October 6, 2005

GMA's success depends on local actions

  • But we need to look at the challenges it presents to local government, developers and nonprofits.
    Schwabe, Williamson & Wyatt



    Urban growth in the Puget Sound market is exploding. As a community, we know it and we are rigorously discussing how to deal with it in a way that will preserve, and even improve, our quality of life. As we roll up our sleeves, it's a good thing to discuss the legal framework that guides urban development.

    We, as a community, would be best served by talking more about Washington's Growth Management Act and the challenges it can create for local governments, developers and nonprofits navigating the slippery slope.

    According to Bob Thorpe of R.W. Thorpe & Associates, a Seattle-based urban planning firm, there are four important topics of consideration when it comes to discussing the GMA and urban development. These are urban sprawl, shortage of housing, traffic congestion and growth-related degradation of the environment.

    Urban sprawl

    The GMA requires cities to focus new development within urban growth boundaries. Adoption of such boundaries, the thinking goes, will preserve the lands outside the boundaries from the ravages of urban sprawl. There are differing opinions on effectiveness of this strategy. Some believe that our urban growth boundaries are drawn too tightly. Others project that, in the absence of growth boundaries, unchecked urban sprawl will eventually reach the base of the Cascade Mountains.

    But, market demand for large single-family homes remains strong, a factor that challenges the legal framework designed to prevent urban sprawl.

    In a survey conducted in 2000 by Public Opinion Strategies, 83 percent of respondents said that they wanted to live in an area where they can have large front and back lawns. Only 23 percent said it was important for them to live in an urban area with many people living close together.

    Despite it all, developers are betting that consumers will adjust to denser communities, as people become aware of the benefits of living in vibrant urban centers.

    Housing shortage

    A related issue is the shortage of affordable housing in our region. The housing shortage primarily affects first-time home buyers, who find themselves increasingly priced out of the market as housing costs rise faster than their incomes. It also affects lower-income renters, particularly those earning less than 30 percent of median income, according to FutureWise.

    The causes of the housing shortage are another subject of debate. Some believe that the shortage is primarily driven by the limited supply of buildable land within urban growth areas, the higher costs of infill development and cumbersome local permitting requirements.

    Others believe that the shortage is primarily driven by consumer demand for larger, high-quality homes and by the willingness of homeowners, in a region marked by natural and cultural amenities, to spend a large portion of their incomes on housing.

    The GMA requires that comprehensive plans provide for the existing and future housing needs of all economic segments of the community. Private markets, by themselves, will not ensure an adequate supply of affordable housing. Federal, state and local programs are needed to solve our housing problems.

    The city of Seattle has a variety of programs designed to stimulate the development of affordable housing. Since the adoption of the GMA, new multifamily housing has developed at a rapid pace in Seattle, accounting for a substantial portion of new housing units in King County. Yet, market forces ultimately determine how much of this new multifamily housing is affordable.

    For example, one developer is building a 200-plus unit apartment building which, if affordable housing had been included, would have qualified for a 10-year exemption from real property taxes under a city of Seattle program. While the exemption was very attractive, the developer declined to avail itself of the tax savings because of its assessment of the market. The legal framework did not make economic sense.

    Some are skeptical that the current boom in multifamily housing will provide the ultimate solution to our housing shortage. Infill multifamily housing is costly, and the local housing market is still dominated by single-family homes. Bruce Lorig of Lorig & Associates suggests that more densely sited single-family homes "is what will save us."

    Whether densely sited single-family homes can be made truly affordable is still an open question.

    Noji Gardens, a 75-unit Rainier Valley housing development, shows that it is possible to build affordable single-family homes in Seattle, but not without difficulty. Even with cost savings from manufactured components, low-interest-rate financing and tax abatements, the units had to be sold for $175,000 to $200,000 to be feasible. These prices were considered affordable in Seattle, where median home prices topped $300,000.

    Traffic congestion

    The oft-cited ideal of densely-built urban villages near centers of employment and recreation has yet to be realized. In reality, many workers live far from their workplace and spend long hours commuting, either by public transportation or in single-occupancy vehicles. A recent study revealed that Seattle commuters suffer traffic delays of 70 hours per year — equivalent to almost two weeks of vacation.

    Our regional traffic problems seem to defy solution. Still, developers and local governments can plan transit-ready developments that will afford a variety of transit options, including bike and walking trails, roads and highways, and bus and light-rail public transportation.

    As land becomes increasingly expensive, developments must make more efficient use of parking. Local regulations typically require that commercial developers furnish minimum parking to meet peak demand. And, major retailers frequently insist that developers provide parking that exceeds these minimum parking requirements. It is not surprising, therefore, that many parking lots are mostly empty except a few days each year.

    Gary Weber of Simon Property Group suggests creative approaches to land use for parking. For example, a mixed-use development may provide shared parking for compatible businesses, such as a movie theater sharing a parking lot with an office building. The parking lot would be used by the office workers during the day and by the theater at night.

    Environmental protection

    We live in a region that is renowned for its quality of life. Growth management must preserve what we have for future generations. We can do so by preserving existing green and open spaces, protecting critical areas, reclaiming brownfields and including green space in future infill development. The Cascade Agenda, a 100-year conservation plan developed by a diverse group of developers, conservationists and many others, lays out a series of legal reforms and market-based strategies to achieve these objectives.

    The success or failure of growth management strategies will be dictated by decisions made at the local level. But when municipalities are small, have limited funds and are in competition with each other, effective growth management is difficult. The consolidation of urban areas within cities should make the coordination of infrastructure with land-use plans easier.

    The GMA contemplates the transfer of urban areas from counties to cities. King County, faced with budget shortfalls, is actively supporting this transfer. The county is willing to consider incentives to encourage cities to pursue annexation of unincorporated urban areas. If cities are convinced that annexation will achieve their fiscal as well as political goals, the trend toward city control over urban areas may accelerate.

    Cities have the opportunity to get out in front and lead — not simply with enlightened policies and legislation but also with strategic planning that will direct the growth of their municipalities. The efforts of cities should be teamed with those of private and nonprofit entities which share their goals. Further, in light of the U.S. Supreme Court's recent Kelo vs. New London decision, local governments may have an even more powerful tool — the ability to condemn private property for private redevelopment.

    Effective growth management is challenging. While the urban landscape of tomorrow will be shaped by our current legal framework, the ultimate character of our communities will be expressed through the leadership, vision and creativity of the private, public and nonprofit sectors.

    Dennis Ostgard and Susan Peterson are shareholders with Schwabe, Williamson & Wyatt in Seattle. They both specialize in business and real estate law.

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