A century and a half ago, Bellingham, Wash., was a small mill town on the Pacific Coast. Then came the Fraser Canyon Gold Rush, luring thousands of fortune-seekers to the area from California. After the rush, shipping became the economic mainstay. These days, retail, trade, healthcare, manufacturing, and education keep the city humming.

"We have clean air and water, good schools, proximity to large cities without having to live there, [and] great recreational opportunities," explains Lylene Johnson of the Muljat Group South, a local real estate broker. The nearly 90-mile commute to Seattle keeps Bellingham from serving as a bedroom community, a plus for those looking for less expensive housing on or near the water.

Several residential, commercial, and mixed-use projects have been completed since 2000, and many more are on the boards. The biggest project now is the redevelopment of 220 acres of prime waterfront property on Bellingham Bay, adjacent to the central business district. Now in the planning phase, the first part of the development, a marina, could be online as early as 2008.

But not everyone is excited about Bellingham's growth, and managing public opinion is a challenge. "There is a lot of resistance to increasing density within existing neighborhoods," says Michael Smith, principal of Zervas Group Architects. "That leads to increased pressure to expand the urban growth area, which is also met with a lot of resistance."


Bellingham's population grew by 2.4 percent to an estimated 75,220 in 2007, the highest rate in the past six years. Employment outside the farm sector grew by 1,600 jobs for the 12 months ending in July 2007. Most of that was in the service sector, which includes retail, transportation, and professional employment.

Occupancy in the city's office buildings is high, at about 97 percent. Average asking rates range from around $11 per square foot to the mid-$20s in newer space.

Median home sale prices have risen $40,000 since 2003, to $377,894 for the first half of 2007. The median condominium price at midyear 2007 was $199,995.


  • Educated workforce (Western Washington University)
  • Proximity to large domestic markets including Seattle and Redmond, Wash. and Vancouver, Canada
  • Gateway to natural areas


  • Sprawl
  • Resistance to increased housing density
  • Rising home costs


"The largest challenge is how to grow the economy beyond the service sector to better provide family-wage jobs in a rapidly increasing housing market," notes Brad Cornwell, principal for RMC Architects. "Also critical will be how to manage the incoming growth in a manner acceptable to established residents and in a location with restricted geographic constraints."