The Happy Valley Neighborhood is located at the foot of Sehome, Samish and South Hills. Historically, this area served as a residential neighborhood with many of the early residents working in the Fairhaven Cedar Mill and Salmon Cannery. A street car along Harris Avenue connected Happy Valley to the Historic Fairhaven waterfront. Many early residents of Happy Valley had single family homes on smaller lots near the Fairhaven area and larger "garden tracts" in the rest of the valley.
Since the 1960's, a large number of apartments have been constructed in the northern section of Happy Valley. The majority of apartments are located close to the WWU campus and directed towards WWU student housing. WWU reported 13,076 full- and part-time students in the fall of 2005. To accommodate the growing WWU student and community population, construction of new apartments continues today. The majority of apartments are clustered around 32nd Street, 21st Street and Bill McDonald Parkway.