New “Low Income” in King County

By Mrs. Song Finance

New low income
« FY 2017: 1st Quarter Expense Report
New low income

There was an article published recently that $72,000 is now considered “low income” where I live (King County) for a family of four. Compare that to last year, when the low-income limit was $69,300.

Those are some surprisingly high numbers, especially when the median household income in U.S. was only $56,516 (according to 2015 data from the U.S. Census Bureau).

But median income in Seattle has been rising at a rate faster than any other major U.S. city. The current median household income in King and Snohomish counties is $96,000. Part of the reason is due to creation of a lot of high-paying new jobs by tech companies. The other not-nicer-part is low income people are being pushed out due to higher living costs.

Since the number stated is the median income, it means half of the households in King County earn higher, half earn lower. Not everyone is benefiting from the massively increased income, and people who are falling in the lower half may be finding it hard to make ends meet.

Even though Seattle’s minimum wage is rising to $15 this year, working full time at that wage only equates to $31,200/year. A household with two adults working full time minimum wage jobs will only bring home $62,400 before tax, which definitely falls short of $72,000.

The numbers don’t really come as a surprise however to those of us who’ve been living here and feeling the heat.

Seattle’s housing prices are in a race of a lifetime. Median home prices in King County has increased by 8.7% from a year ago, no thanks to high demand and low supply. A lot of the new homes being built are luxury homes starting from $1 million, which aren’t exactly affordable for most people.

Even though we own a house, we like to keep an eye out on the housing market. We saw this house that sold in Dec 2016 for $440,000, only to be flipped and resold 3 months later for $550,000. This is not uncommon as the market is so hot right now. There’s no lack of tales about bidding wars and all-cash sales with no contingency clause either.

Average rental prices has increased by 8.3% as well. In 2016, the average one-bedroom in King County rents for $1,266, while a two-bedroom apartment goes for $1,523. If you want to live in Seattle, you’re look at an average of $1,959 for one bedroom, and $2,667 for two bedroom. Whereas the US average is $825 and $1,027 respectively.

It’s not hard to see what kind of income is needed to be able to live in King County, and why a lot of people are being forced out.

It really is unfortunate.

Do you think maybe it is something that is inevitable as cities transform into major urban hubs? Or do you think there’s a way for cities to move forward without leaving people behind?