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02/14/2008: "UW Study: Regulations Raise Housing Costs"

It is not news that many in San Juan County have said one reason for the lack of affordability of housing in SJC is due to the ever increasing regulations.

But even they may be surprised by a new study that shows regulations can add a lot to the cost of a home: as much as $200,000.00 in Seattle.

Former County Commissioner John Evans and others have repeatedly testified to any group that will listen that the effect of removing the amount of land that can be used to construct a home on, is also driving up the cost of construction on the remaining undeveloped land.

For those who have sounded the tocsin that the county is in danger of becoming a home for only the well-to-do, they have just received support from a member of the economic faculty at the University of Washington.

Professor Theo S. Eicher (photo above -UW photo), a R. R. Richards Distinguished Scholar and the founding director of the UW's Economic Policy Research Center has produced a study entitled “Growth Management, Land Use Regulations, and Housing Prices: Implications for Major Cities in Washington State” “Growth Management, Land Use Regulations, and Housing Prices: Implications for Major Cities in Washington State”, which is scheduled to be published in the Northwest Journal of Business and Economics. His paper sets out compelling arguments for understanding the true costs of regulations.



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Professor Eicher’s paper found that not only regulations, but “local approval delays still contributed about $30,000” to the total increase of costs in Kent and Everett, but noted that “regulatory impact is generated largely by statewide measures. By far the greatest impact is generated by statewide restrictions imposed by the level of activity in the Executive and Legislative branches over the past ten years in Washington State”.

It becomes clear in his report that the “level of activity” causing the problem is the Growth Management Act (GMA) that has played a major role in driving up the costs of purchasing a home.

He suggestions that it is “therefore, imperative for any regulation policy intervention at the municipal, county or statewide level to be accompanied by strong follow up analyses regarding their impacts on housing prices.” He also states that “while higher housing prices represent a windfall for sellers, they constitute a redistribution from buyers to sellers and reduce housing affordability.”

Sounds familiar. The question is, will the County do anything about it, pay any attention to it, or address it in any way.