February 27, 2003

Affordable housing still GMA challenge

  • 12 years after GMA, there is a lack of affordable housing
    Bennett Homes


    One of the 13 goals of Washington’s Growth Management Act is to encourage the availability of affordable housing. The goal is recognition of the important role that housing plays in our communities.

    Not only is housing an intricate part of our local economy, but having an adequate supply of affordable housing strengthens families and communities and contributes to our overall quality of life.

    Twelve years after the Growth Management Act’s (GMA) passage, the affordability goal has proven to be particularly challenging, especially in the Puget Sound region. The median home price in King County in 2001 was $244,000. And yet according to the 2002 King County Benchmark Report, a family earning the median household income of $61,400 could only afford a home priced at $214,000 or below, assuming these families could produce a sizeable down payment.

    This creates an “affordability gap” of $30,000.

    The disparity is even greater for first time homebuyers, who typically earn 80 percent of the median income. A first time homebuyer earning $49,000 in 2001 could afford a home priced at $162,000 or below, creating an affordability gap of more than $80,000. On balance, only 16 percent of all home sales in King County in 2001 were affordable to households earning 80 percent of the median income or less.

    Clearly we have fallen short of achieving the GMA’s housing affordability goal. In order to address this issue, it is important to consider the many factors that impact the price of homes:

    • The availability of land — In order to reduce sprawl and protect the environment, the GMA directs growth into urban areas where it is easier to provide infrastructure to residents. Because much of the land contained in these urban growth areas is either already developed or environmentally sensitive, the supply of land available for new construction is limited. This drives up land costs, ultimately impacting the price of homes.

    • Length of permitting processes — Once a builder has committed to a project, delays in getting permits to build can be very costly. This is due to the cost of financing land and the need to plan for construction.

    • Impact fees and other mitigation measures — Impact fees are often levied on new construction to help pay for roads, parks, schools and other infrastructure. These fees vary depending on which jurisdiction the home is in, but in most cases they are paid by new homebuyers.

    • Regulations, taxes and fees — A survey conducted by the National Association of Home Builders indicates that between 10 to 24 percent of housing costs are attributed to federal, state and local taxes and government regulations. These regulations result in higher prices for new homebuyers as well as drive up the prices of existing housing in our region.

    • Zoning laws — Many local zoning laws actually discourage innovative, affordable housing types, such as cottage housing and mixed-use developments, which bring residential and retail together.

    • Resistance to infill development Similarly, resistance to infill development can also act as a barrier to affordable housing in some neighborhoods by creating costly delays in projects or blocking them altogether.

    The homebuilding community is concerned about the combined effect of these factors on the overall affordability of homes. While there are steps government can take to provide assistance to families in need of housing, it is ultimately the private sector that provides a majority of the housing in our region.

    Too many communities lack the supply of affordable and available housing needed to meet the high demand. The challenge is finding the right balance between the GMA’s housing affordability goal and the other important goals of the act, such as reducing sprawl and protecting the environment.

    We need to balance these goals very carefully, protecting the natural environment that all of us enjoy while acknowledging the important role that housing plays in our communities.

    To the extent that local jurisdictions can promote more efficient and predictable permitting processes, enact zoning laws that encourage innovative, affordable housing types and encourage infill development, including condominiums and other affordable housing, we can go a long way toward achieving the GMA’s housing affordability goal.

    Achieving this goal is just as important today as it was when the law was enacted 12 years ago. The availability of affordable housing is critical to our local economy because a home is where a job goes at night. Furthermore, affordable housing helps build a sense of community and maintain a quality of life that we all enjoy.

    Todd Bennett is president of the Master Builders Association of King and Snohomish Counties and chairman of the Bellevue-based non-profit Downtown Action to Save Housing. He is also president of Bennett Homes in Bellevue.

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