In this off-year supplemental budget session few major policy reforms or new budget paradigms were expected to gain traction in the Washington state legislature. Nor have they. Yet more nuanced policy, it was thought, just might have a fighting chance.
However, such hopes are easily dashed and the apparent roadkill this session includes carefully-tailored Senate-approved measures to address unaffordable housing, and one of the more approachable problems caused by the state’s aging Growth Management Act (GMA): finding suitable land for new schools in high-growth areas.
These near-term failures add to the longer-term possibility of far more sweeping change on housing affordability and GMA should the balance of power in the House shift after this autumn’s elections.
There are reasons for the rumblings.
An Eye-Popping $494,000
Housing in Central Puget Sound is becoming increasingly unaffordable. Median housing sales prices reached an eye-popping $494,000 in King County in the recently-released Q4 2015 Housing Market Snapshot by the Runstad Center for Real Estate Studies at the University of Washington.
That’s up 10 percent from a year ago, and second only to island-studded San Juan County. Snohomish County had the next highest median sales prices in the fourth quarter of last year, at $359,800. The statewide average was $292,900. There’s currently little more than a one-month supply of housing available for sale in King and Snohomish.
From 2008 into 2016, a series of reports have found that housing prices in King County are significantly padded and even “severely unaffordable” due not just to demand, but to restricted land supply caused by implementation of the GMA.
Under GMA, the focus is on high-density development within so-called urban growth boundaries in populous counties, and strict limits on residential density on the other sides of those lines, to preserve farmland and open space and avoid creeping development.
Preservation Tax Credit Tanks
A broad bi-partisan coalition including suburban mayors, business and Seattle housing activists successfully advocated for passage in the State Senate of a bill, SB 6239, that would have let cities or counties exempt housing rental owners from property taxes for 15 years if they made at least 25 percent of their preserved building’s units available to low-income renters at affordable prices.
The measure that cleared the upper chamber would have opened the door to the tax exemption for private sector or non-profit housing developers, under stringent qualifying conditions. But in the House it was amended in one committee to only apply to non-profit developers. Another committee voted to lift that amendment, but the bill now sits dead in the Rules Committee.
Says State Rep. Hans Zeiger (R-25th), “This is a creative, voluntary, incentive based approach that holds a lot of promise. There’s more work to do on this policy for next year, but I think we can reach a deal that’s good for a lot of people.”
Another bill that cleared the Senate was SB6426 to allow the classification of new schools as “essential public facilities” under the state’s 26-year-old Growth Management Act and thus allow their construction outside so-called “urban growth area” (UGA) boundaries in more populous counties.
It was strongly supported by school superintendents who testified that population growth is overwhelming some of their existing facilities but new school sites inside the UGA are increasingly few, unsuitable, and exponentially more expensive.
The bill was opposed by environmentalists and planners. After Senate passage, it swiftly died in the House.
Growth Management Changes Ahead
Broader reforms are already in the sights of House lawmakers and there were preliminary skirmishes this session. HB 1373 to repeal the GMA was introduced, but gained no footing, as in 2015. A contrasting House measure which attempted to authorize a rushed and very limited review of of GMA, with a final report delivered just prior to Election Day 2016, also failed.
Something has to give, because another million people are coming to Central Puget Sound, and another half-million residences. Somewhere.
The Puget Sound Regional Council breaks it down. The planning agency reports that in 2015 population had grown since 2000 in King, Snohomish, Pierce and Kitsap Counties by 20 percent to nearly four million, and households by 22.6 percent to 1.57 million.
PSRC’s future projections are for 4.9 million residents and 2.1 million residences in the region by 2040, increases from PSRC 2015 data of 24.2 percent and 33.6 percent respectively. Where they will live and at what price is a question with important, but unknown answers.
‘Growing A Sustainable Region?’
Champions of growth management, the PSRC boasts on its web site it is “growing a sustainable region.” But says the Chief Economist of Windermere Real Estate, Matthew Gardner, thanks to the GMA, we’re doing anything but that.
Speaking last fall to a work session of the State Senate’s Government Operations and Security Committee, Gardner said median housing sale prices in King County are “now knocking on $500,000,” and finished lot values are up 50 percent-plus over the last five years, so that in North King County they’re going for $300,000 and the homes built upon them for north of $900,000.
’This Is Unsustainable’
“This is unsustainable,” even now with low interest rates, and will be even less so when rates rise a point or two by 2017 to 2018, the economist told lawmakers.
However, relaxing urban growth boundaries to allow more affordable single-family housing within striking distance of jobs also means the region must get more serious about building and paying for a comprehensive transit system as convenient and usable as the Bay Area’s BART, Gardner added.
Voters will have an opportunity in November to approve more funding for Sound Transit’s express buses and high-cost, low-yield light rail. Depending where you sit, that may or may not comprise further build-out of a feasible regional transit system.
Time For GMA Overhaul
Meanwhile, GMA reform is certain to resurface. The questions are when, and exactly how. Said Zeiger: “I was five years old when GMA was written, and now I’m a father. A generation has passed. The goals of GMA were noble, but we have been too inflexible when it comes to implementation. Any policy attempting to deal with growth and development ought to be revisited at least once a generation.”
Added Zeiger, “If our goals are to conserve the best arrangement for communities, and to conserve our natural environment, we must have a stake in the strategies to achieve these goals. I believe that we should at least be open to some change in GMA if we are going to persevere” in pursuit of its goals.
According to David Hoffman, North King County Manager for the Master Builders Association of King and Snohomish Counties, “It’s been 26 years since GMA was adopted. it seems appropriate to review the goals, and outcomes, of implementation to see what’s working and what isn’t. The key question is this: how do we measure success. Is it simply matter of the percentage of growth occurring within the (defined) urban area or should there be several measures taken into account? Perhaps housing cost and availability and access to family wage jobs should be key factors helping to determine GMA’s success. Only then can we answer the question, “has Growth Management been a success?”
In the meantime, said Zeiger, a resident of Puyallup, in more affordable Pierce County, “I have found myself lobbying multiple friends who work in Seattle to move down to Puyallup and enjoy the Sounder train (Sound Transit’s popular commuter rail line) up to Seattle for work. The commute is less than an hour, and the ride is enjoyable. Whatever difficulty they may encounter once they get off at King Street Station in getting tot heir final destination, the commuter experience is likely a small fraction of the difficulty of the cost of living in Seattle.”