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 5th 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 6th highest, Snohomish is 4th, and Pierce is in 2nd 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, see NOTE 1 at bottom of this article.)

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 5th 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, see NOTE 2 at bottom of this article). 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 18th 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.

NOTE 1

Starting with data, Georgetown University’s Center on Education and the Workforce finds that 40 percent of undergraduate students are active in the workforce (30 or more hours per week) along with 76 percent of graduate students. I apply these percentages to WWU, where there are about 1,000 graduate students, leaving about 14,000 undergraduates. The Georgetown figures generate about 5,600 WWU undergraduates in the workforce and 760 WWU graduate students, for a combined total of 6,360.

Second, The U.S. Census Bureau (“Quickfacts”) reports that there are 89,865 households in Whatcom County with a median annual household income of $70,011 (in 2021 dollars). 

Third, data from the National Center for Education Statistics (NCES) show that, on average, college students who are dependent on parents for support had an annual independent income of approximately $8,500 in 2015. 

Moving on to the other assumptions, I assume that 70 percent of the 6,360 WWU students who are active in the workforce also live off campus and on average are two to a housing unit, which results in 2,226 (where 2,226 = .70*6,360/2) student “households” in Whatcom County. Those living on campus are in “Group Quarters,” and therefore not counted as households. Without these student households, there are approximately 87,639 (where (89,865 – 2,226 = 87,639) “non-student” households in Whatcom County.

NOTE 2

Assuming that all of the WWU students living off-campus work and that the NCES estimate of $8,500 applies to them, then the medium annual income of these student households (at two per household) is $17,000 and their median monthly income is $17,000/12 = $1,417. 

Using the CPI inflation calculator provided by the U.S. Bureau of Labor Statistics to adjust the $17,000 (in 2015 dollars) to 2021 dollars (making it comparable to the Census Bureau’s “Quickfacts” income data, which are in 2021 dollars), yields $19,953 as the inflation adjusted median annual household income. Adjusting this to a monthly amount yields $1,663. 

We can now find “$X,” the median annual household income in Whatcom County without the 2,226 student households. The formula is:

(87,639/89,865)*$X +(2,226/89,865)*$19,953 = $70,011

which leads one to the conclusion that $X = $71,283. Dividing this estimate of annual household income by 12, yields an estimated median monthly household income of $5,940.