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.”

Affordable Housing Town Hall Meeting

You are invited to Mayor Cooney’s

TOWN HALL MEETING

Tuesday, January 16, 2018 @ 6:00 – 8:00 p.m.

Chelan Senior Center

534 E Trow Avenue

Chelan, WA

 

Main Subject: Affordable Housing Initiative

Goals: State the need, find solutions and set a timeline for success.

This meeting will be focused on Community input for the City’s goal of providing affordable/workforce housing to our citizens.

It will also be the first step in gathering key players to help us accomplish our goals.  We are seeking land donors, cash donors, developers that will help “give back”, legal expertise to assist in deed restrictions, realtors that can help us with their expertise and, of course, builders that believe in the cause. What other talents can you provide?

I will be asking for a thoughtful dialogue which stays on task to accomplish our goals. We are all aware of the many issues surrounding workforce housing – what we need now are engaged citizens to step forward and help us at this critical period. Please bring your thoughts and ideas!

“A Community Collaborative Effort”

Please plan on attending this key meeting.

Mark Your Calendars!

Chelan City Council holds first meeting of the new year

Chelan City Council held its first council meeting of the new year on Tuesday evening.

To begin the meeting, City Clerk Peri Gallucci swore in the Council’s two new members; Ty Witt and Tim Hollingsworth and returning council members, Erin McCardle and Servando Robledo. (Photos at bottom of article by Richard Uhlhorn)

They heard from John Olson, Friends of Lake Chelan, during the Citizen Comment period.

Olson told the council that he was very pleased to see “that you have affordable housing on your agenda for your retreat.”

Olson went on to say that affordable housing is “a very complicated subject,” and invited the council members to an informational meeting on the Impact of Short Term Housing and Affordable Housing at Lakeside Lodge & Suites Wednesday evening, January 10. This meeting will begin at 6 p.m.

The group will share research on what other communities are doing to solve the issues of affordable housing and short term rentals.

The council then voted Wendy Isenhart in as this year’s Mayor Pro Tempore and selected its annual Council Committee Liasions (list soon).

Public Works Director Craig Gildroy requested the council approve a temporary Associate Project Planner position while the Planning Department seeks a permanent employee for that position. “This could take some time,” said Gildroy.

The temporary position is for 20 hours a week. “We have a very busy year coming up and this will give us plenty of time to recruit the right person.”

Finance Director Cheryl Grant requested that the council approve an amendment to the 2018 Chelan County Inmate Housing Agreement that raises the daily cost of incarceration from $87 a day to $96 a day.

Mayor Cooney remarked that the City was on the hook to pay these charges. Grant remarked that this budget item was always over budget.

During the Administrative Reports, Gildroy told the council that his department’s work load was large and brought up the most pressing need was for affordable housing.

He also reported that his Code Enforcement officer was going through licenses and taxes and looking for zoning code violiations. “We are working on additional rental rules.”

Public Works Director Dwane Van Epps tendered his retirement letter and Mayor Cooney accepted it at the meeting with reluctance.

Van Epps final day as director of Public Works will be July 12, 2018. Mayor Cooney stated that the City would cherish the time “we have left. We appreciate you and all that you have done for the City.”

During Council Comments, Erin McCardle said that Van Epps letter of resignation was painful. “We’ve worked on a number of projects together and you have been a joy to work with.”

The rest of the council also lauded Van Epps work over the years and said he would be missed.

The two new council members both said they were pleased to sitting on the council. Witt said he was looking forward to getting up to speed and wants to visit each department and get to know the employees. Hollingsworth said he was also excited to be on the council. “I’ve been on the margins for years,” said Hollingsworth. “There are a lot of things to address this year.”

Mayor Cooney stated that Affordable Housing is the City’s biggest challenge this year. To that end, there will be a Town Hall Meeting at the Senior Center on Tuesday, January 16 at 6 p.m. to discuss and seek solutions to the Affordable Housing Crisis.

City Council will be back in session on January 24, beginning at 6 p.m.

DSC03831-cncl membersDSC03841-Ty WittDSC03843

Informational Meeting on Short Term Housing

On Wednesday evening, January 10, the Friends of Lake Chelan are hosting an informational meeting on The Impact of Short Term Rentals & Affordable Housing.

This meeting will begin at 6 p.m. in the third floor conference room of the Lakeside Lodge & Suites, located at 2312 West Woodin Avenue across from Lakeside Park.

Short term rentals have impacted affordable housing world-wide. It was an issue that was being discussed in Barcelona when we visited in 2016. Many apartment owners were turning apartments into AirBnB rentals leaving many local residents scrambling for affordable housing.

This very issue is cropping up across the United States in tourist towns where housing owners can make more money with short term rentals over renting an apartment or house on a long term basis.

The Lake Chelan Valley is facing the same issues as towns like Bend, Oregon, Sun Valley, Idaho and Jackson, Wyoming.

If you are interested in this issue, join the Friends of Lake Chelan and find out about potential solutions or come back to All Things Lake Chelan on Thursday and read my report

Richard Uhlhorn.