6-13-2003
Growth Management Act continues
driving up housing prices
By George Lewis

There was a painful irony in a recent upbeat newspaper story about a man of modest income who was able to continue living in King County, only because he could rent a government-subsidized apartment for $850 a month. Without the subsidy, the rent would probably have been at least twice that high.

On the other hand, in Grant County, he could rent an apartment in a gated community for less than $850 a month – and without government subsidies. Grant County, in the Moses Lake area, is in a much more conservative part of the state, where environmental extremists do not have the political clout to ban home building over vast areas under restrictive “open space” laws assisted by the state’s Growth Management Act (GMA).

The severest unintended consequence of the GMA is that it dictates an artificial scarcity of buildable land which drives up its price and therefore housing prices. Even with, and perhaps to some extent because of, today’s record low interest rates, the stock of “affordable” housing — first homes that young families can afford — is all but non-existent in many parts of the state. The problem is especially acute in Kitsap, Pierce, King, Snohomish, Thurston and Clark Counties. And to a lesser extent in Whatcom, Island and Jefferson Counties.

As housing prices began to skyrocket after the GMA was passed in 1990 and all previously zoned land had been built on, the problem worsened.

Token amounts of “affordable housing” have been provided through government subsidies. such as programs instituted by the Kitsap County Consolidated Housing Authority (KCCHA), which even builds “affordable” ($300,000+) housing for residents of Bainbridge Island as well as others part of Kitsap County.

In other words, by the GMA making housing unaffordable for many people, government then has an opportunity to spend tax dollars to provide a relative handful of people with housing that is almost as affordable as it would have been if the government had left things alone in the first place.

It is a classic example of what Adam Smith called a “most unnecessary attention” by politicians to things that would be better off without their interference.

Ironically, the year before the legislature — with the help of then-Governor Mike Lowry and Sen. Mary Margaret Haugen of Camano Island —shoved the GMA down the throats of the citizens of Washington, an almost identical law — Initiative 547 — had been voted down by an 80+ percent margin of the voters. The GMA is clearly a shining example of politicians thinking they know what’s best for the citizens — in spite of what the people clearly state they want.

It has been nearly 50 years since it as revealed that the federal government had destroyed more housing through urban renewal than it had ever built. Now state and local governments al over the nation are in essence banning housing under laws such as the GMA.

Meanwhile, politicians, editorial writers and others who wring their hands over a lack of “affordable housing” turn to government to solve a problem it has created.

Politicians seldom want to solve any problem by simply stopping what they have been doing to create the problems. And nowhere has that been proven more than in the Washington State legislature. One needs to look no farther than the budget and insurance crisises the state currently finds itself in. Instead, legislators come up with new programs that ignore the real cause.

Why can’t that gentleman in King County afford to live there without those subsidies? A major reason is that building housing is banned on more than half the land in the county, with environmentalists constantly pushing for more “open space” and more restrictive zoning laws.

You cannot take vast amounts of land off the market without driving up the price of the land that is still left on the market. That’s Economics 101.

Some people naively believe that you prevent growth by preserving open space and restricting zoning. But it is just the opposite. With or without the GMA, the larger the amount of land where nobody can live, the more crowded and expensive is the land where people are allowed to live.

Those who are pushing for even more open space are not all naive, however, even if some of their followers are. Bans and restrictions on the use of land enables the affluent and the wealthy to keep out the diverse masses and preserve the character of the upscale and rural communities where they live.

Making housing unaffordable to other people is the most effective way to preserve the little enclaves of the elite. It also raises the value of the homes and land they already own.

Stratospheric rents and housing prices are an acute problem in localities where there are drastic restrictions on building housing. Politicians, however, claim there is a “national” problem that calls for massive federal government programs. In reality, luxury housing in most of the county costs less on a square footage basis than very ordinary housing where restrictive zoning abounds.

Unfortunately, those who look to government for housing solutions seldom consider how many of our existing housing problems are a result of the “most unnecessary attention” of politicians and bureaucrats.