02/10/2008: "Part Two: Sustainable"
Population growth cannot be sustained without addressing the issue of affordability.
It is people not just the natural surroundings that distinguish and characterize a place. The prescription we’ve swallowed for protecting the natural environment first, and the people last, has had a nasty side effect. We are seeing our social environment crumble beneath our feet. Fewer taxes and less regulation are proven solutions that can bring us back into balance once again.
We got out of balance when we started down the road to protect the environment by limiting housing alternatives, reducing density, and preserving buildable land until we choked out the very social diversity we once cherished. Our demographics show an aging population with more deaths than births, fewer people living here year around, declining school enrollment, and the exodus of working families. If we keep going in this direction we will destroy the very things that attracted many of us to the Islands to begin with.
The ability for many people to afford to live here has been greatly diminished. It happened so fast that it took many of us by surprise. Those whose income is derived from retirement or investments outside the community are rapidly replacing people who once had the ability to live and work in the islands. Many of them simply could not find adequate year-around employment or couldn’t afford the taxes anymore.
Our community is now burdened with oppressive regulations that dramatically increase the cost of building even modest homes. We suffer from shortsighted planning which has failed to provide enough land where affordable lots and homes are permitted. We need to address this barrier to affordability first.
The “law of supply and demand” is a significant factor in higher housing costs. New regulations and “feel good” programs have helped create a situation where demand has exceeded supply. Our irrational fear of growth produced the down zoning that recently took more than 15,000 potential parcels off the map. If the supply of buildable land is restricted in the face of growing demand the price will go up. This result has been demonstrated to be true beyond a doubt.
The complexity of processing a permit has significantly increased the cost just to apply for one. Regulations on land that slopes or contains a wetland or is near water require engineering and environmental studies that can be very expensive. The cost of compliance and permits for designing and building septic systems have dramatically increased in the last 10 years. Water availability permits and the cost of drilling and registering a new well has increased exponentially because of regulation. Many of these restrictions on new development were put in place to discourage growth. Instead these restrictions fundamentally changed who could afford to live here and who could not.
Delays and uncertainty in permitting also add to the costs for new construction. Applicants are forced to pay interest on construction loans when permits are delayed. Restrictive building codes add time to construction and increase costs. After years of wrangling over the Comprehensive Plan in order to streamline permitting, and after adding more each year to the budget for staff, the process remains slow, expensive and uncertain.
The Land Bank and other programs that take buildable parcels out of the inventory and extinguish development rights on other parcels adds significantly to the price of the remaining available land. I have supported these programs wholeheartedly but recognizing when these programs have reached the point where they can do more harm than good is crucial.
There are many examples where these programs have changed the dynamics of communities and made them unaffordable to all but the very wealthy. We may have reached that point. More than half the land in our county is set aside in tax deferred status. The remaining parcels are taxed more to offset the tax shortfall. It is important to remember that under such programs the unintended consequence is the artificial scarcity of buildable land, which drives up taxes, land prices, housing prices, and drives out our longtime friends and neighbors.
Future sustainable growth of the economy in San Juan County will require a healthy building industry that provides houses for the natural migration of people who choose to relocate in the islands. This predictable population growth is essential to the growth of our economy, it is an important source of new construction tax revenue, and provides future property tax revenue. Construction is one of the few industries that provide year-round living wage jobs. If we continue to hinder and over-regulate this industry our economy will suffer and we will be forced to find additional revenue by raising other taxes and fees thus exacerbating our affordability crisis.
Can any barriers to affordability be taken down? Absolutely. We can bring back balance by repealing policies that are failing. We can support working families by supporting childcare resources and other family services. We must encourage businesses that create jobs, and abolish regulations that add unnecessarily to housing costs. These should be priorities for affordable and sustainable growth.
Part 3: Economic Growth (shameless teaser)
We suffer today from planning that has caused some fundamental problems with regard to sustainable growth. We need to be willing to solve some problems by simply stopping what we have been doing to create them instead of coming up with new programs that ignore the fundamental issues.