By Emily Hamann

What was once a middle-class milestone is becoming less and less achievable in Bellingham. The ability to buy a home is now out of reach for many, as prices have skyrocketed, and wages have not.

“If you look at average income versus average home prices, there are probably a lot of people who can’t get into the market right now,” Kelly Hanlon, a Bellingham real estate agent at John L. Scott, said.

And it’s not just homebuyers. Renters are also facing higher rents, with no increase in income. That has had a ripple effect, that has spread out to all income levels, and impacted households in ways that go beyond housing.

Hanlon works with a wide variety of clients, including first-time homebuyers.

In Bellingham, most of her first-time homebuyers are looking for a house around $325,000 or below.

“Unfortunately in our market [that] would be considered entry level,” Hanlon said.

And homes in that range can be hard to come by. Often they require extra inspections, which cost extra money, or the homes need extra repairs.

“That’s what first-time homebuyers trying to find an affordable home are going through,” Hanlon said. “It’s going through a lot of hoops.”

According to the City of Bellingham, families need to make $76,000 per year to afford a median-value home, which is more than what 67 percent of Bellingham households make.

“It’s a real challenge for anyone of even modest income,” Brien Thane, executive director/CEO of the Bellingham Housing Authority, said.

Rising home and rental values have taken a toll on the housing authority, which disperses housing subsidies from the federal government’s Section 8 program.

“When the market was quieter, our program could be a stepping stone for people to get better jobs, move out,” Thane said. Eventually, they might even be able to buy their own homes. That has gotten more and more difficult.

“Homeownership is really out of reach for most folks in the market,” Thane said.

Overall, more people are now paying more of their income for housing.

“It’s leading to a lot more housing instability,” Thane said. “Housing is our single biggest expense, and the more of our income it takes, the more we’re stuck living paycheck to paycheck, and a car breaking down or a medical emergency can put you at risk for not making your rent.”

Most of the people seeking Section 8 vouchers are working, Thane said, but at low-wage jobs.

“A lot of the voucher applicants, they’re employed, they’ve got a house or a home, but they’re just paying so much of their income in rent that they’re seeking our assistance,” Thane said.

Thane said an increasing number of people in Bellingham are paying 50 or 60 percent of their income just for housing.

“It’s really significantly cutting into what we used to call the American Dream, or the middle class.”

Part of the reason for increasing housing costs is that that new home construction hasn’t kept pace with demand.

The other problem is that homes that are getting built are getting more expensive.

“Another part of the challenge is construction costs have been escalating rapidly for quite a few years now,” Thane said.

That means builders and developers have to charge more for the housing they do build.

Thane said the housing authority is looking into ways to build affordable housing more cheaply. But that alone won’t fix the problem.

“We need more public investment in affordable housing,” Thane said. “Because the private market simply isn’t going to address that need for very low income folks because there’s no profit potential.”

John Moon, executive director at Habitat for Humanity for Whatcom County, has also seen resources getting stretched thin by the housing market.

Habitat for Humanity builds or fixes up houses, and sells them at cost to low-income families. It also finances their mortgage, at no interest. However, as housing prices and building costs have gone up, Habitat for Humanity has seen increase demand for its resources. At the same time its resources aren’t going as far.

“It’s an incredibly frustrating position to be in,” Moon said.

Problems with permits, or issues finding or building on land have made the last few years “exceedingly difficult,” Moon said. Any delay or increased cost means a family might not be able to afford the house.

“Our clientele is even more sensitive to even a small price increase,” Moon said.

And Habitat for Humanity has had to turn away more and more people.

“Currently we’re not even accepting application because we have such a backlog,” Moon said.

However, the organization is currently working on a new project that could go a long way toward assuaging some of those problems.

This month, Moon said, the foundation will be poured for the first part of the Telegraph Road Townhomes project. Set to be complete by the end of the year, this first part of the project will include eight townhouses. Eventually, the project will include 72 homes, Moon said.

The project is a collaboration between Habitat for Humanity and Kulshan Community Land Trust, which purchased the land for the project from a person who wanted it to be used for affordable housing. A number of construction companies are working on the project at cost, Moon said, and Whatcom Community Foundation and WECU have agreed to provide low-cost financing for the project.

“We just have a lot of caring folks out there, that see that people don’t have a decent place to live and want to do something about it,” Moon said.

Households earning between 30-80 percent of the area’s median income will be eligible to purchase the houses. For a family of four, that’s an income range of $20,000-60,000 per year, Moon said.

Eventually, Moon said, the plan is to sell some of the houses on the open market, available to all income levels, in order to create a mixed-income community.

Moon said creating more housing at all income levels is key to alleviating pressure on the housing market. People can’t move out of their subsidized rentals if there’s nowhere for them to move to. They can’t sell their starter homes if there’s not another home available.

“There needs to be a spectrum,” Moon said.