strategies are developed to address displacements. Many of these would apply to the overall conditions in addition to addressing displacement issues. Detailed discussion is available in Appendix C. Strategy 6. Build Internal Capacity Action 6.1. Build a housing coalition through robust community engagement. Action 6.2. Build capacity for data gathering and analysis. Action 6.3. Improve Pasco’s ability to leverage local, state, and federal funding opportunities to preserve and create affordable housing. Strategy 7. Build data and research to guide future policy actions Action 7.1. Define and track residential displacement. Action 7.2. Research policies or programs with racially disparate impacts. Action 7.3. Estimate affordable housing funding and financing needs. Strategy 8. Support residents now through readily implementable policies and programs Action 8.1. Support residents who may be at risk of displacement now. Action 8.2. Leveraging existing affordable housing funding and financing programs now. Strategy 9: Guide future growth by building a zoning structure prepared to accommodate new Pasconians. Action 9.1. Pass residential design standards reform. Action 9.2. Modernize impact fees and utilize them to guide future development patterns. Action 9.3. Construct a system of straightforward incentives and exactions to govern large . development applications. Action 9.4. Increase zoning density in well-suited neighborhoods. References EWU, 2022: Overview of trends in the continuum of housing for homeless & low -income residents of Benton & Franklin Counties; presented to the Community Health Improvement Plan advisory committee on May 18, 2022 Habitat for Humanity, 2023; Available at: https://www.habitatbuilds.com/who-we-are/, accessed on June 14, 2023 Appendices Appendix A: Public Participation Report Appendix B: Existing Conditions Memo, NYU Wagner Capstone Team Appendix C: HOME TO ALL - Strategies for Preventing Displacement, Addressing Racially Disparate Impacts, and Funding Affordable Housing in Pasco, Washington. NYU Wagner Capstone Team