A recent study suggested that nearly half of the cost of a home in the Seattle area is due to land-use regulations. The study, by University of Washington Economics professor Theo Eicher, was highlighted in a recent article in the Seattle Times.
Professor Eicher’s research shows that the median inflation-adjusted price of a Seattle house is now $447,800. He claims that “fully $200,000 of that increase was the result of land-use regulations”¦twice the financial impact that regulation has had on other major U.S. cities.”
Eicher attributes the doubling of homes prices in Seattle to:
“¢ the state’s Growth Management Act which restricts available land and creates artificial density;
“¢ long building permit approval times;
“¢ building and permit fees;
“¢ and municipal land-use restrictions.
According to the Times, the rules and fees mean the median family in King County has just 37 percent of the financial wherewithal to buy the median-priced single-family house ($477,000). Five years earlier, when King County’s median-priced house cost $282,500, median-income, first-time buyers possessed 72 percent of the income needed.
The effect in the Portland Metro Area is basically the same. Most of the families in Oregon can no longer afford the median-priced home.
This leads to what some call a lack of “affordable housing.” But the same people who pushed the policies that led to the affordable housing problem in the first place now want taxes, fees and government subsidies to address the problem they refuse to take responsibility for creating.
The buzzword around Oregon 10 years ago was “livability.” That has been replaced with “sustainability.” Neither word describes Portland’s housing market very well.