10/01/2005: "Availability Of Services & Relative House Prices Are Separate Issues"
To the Editor:
In his lengthy letter about affordable housing (Baby Boomer's Money Outweighs Loss of Lots) Paul Losleben repeatedly offers as accepted wisdom a number of points that are not supported by the record.
While not directly related to housing costs, Mr. Losleben asserts that the lack of county wide code/zoning (in the Bitterroot Valley in Montana) has resulted in "a degradation of the beautiful natural environment and quality of life." He failed to note that more comparable communities (Nantucket, Martha's Vinyard and Aspen) have been employing development codes for 20 to 40 years longer than us, and since our code is so similar (both in actual wording and in intent) that we can have a high degree of confidence that we'll end up like them.
Well meaning people might want their local county government to do something to ameliorate the effects of high housing costs. However, in a free society that honors property rights, there is little that a county can do. But they try anyway. The cost of a new house is overwhelmingly a function of the price of materials and labor. When demand pushes up existing house prices one consequence is a boom in construction (something that we have seen recently). And excepting for the vigorous opposition to new construction from "green" political forces, this would normally be expected to lower housing costs.
My friend, a knowledgeable retired construction professional, is helping his son-in-law build a house near Friday Harbor. He recently asked me if I could explain how it is that their actual costs for just materials totals to a cost-per-square-foot number that is as much or more than the comparable number that he has seen in advertisements for newly completed houses in the Midwest (which also include the cost of land and installed utilities).
Existing house prices might be bid up according to Mr. Losleben's hypothesis; however, the high price of new house construction is attributable to high costs of labor and material. Regulations certainly add to the cost, however, the bottom line is that our affordable new housing "problem" could be solved if we could obtain the market efficiencies achieved by homebuilders elsewhere.
He evidently believes that ordinary working folks are priced out of the local housing market. This may be true; however, before accepting this as an important fact I would like to know whether these priced-out would-be home owners are the same people that cannot deliver a modestly priced house. I would also like to know why we should expect our local leadership to come from residents that cannot afford their houses. Why should we not expect that the newly arrived wealthy "outsiders" might provide these services? Even more prescient, why should we be concerned with enabling the continued presence of anyone that cannot afford to be here?
Lastly, Mr. Losleben labors under the assumption that the relative level of service is adversely affected by ever higher housing costs. This simply cannot be validated. Individuals might be priced out, however, increasing wealth consistently results in increasing levels of service. The service providers many end up having to live elsewhere. Here in the San Juans, they may not be able to afford to own homes and reside as our neighbors, and some might bemoan this. But they will be here. They'll live aboard boats or in quarters provided by those to who want the service.
The matter of the availability and affordability of services is an important subject. We would benefit from a discussion of whether or the extent to which we might want to subsidize some service providers. However, the matter of housing prices is a separate subject, and confusing these two separate subjects as being two sides of the same coin results mostly in muddled policies and few if any actual benefits.