Demographia has just published a study, authored by Wendell Cox, that compares the affordability of housing in the international marketplace. The conclusions show that while Washington State isn’t the most expensive, it is on its way to the top spot. What’s sad is it’s all avoidable with some simple changes to state policy. Currently Seattle ranks 73 out of 100 of the most affordable places to live.
The study summarizes that the high prices are ‘largely the product of policies that seek to limit growth on the periphery’ of municipal boundaries. In Washington, this policy is called the Growth Management Act (GMA) and the legislation has restricted available buildable land since its passage in 1990.
While Washington hasn’t seen a population decrease, other states are starting to see the effects of overly restrictive building policies.
California has seen its population drop from 40 million to under 39 million in the last 4 years and shows no signs of stopping. This is despite the large number of foreign nationals entering the state. The number one reason quoted by California residents for leaving the state is housing unaffordability. The really bad news for California’s bloated state budget, is the people leaving are the ones making the most money and paying the highest amount of taxes.
Washington, insulated by some of the region’s largest employer’s employment demands, hasn’t seen the same decline, but things can change quickly. Disruptive technologies, such as AI, can change the demographics for the workforce. Some workers who have been used to making above median wages could be seeing reduced availability of working hours or even elimination of job sectors. In Washington, where housing prices are somewhat driven by the tech boom we have seen over the last 3 decades, many service industry jobs average salary no longer is enough to pay for even a modest home.
So what’s the solution? It’s simple demand and supply. The more housing availability we have, the lower the price of that housing. Washingtons problem is when the Government steps in and restricts the supply, the price goes up.
Regulations that add to the cost of housing, ban natural gas stoves and other restrictions all add to the cost of a home.
Washington has the ability to avoid California’s plight with some simple changes. In the case of the GMA, updates to allow expansion of municipal borders for new construction would be a simple legislative change that would yield results within a few years. Currently the GMA forces municipalities to meet population targets though annexation (the consumption of existing surrounding neighborhoods into the city limits) or upzoning to higher densities. Another easy change would be the relaxation of municipal population target goals which force cities to make zoning decisions not always in the community’s best interest.
The Washington legislature should look closely at the cause and effect of the restrictive housing policies in California and make the necessary changes in Washington before it’s too late.
Mark Harmsworth, Director, Center for Small Business, Washington Policy Institute
About Mark Harmsworth
Mark Harmsworth was elected in 2014 to the Washington State House of Representatives where he served two terms. His focus was on transportation and technology, including serving as the ranking member on the House Transportation Committee.
Prior to the legislature, Mark served two terms on the Mill Creek City Council and was elected Mayor Pro-Tem in his last year.
He recently finished serving as a Director on the Everett Community College Foundation Board and also served as a Director on the Boys and Girls Club of Snohomish County until 2021.
Mark works in the technology industry and is an owner of a small business after completing a long career at Microsoft and Amazon.
Mark and his family live in Mill Creek, Washington.
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