Housing Affordability

Housing is considered affordable when total housing costs (rent or mortgage plus utilities) do not exceed 30% of a household’s gross income.

• Households spending more than 30% are considered cost-burdened
• Households spending more than 50% are severely cost-burdened

Housing affordability is not just about lowering prices. It is about choice and access:

• Whether young adults can enter the rental market and remain in the community
• Whether families can grow without being priced out
• Whether teachers, nurses, service workers, and public employees can live near their jobs
• Whether older adults can downsize or age in place within Poulsbo

Affordability is what allows Poulsbo to function as a complete community, not just a place for households at a single income level.

Housing affordability directly affects who can live and work in Poulsbo.

When housing costs rise faster than incomes:

• Renters face increasing cost burdens
• Homeownership becomes unreachable for many households
• Employers struggle to attract and retain workers
• Commute distances increase
• Community cohesion is weakened

Housing affordability is not just a housing issue — it is a workforce issue, economic development issue, and community sustainability issue.

Data from the City’s Housing Needs Assessment highlights several key trends:

Growth and Demographics

• Poulsbo is growing faster than Kitsap County and the state
• The fastest growth is among older age groups, increasing demand for smaller and accessible housing

Renters

• Median rent (2023): $1,767
• Income needed to afford median rent: ~$66,000
• Median renter income: $52,211
• 47% of renters are cost-burdened or severely cost-burdened
• Nearly one-third of renters earn less than $35,000 per year

Homeownership

• Median home value (2023): $575,900
• Income needed to afford a median-priced home: $158,000–$165,000, depending on interest rates
• Many of Poulsbo’s largest employment sectors earn $25,000–$55,000 annually

These gaps illustrate why housing affordability challenges are most acute for renters and first-time buyers, and why older adults on fixed incomes face increasing risk.

Housing affordability is shaped by two categories of factors.

Market Factors (Largely Outside Local Control)

• Interest rates and lending conditions
• Construction labor and material costs
• Regional housing demand and in-migration
• National housing shortages
• Financing and insurance requirements

These forces affect housing costs across the region and limit what any single city can control.

Local Cost Drivers (Within City Influence)

The City has more influence over:

• Zoning and development standards
• Permit review processes and timelines
• Application, impact, and utility connection fees
• Infrastructure and frontage requirements
• Buildable land supply and development feasibility
• Incentives that reduce cost or improve predictability

Small changes in these areas can have outsized impacts, particularly for smaller, infill, and missing-middle housing projects.

Recent legislative actions include:

• Expanded Accessory Dwelling Unit (ADU) allowances
• Allowing duplexes on corner lots in residential zones
• Enabling unit lot subdivisions for fee-simple townhomes
• Reducing minimum sizes for Planned Residential Developments
• Updating commercial and mixed-use zones to allow housing
• Streamlining permit review timelines to improve predictability
• Updating parking standards and review thresholds
• Adding state-required housing types such as emergency, transitional, and supportive housing

These changes focus on reducing regulatory barriers, improving feasibility, and allowing a broader range of housing types—key components of affordability.

Planning for Housing Document (June 2025 Update)

• Planning for Housing is Poulsbo’s roadmap for ensuring a diverse mix of housing choices that support residents of all ages, incomes, and needs while preparing for the city’s future growth.

Affordable housing refers to housing costs — including rent or mortgage plus utilities — that do not exceed 30% of a household’s gross income, enabling households to meet other basic needs such as food, healthcare, and transportation. In Poulsbo, “affordable housing” means housing that is affordable at or below 80% of Area Median Income (AMI) and meets the 30% cost threshold. The City plays a key role in planning, policy, and strategic partnerships that support the preservation and development of affordable housing.

Nordic Cottages is Poulsbo’s first city-led affordable housing development, built on City-owned land. Project highlights:

• 8 one-bedroom cottages
• Serves low-income seniors and adults with disabilities
• Long-term affordability ensured through income restrictions
• Managed in partnership with Housing Kitsap
• Designed to support stability, accessibility, and community connection

Nordic Cottages demonstrates how the City can play a direct role in delivering deeply affordable housing when public resources and partnerships align.

Total of approximately 349 units managed either by Housing Kitsap or are federally subsidized (e.g. vouchers, HUD, tax credits)

• Austerbruin
  • 32, 1 – 4-bedroom units (final unit count to be determined by Housing Kitsap)
  • All utilities included
  • Part of a collection of single-family homes and apartments funded through Public housing Program
  • Managed by Housing Kitsap
• Fjord Manor Apartments
  • 38, 1 – 2-bedroom units; some are wheelchair adapted
  • For residents at or below 50% AMI and 62+ or disabled,
  • All utilities included
  • Amenities: central laundry, parking, and community room
  • Downtown Poulsbo, adjacent to the Poulsbo Community Center (19581 1^st Ave)
  • Managed by Housing Kitsap
• Fjord Vista II
  • 16, 2 – 3-bedroom units
  • For residents at or below 50% AMI
  • All utilities included
  • Amenities: central laundry, parking, and playground area
  • Near downtown Poulsbo, adjacent to the Poulsbo Community Center (19581 1^st Ave)
  • Managed by Housing Kitsap
• Hostmark of Village Cove Apartments
  • 120, 1 – 2-bedroom units
  • For residents 62+ or disabled
  • Amenities: central laundry, business center, fitness center, community room and garden area
  • Minutes from 305 and across from Gateway Fellowship Church (703 NE Hostmark St.)
  • Managed by Allied Residential
• Kitsap Homes of Compassion
  • Leased units of affordable long-term housing for seniors, homeless or soon to be homeless with no pets or addiction issues; participants must have a steady income
  • 99% of gross revenue goes to actual program costs; program is 100% fully funded by the rent the participants pay once the house is fully occupied
  • Staffordshire House
    • 6 units for low-income mothers and children
    • Residents receive rent subsidies on a temporary basis
  • Liberty Ridge Apartments for Men and Liberty Ridge Apartments for Women (Kitsap Homes of Compassion)
    • Total of 6 units of shared housing
  • Morrow Manor
    • 8 units for long-term supportive housing for domestic violence survivors
    • Support services provided by YWCA Kitsap County
  • Nelson House
    • 5 beds for women, ages 18-25
    • Rent in exchange for park maintenance
    • Located at Nelson Park
    • Managed by Coffee Oasis
  • Windsong Apartments
    • 36, 1 – 2-bedroom units
    • For residents at or below 50% AMI
    • All utilities included
    • Amenities: central laundry and parking
    • Adjacent to Nelson Park, (19880 3^rd NW)
    • Managed by Housing Kitsap
  • Winton Woods Apartments
    • 82, 1 – 3-bedroom units
    • Amenities: basketball court, parking, playground
    • Adjacent to Regal Poulsbo Movie Theater (243 Winton Lane NW)
    • Managed by TAM Residential

• 0073% Sales Tax Sharing Program (RCW 82.14.540 / SHB 1406 (2019); Poulsbo Ordinance 2019-15; PMC 3.22.010)
  • Sales tax sharing program that allows cities to impose a sales tax and access part of that sales tax revenue to invest into affordable housing by acquiring, rehabilitating, or constructing affordable housing, including building or rehabilitating units within existing structures or building facilities that provide supportive housing services
• 1% Sales Tax Increase (RCW 82.14.530, ESHB 1070; Poulsbo Ordinance 2021-07; PMC 3.23)
  • 1% sales tax increase (starting 01/01/2022) for affordable housing and services for most vulnerable individuals whose income is at or below 60% AMI (e.g. mentally ill, elderly, veterans, domestic violence survivors, foster and homeless youth)

• Affordable Low Income Housing Density Bonus Incentives (PMC 18.70.070.B)
  • For any development that includes at least 10% as affordable for low-income ownership or rental housing; Project must have 5+ units
  • Density bonus of 20% will be awarded for 10% units designated as affordable
  • Density bonus of 25% will be awarded for 15% units designated as affordable
  • All units regardless of affordability should be similar size and scale
  • Units must be affordable for 20 years

• Allocation of City Property for Affordable Housing (Resolution No. 2020-20)
  • Resolution to allocate city-owned property at 609 NE Lincoln (future site of Nordic Cottages) and in the Klingle Natural Area for affordable housing

• Cottage Housing  (PMC 18.70.070.I)
  • Cottage clusters should have 3-13 units per cluster; more than 1 cluster is permitted
  • Parking, open space, and private space requirements
  • Is considered a planned residential development in RL zoning
  • Is considered a subdivision, short plat, PRD or condominium community in RM and RH zoning

• Exceptions for Housing Authorities (PMC 18.310.050)
  • City can “establish such exceptions to building, housing and development codes as the city council deems appropriate…for the development of low-income housing”
  • Created to “provide clear criteria for the review of such applications and to provide for adequate public input.

• Municipal Contributions to Affordable Housing Programs
  • Nelson House
    • Use of property and free rent is provided in exchange for maintenance of Nelson Park
    • Managed by Coffee Oasis
  • Coffee Oasis
    • Below market rent is provided
  • Kitsap Homes of Compassion
    • $6,000 annual financial support to be used for Poulsbo properties: Staffordshire House and Liberty Ridge
    • Evenly split between $3,000 for operations costs and $3,000 for rental assistance