Will “Fully Contained Communities” Solve Skagit’s Affordable Housing Crisis?

By John Doyle

Another attack is being launched against growth management in Skagit County. This is the latest in a series over the last several years. The attack is in the form of a push for Fully Contained Communities (FCCs). On March 11^th, the County Commissioners docketed an amendment to the County 2021 Comprehensive Plan to consider FCCs. Understandably, the Commissioners are concerned about affordable housing, and FCCs offer that false promise. Affordable housing is being used as a “Judas goat” to make FCCs acceptable. Affordable housing in Skagit County goes beyond a token number of “affordable homes” in new development. It is a separate issue from FCCs, and FCCs are not the solution.

Framing the issue

Writing in Skagit Scoop previously, I focused on the impact of the Washington Growth Management Act passed in 1990. I noted that Fully Contained Communities (FCC’s) were not included in the original Skagit County Comprehensive Plan due to the potential negative impact on agricultural and forest lands. While these concerns about resource lands are still true, there are additional issues that are critical to the current decision, most especially the lack of affordable housing in Skagit County.

To finish my previous characterization and correctly frame the issue, it is important to understand that FCCs are a development strategy that specifically targets residential/commercial development outside Urban Growth Areas. The State RCW that specifies the conditions of an FCC requires that the FCC offers housing to “a broad range of income levels.” However, it does not specify how broad or what range of income levels.

“First cost” is just the beginning

There is an underlying focus with single family affordable housing with regard to “first cost.” This leads to the additional focus on supplying new low cost housing to low-income and first-time buyers. While this has been the strategy for the last 70 plus years, current demand has outstripped the market. Once the first-time buyers sell their home, it is no longer affordable to the target families.

This is a sad distraction from the actual issues of affordable housing. Like any development activity, affordable housing has to grapple with the costs of land, materials, labor and infrastructure development. An added issue is the escalation of the value of property over time. It is these forces that drive affordability.

Development strategies, even if they include “affordable housing” as an element, are not a primary instrument to attain affordable housing. Local governments have to start developing housing inventories that are only available to target family incomes.

Community Land Trust Model

There are some good models for local governments to adapt. The “Community Land Trust” (CLT) model is a good start. CLTs are non-profit organizations focused on building and maintaining a stock of permanently affordable housing. Here’s how it works. The CLT buys land, and builds or renovates housing for home buyers who meet certain income guidelines, usually earning an income up to 80 percent of the area median income. In 2019, the median income was $60,800 for a family of four in the Anacortes-Mount Vernon area.

The qualified home buyer purchases the house for an affordable price based on their income. Most definitions of affordable mean a person or family pays no more than one third of their income for housing costs. The CLT retains permanent ownership of the land the house is on. When a homeowner decides to sell, they sell the home at a price set by the CLT, earning an agreed-upon return on investment plus the value of whatever improvements that have been added. A new resident buys the house at a price that’s been kept affordable and agrees to the same conditions regarding resale.

Local governments can combine the CLT financing model with development of “surplus lands.” Surplus lands are lands that the local government owns, but will no longer use for its intended purpose. By RCW, local governments can use surplus land for affordable housing. Using the CLT finance and program model, local governments will begin to create a separate market and inventory of affordable single family housing within existing Urban Growth Areas. Entities like the Home Trust of Skagit and Skagit Habitat are currently building these inventories on a small scale within communities of Skagit County. Local governments could scale the model up significantly, and/or partner with these entities.

FCCs are not the answer

To bring this issue back to the push for “Fully Contained Communities,” FCC’s are not a solution to affordable housing. The overwhelming destructive potential of allowing FCC’s in rural areas is not counterbalanced by a small affordable element that disappears after the first sale of a property.

John Doyle is a retired La Conner Town Administrator and Planning Director. John has held a variety of State and Local management positions with an emphasis on land use, environmental and energy policy.