Chelan housing crisis… a double edged sword

John Olson (left) and Steve Kline (not pictured) gave a presentation
on Short Term Rentals and Affordable Housing last Wednesday
at Lakeside Lodges. Twenty residents attended including a number
of City Council members who will be facing the Affordable Housing
issue this year.

by Richard Uhlhorn – All Things Lake Chelan

According to John Olson and Steve Kline, the Chelan Crisis is a double edged sword. There is the problem of too many property owners turning their properties into short term rentals (STRs) and there is a genuine shortage of affordable housing options for Chelan’s labor force.

On Wednesday evening, January 10, both Olson and Kline laid out their vision for a solution to the crisis in hopes of creating a citizen campaign to promote a program that will solve the affordable housing situation. Twenty residents attended the meeting including a number of City Council members who will be exploring the issue in the coming year.

According to the Lake Chelan Chamber of Commerce, the Lake Chelan Valley has become the number one tourist destination in the State of Washington. This, in turn, has created a huge inventory of short term housing options for the visitor and left the labor force no option but to commute from other communities as far away as Quincy and Okanogan.

Their research shows that the Chelan Valley has upwards of 1,300 plus short term rentals which helps to drive up both long term rental rates and housing purchase prices. The affect is that STRs not only drive up labor costs, but, according to the City of Chelan’s Comprehensive Plan, upwards of 3,000 workers commute daily to work in the community.

At a reasonable $25,000 per year income, 3,000 workers commuting represent a $75 million revenue loss to Chelan. Furthermore, wide-spread job vacancies are creating further economic losses.

It’s a known fact that affordable housing enhances the quality of life in a community and that affordable rentals leads to entry level home ownership.

The “CHELAN CRISIS” was the first presentation made at the meeting. John Olson went through the research on how Short Term Rentals (STRs) or Vacation Rentals impact the community and kill the opportunity of building affordable housing.

“The excessive embrace of tourism can overwhelm the individual
character of a town.” Devil’sBargain, by Hal K. Rothman

Both Walla Walla and Bend, Oregon have faced the same problems Chelan is currently facing with the STRs and affordable housing issue.

Walla Walla, a community of 45,000, experienced a rapid growth of short term rentals with the development of their growing wine industry. To alleviate what they determined was a major detriment to affordable housing, they banned STRs, but soon grandfathered existing properties while not allowing new conversions to STRs.

Walla Walla had an estimated 200 STRs, whereas Olson and Kline’s research shows that Chelan and its Urban Growth Area may have as many as 1,347. Chelan’s Department of Community Development and Planning has no idea of how many short term rentals the community has.

The problem with home owners turning their properties into short term rentals is the exacerbation of the long term housing affordability crisis. The report states that “STRs turn Chelan into a method for out-of-town investors to park their money here at the expense of locals.”

According to RewardExpert.com’s website, Chelan County is now the fourth best place to invest in a winter vacation home in the Pacific Northwest. The Lake Chelan Chamber of Commerce states that Chelan is now the number one vacation destination in the state with over 2 million visitors each year.

Bend, Oregon took a different approach to their short term rental problem. They made them a profit center for the City.

According to Olson and Kline, Chelan should adopt a similar program that Bend did and make STRs into a profit center generating income to the City for services provided without curtailing the business opportunities of the property owners.

This would include a business license; application fees; lodging tax; inspection fees and a large infraction fee if caught without the proper permits. They feel the financial impact on the City would bring in millions of dollars that could be used for a number of services.

Without some management program of the short term rental market, Olson and Kline feel that successful affordable housing will be impossible to obtain.

The big question, of course, is what is affordable housing? The other day, this writer was discussing that very issue with a young lady who is currently living with four other people in a home that they need to vacate in May.

“I want to stay in the valley, but I don’t know if I can find a rental,” she said. I asked what she considered affordable. She replied that she could pay $750 to $800 per month on her gross wages of $25,000.

Most rentals in Chelan and around the valley are easily running between $1,000 to $1,500 per month, if you can even find a rental. The old Regency Manor nursing home which has been converted into apartments rent for $1,250 per month for a very small basic one bedroom, and they are full, not because they are reasonably priced, but because there are no rentals available.

The Friends of Lake Chelan conducted an informal anecdotal survey of personnel working at the City, schools, parks, and within the service industry. This survey revealed that $750 per month would be an acceptable rate for a one bedroom apartment or $1,100 for a shared two bedroom apartment.

There is currently a move by the Friends of Lake Chelan to begin a Citizen Campaign to build affordable housing for those people working in Chelan, but forced to live elsewhere. “People are actually driving from as far away as Okanogan to work here,” stated Kline.

“We have identified five people who would donate land if the City would do something (to help with costs),” said Kline. One of those individual has 12 acres near the airport and has said he would donate five of them if the City would get water to the area.

“This is a public relations opportunity for the City,” said Kline. He stated that the City of Sunnyside’s former mayor said to stay away from Government Controlled affordable housing grants.

Years ago, Clint Campbell and group tried to build affordable housing in Chelan and it became such an onerous process that it was finally all turned over to the Catholic Church (South Chelan Casa Guadalupe) and is now managed by the Wenatchee Housing Authority under Section 8 federal guidelines.

Olson and Kline put forth some criteria for potential tenants which included:

  • Must work in Chelan
  • Have an income below $50,000
  • Indexed rents to the state minimum wage
  • Conform with the City work-force housing regulations
  • Sign a one-year minimum rental contract
  • Undergo a local police background check
  • Maximum two people per bedroom

A good example is the Chelan Fruit housing project that is being constructed by Simplicity Homes of Hayden, Idaho at $89 per square foot. These housing units are being built for Chelan Fruit employees only, but the project gives an example of what can be done.

“Somewhere in between here, we should be able to find somebody to do this,” said Kline. “I believe this is doable if we put our minds together. We can make this happen.”

2 thoughts on “Chelan housing crisis… a double edged sword”

  1. The Chelan Fruit project will hopefully pave the road for similar activity. Friends of Lake Chelan should be applauded for its early and strong work. It is a difficult task, and Lake Chelan is certainly not alone.

    Like

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