Don’t Be Manipulated by Misleading Data

As Bellingham struggles with skyrocketing rents, any effort toward a solution requires we start with facts: We can’t solve a problem without knowing its exact nature. One variable in our rental housing is the impact of Western Washington University students who live off campus, and how they affect rental costs. This article tries to clarify that impact.

About 70 percent of WWU’s approximately 15,000 students live off campus and it seems obvious that their presence has an impact on Whatcom County’s rental housing market—especially in Bellingham. What’s not as obvious is how misleading statements about this rental market can be when they don’t take these students into account. Unfortunately, examples of misleading information abound:  (1) Whatcom County; (2) Bellingham; (3) Ferndale; (4) the Association of Washington Cities; and (5) the Washington Department of Commerce, and the information website, Stacker, which is designed to “…provide publishers with engaging, data-driven stories.” 

Using Stacker as an example, their data on ‘rent as a percentage of median income’ shows Whatcom County is the 5^th highest of all 39 Washington counties. When one looks at the state’s six highest counties, it is immediately apparent that, like Whatcom County, two others are impacted by the presence of a university: Kittitas County (with Central Washington University) is 3rd highest in rent as a percent of income, and Whitman County (with Washington State University) is the highest. The remaining three are counties one would expect to be high because they represent the most urbanized areas of the state: King is 6^th highest, Snohomish is 4^th, and Pierce is in 2^nd place. 

The fact that universities are found in three of these top six counties is more than a hint that WWU likely has a significant impact on Whatcom County’s rental housing market. To “unpack” this impact, and in the spirit of Stacker, I will try to provide, if not an engaging story, at least one that is truly data-driven. To do this, I use data from several sources, in conjunction with some assumptions. (For details on the data and assumptions, click here for Note#1).

Let’s start with income. Whatcom County’s median annual household income is $62,984, or $5,249/month (gross). Stacker shows that 22.6 percent of that income goes to pay median rent, which according to their data, is $1,185. At 22.6 percent of income, that median rent places Whatcom County in that 5^th highest percent of income-to-rent category. 

But, if we estimate the median monthly household income for non-student households, it comes out to $5,940, a $700/mo. difference. (For details on the calculations, click here for Note#2). With this increase in income, only 20.0 percent of median household income is going to pay median rent in Whatcom County. This change may seem small, but that 20 percent now places Whatcom in 18^th place, right behind Jefferson County’s 19.9 percent. Jefferson County has a population of not quite 33,000 and encompasses Sequim, Port Townsend, and most of the Olympic National Park. This new ranking for Whatcom County is a significant change and one that illustrates the impact of WWU students on our rental market.

An expensive example of the damaging effects misleading data can have is in the conversations around low-income housing needs. The change in Whatcom County’s ranking, from 5th highest to 18th when students are considered, nullifies the argument of an urgent need for low-income housing. Again, the simple fact is that any argument or statement about the county’s rental market that doesn’t consider the impact of students, is misleading.

An even clearer picture of Whatcom’s rental market comes into view when one considers that students are generally members of parental households. These households have much higher median incomes than students with independent incomes. In 2021, (the most recent data available,) independent student median annual income was $19,953. Whereas parental households, on average, have median annual incomes that are four or more times higher than that. For example, the median annual income for the state as a whole is $82,400 (again, in 2021 dollars). Considering that many WWU students are from King, Pierce, and Snohomish counties, it is worthwhile noting that the median annual incomes in these counties are, respectively, $106,326, $82,574 and  $95,618. Each of these three counties has a median income not only higher than that for the state as a whole, but also higher than Whatcom County’s. 

Students residing off-campus are a structural feature of Whatcom County’s rental market. In other words, unlike individual WWU students who “come and go,” this structural feature is a permanent segment of our rental market. Because of it, Whatcom County residents find themselves in competition for housing against incomes from wealthier counties like King, Pierce, and Snohomish. This competition pushes local rents up because of demand from out-of-area households that have students at WWU. When demand from a given segment increases, supply tends to respond to it. 

Given the numerous facets of this data, I would suggest that if it is not already doing so, the WWU Foundation should consider expanding its portfolio into the real money-maker: off-campus rental units. Since the university appears ambivalent about providing more housing on campus, this could be a self-realizing investment; to paraphrase the idiom: They could kill two birds with one stone.