As featured on Puget Sound Business Journal
The limited availability of affordable housing is a common theme in Seattle-based news. Indeed, the Seattle area presents an interesting case study in the need for innovation and a new way of thinking in the housing space. This requires alignment from various parties, spanning government and the private sector. I believe, whatever political leaning one favors, it is clear: Seattle has a real housing issue that will expand and become harder to solve the longer we wait.
The Urban Institute estimates that the Seattle area needs 140,000 new housing units over the next 20 years. If one expands to King County, there is a projected shortage of 337,000 units over the next two decades.* Expanding to the next three adjacent counties and the shortfall approaches 675,000 units.* While the Seattle Office of Housing says that one-third of Seattle households are low-income, the shortage of affordable housing applies also to the “Missing Middle.”* In the Seattle area, there are countless stories of double-income families being unable to afford home ownership, relegating them to the status of “permanent renters.”* In many parts of the metropolitan areas, median house prices exceed $1 million, rendering them unaffordable to all but the highest earners.*
The Seattle area is now the seventh most expensive housing market in the country.* With a booming tech sector, a large influx of new citizens, restrictive zoning laws and natural geographical limits, I believe Seattle requires a concerted plan to fix the housing problem; this plan should include innovative finance solutions that bring together builders, buyers, agents and loan officers into one virtuous cycle.
Housing price growth has vastly outstripped wage growth in the United States as a whole but particularly in attractive metropolitan areas like Seattle.* As such, traditional finance options, while useful to many, do not offer solutions to the Missing Middle.* Further, some house builders are loath to take on the risk of building units with uncertainty in their ability to find qualified buyers. This creates a vicious loop of inaction while the population grows. This cycle must be broken.
At Legacy Group Capital (Legacy), we are dedicated to breaking this cycle by offering unique, accessible and powerful financing solutions to buyers, builders and homeowners alike. Legacy empowers homebuilders, real estate investors, homeowners and homebuyers with a flexible lending and investment platform that reflects its common sense-approach to lending. Currently, Legacy works with hundreds of homebuilders, brokers and mortgage loan officers while also serving thousands of investors across five real estate investment funds. Legacy has access to over $500 million in equity and debt capital.
Legacy has served the Seattle community for 18 years and has helped hundreds of local builders create thousands of new homes across the greater Seattle area through innovative financing solutions and expert real estate guidance. A good percentage of these houses were at price-points that address the needs of the Missing Middle.
As the Seattle area booms with technology, AI, a new fleet of startups and a powerful traditional manufacturing base, all denizens of this amazing city should be able to benefit. Homeownership is a proven method of generating wealth and passing it on to the next generation. I believe Seattle can buck the trend, even with its challenges, with cooperation, innovation and choice.
Learn more about our innovative, easy finance solutions on our homepage and hear how we can serve your real estate lending needs.
