A new Silicon Valley-esque boomtown on the west coast is getting so popular that it’s sparking a housing crisis.
Olympia, the capital city of Washington state, had the fastest growing technology sector in the United States from 2018 to 2023, according to a report this week from the Milken Institute.
‘Olympia’s high-tech sector truly stands out,’ the report says, also noting that growth in the city’s professional services and information technology sectors outpaced the nation as a whole.
‘Olympia’s best-in-nation five-year high-tech GDP growth has been primarily driven by the computer systems design, software publishing, and data processing industries, which jointly represent 35.5 percent of Olympia’s employment.’
However, the downside to being America’s eighth-best performing city, as ranked by the Milken Institute, is that there is a serious lack of affordable housing, and housing in general.
‘Housing shortages are severe in cities throughout the state of Washington, and Olympia faces some of the worst housing affordability conditions,’ the report said.
‘A 2022 report estimated that Olympia’s stock of housing units was 6.4 percent below what’s needed to meet demand.’
Beyond the actual lack of housing, more than 7,600 households in the city are considered ‘cost-burdened,’ meaning they spend more than 30 percent of their income on housing, according to Jacinda Steltjes, Olympia’s Affordable Housing Program Manager.
Pictured: An aerial shot of Olympia, which has been ranked as the America’s eighth best performing city by the Milken Institute
Rent insecurity remains an issue despite the high share of well-paying tech jobs, which is largely because not everyone has those jobs.
Some of the largest private employers in Thurston County, where Olympia is, are Albertsons, Walmart and Great Wolf Lodge.
The fact remains that the median hourly wage in the Olympia-Tumwater metro area is $27.33, which equates to around $56,000 per year.
So, if a median earner is living in the median apartment ($1,509), they are spending about 32 percent of their income on rent.
Generally, experts don’t recommend spending more than 30 percent of your pre-tax income on housing, but that rule of thumb is quickly fading away all across the country as rent and mortgage rates continue to trend upwards.
This, by no means, is a problem unique to Olympia or Washington state. Nationwide, there is an estimated home shortage of 4 million to 7 million.
And two cities that ranked slightly higher in the Milken Institute study – Colorado Springs in fifth and Austin, Texas, in sixth – both have issues with a lack of affordable housing.
Two Washington state agencies recently expanded on the affordability problem, revealing that 250,000 state residents ‘are severely rent burdened.’ This is defined as paying at least half your income in rent.
By that calculation, more than 3 percent of people are struggling to pay for a roof over their head out of the total 7.8 million residents in the state.
Olympia is home to its own data center as well. It sits on the Washington State Capitol Campus and spans 240,594 square feet
Olympia’s downtown is near the state capitol building and the aptly-named Capitol Lake
According to a report put together by the state’s Department of Commerce and Housing Finance Commission, there is also a housing shortage in general.
‘The state faces an estimated need for more than a million new homes in the next 20 years to meet housing demand at all income levels,’ the report said.
The report also said that out of the 1.1 million new homes that need to be built by 2044, 400,000 of them need to be affordable for households making zero to 50 percent of the area median income.
The prosperity driven by the tech industry seen by some in the city of Olympia and greater Seattle as a whole is mirrored by those who are still burdened by the build up of years of high inflation.
Rural Washington state is seeing its own wealth gap play out as data centers – huge buildings with hundreds or thousands of servers that power the internet – increasingly crop up and displace small town farmers.
Quincy, a tiny town roughly two-and-half hours away from Seattle, became the site for a massive 530,000-square-foot data center owned by Sabey Data Centers.
And just north of it is yet another data farm owned by Vantage Data Centers that spans 775,000 square feet across three buildings.
Even Microsoft has a data center in the town of just over 8,000.
And just north of it is yet another data farm owned by Vantage Data Centers that spans 775,000 square feet across three buildings
Pictured: The massive 530,000-square-foot data center in Quincy, Washington. It’s owned by Sabey Data Centers
The town now has a new high school that was built with property taxes that one union official described as ‘straight-up data center money.’
Yet, while the agricultural town is rich, the residents are not. Their gleaming new high school still has four out of five students that are eligible for free lunch.
Plus, locals are concerned the job market brought by the data center isn’t sustainable over the long term.
Bob Allen, a union representative, heard that Quincy might get a new 500-megawatt transmission line from a federal power authority.
‘That would give us another 10 years of work,’ he told the New York Times last month.
