While some progress was made towards addressing our state’s housing crisis during the recent legislative session, the challenge of ensuring working families can afford to own a home in Washington state still looms large.
The Building Industry Association of Washington (BIAW) partnered with unlikely allies, including the Association of Washington Cities, Futurewise and the Washington Low Income Housing Alliance to pass legislation that will increase the construction of condos and improve urban capacity. However, neither of these new laws will have a significant impact on Washington’s housing crisis. There is still much left to do.
It is imperative that Washington continues to address how to achieve market-rate affordability in our housing supply. The residential construction industry faces problems including but not limited to infrastructure gaps, the lack of a skilled workforce, increasing regulatory burdens and ever-skyrocketing fees. It is long past time to focus directly on the cost of new home construction and what is driving increased prices, beyond inflationary adjustments. BIAW is committed to educating and raising awareness on these issues for the next session and beyond.
We do, however, see signs that there is bipartisan support and momentum building for real solutions. While signing the capacity bill, Governor Inslee declared, “If you care about ending homelessness, build more houses.”
We need to take a hard look at best practices in land use, infrastructure growing pains, factors that drive costs up in housing and development projects, along with how we can attract development in both rural and urban communities.
Recently at a meeting in Puyallup with Pierce County Executive Bruce Dammeier and former State Sen. Guy Palumbo, the chief economist for the National Association of Home Builders, Robert Dietz, told the crowd: “It is widely understood that a lack of inventory – particularly a dearth of new construction at affordable price points – is the primary cause of today’s housing challenges.”
Our state woefully lacks supply – one of the primary drivers for increased housing prices. Tariffs on building materials have pushed prices on items like lumber and iron onto a roller coaster ride for months. Layer upon layer of regulations, long permitting cycles and unpredictable appeals all create an uncertain environment that also drives up the cost of new home construction. In fact, a single-family home’s permit paperwork alone can reach heights over seven inches – no wonder the approval process takes so long and is so costly.
Higher home prices impact access to attainable housing and homeownership. In Washington state, the median new home price is $505,729, well beyond the means of the annual income of the average working family. For every $1,000 increase in price, 2,393 people are priced out of the market.
These issues are getting a well-deserved hard look. Former Governor Chris Gregoire, CEO of Change Seattle, is leading the effort for the alliance of CEOs from 17 of the region’s largest employers seeking solutions to the Puget Sound’s Invisible Crisis, the lack of attainable housing for middle-class families and individuals. Former Governor Gary Locke is also seeking solutions as a member of Seattle’s first-ever Affordable Middle-Income Housing Advisory Council.
But the fact remains, inventory is lacking across the board for millennials seeking to buy their first home, as baby boomers stay in their homes for longer periods of time instead of downsizing and opening up inventory since they cannot replace what they currently have at a lower price point. We are missing the “middle rung” of the housing ladder between a starter home to the next step for many families.
The lack of housing that is affordable for working families is the focus of a day-long Housing Forum on July 8 in Bellevue. We are proud to join in this event and to partner with the Association of Washington Business, Washington Public Ports Association, Association of Washington Cities, Washington Realtors Association, Washington Roundtable, Washington State Association of Counties, Seattle Metropolitan Chamber of Chamber, Rental Housing Association of Washington, and Greater Spokane Inc.
Together, we have the expertise and tools to take a hard look at the work that remains to be done. As one of the leading industries in our state’s economy, home builders and remodelers have a unique viewpoint to share on this topic. From what consumers are looking for to the cost of regulation on home construction, at BIAW we are dedicated to educating decision-makers and looking to be a part of the solution.
Greg Lane is the Executive Vice President of the Building Industry Association of Washington (BIAW).