Addressing Washington’s housing affordability crisis

Addressing Washington’s housing affordability crisis
An “unprecedented” housing summit featuring public and private sector stakeholders could spur more collaboration on new policies to improve housing affordability in Washington state. Photo: freepik.com

A housing summit in Bellevue involving various stakeholders from the private and public sectors could represent a turning point in a statewide housing crisis and may lead to a more collaborative process to address the issue in the future.

The Association of Washington Business (AWB), the state’s chamber of commerce, was one of the groups behind the July 8 event. AWB Director of Government Affairs Mike Ennis told Lens the summit was “unprecedented” in the terms of those participating, which represented builders, ports, major state-based corporations and rental advocates. He said the event “puts people on notice” that a more effective approach to crafting policy is coming.

Housing affordability “is not a partisan issue,” he added. “If it is, it shouldn’t be.”

According to Ennis, the housing summit was planned prior to this year’s legislative session, which saw a variety of housing-related bills considered. However, one of the challenges is that introducing a proposal for the first time via legislation can take years before anything is passed and signed into law; that is usually how long it takes for all the different stakeholders to review the proposal, offer feedback during public hearings and then have the bill language amended to incorporate the necessary changes for it to satisfy any objections that may prevent its passage.

Because of that, the 2020 session will likely have legislation brought up this year such as SB 5812 concerning accessory dwelling units. Among those voting against the measure was Sen. Hans Zeiger (R-25), one of the panelists at the housing summit. Although he spoke in favor of local government autonomy when SB 5812 received a vote on the Senate floor, at the housing summit he told attendees that “as we respond to the housing shortage in our state…we have to take the approach that we cannot solve this as a government by just saying ‘We’re going to subsidized housing.’ We can’t solve it by saying that ‘We are going to regulate the housing market.’ I think those are misguided approaches.”

Rep. Andrew Barkis (R-2) is an active member of the National Association of Residential Property Managers and the National Federation of Independent Business. One of the changes he envisions is policymaking that fully incorporates all sides of the discussion. “When we have a strong emphasis from one particular body….we end up with what I would consider overburden in a regulatory environment. We need to be very cautious about the legislation that we propose that’s going to create more issues rather than solve the problems.”

LouAnne Neill is the owner of Neill Construction Services. She told attendees that “from the banking standpoint, we’re almost strangled by regulation.”

One of the hopes builders have is that a more balanced conversation will call greater attention to any negative effects on their industry. Aside from the expense of different fees, delays on a permit application and building code requirements can add thousands in costs. Neill said that a 30-60 day delay on a 4-5 month home construction project can wipe out any profit the builder might make.

“Years ago…profit margins for builders were maybe 17-18 percent on the gross and maybe 10-12 (percent) on your net,” she said. “(Now) there’s an awful lot of builders that operate on 4-6 percent net profit margins, and that’s difficult.”

Another strategy to improve policy outcomes is for builders to provide more input regarding building code requirements such as electric vehicle plug-ins or internal door security features, according to Anne Anderson. She is a principal with Green Mountain Structural Engineering.

She added that builders during the permitting process “need to…perhaps…say ‘You know where in the building code does it says that this is required? What you’re asking is going to make a delay. Why can’t we just fix it here?’ There needs to be a little bit more interaction to get those permits through and for the regulatory agencies to understand…when they delay that for pretty minor things.”

However, other factors contributing to the housing shortage may take longer to address. That includes a growing labor shortage. SoundBuilt Homes CEO Kurt Wilson remarked that “I used to build a house in 2008 in about six and a half months. It takes me 13-15 months to build a house now. Our workforce is aging, and the replacement of those people are slim. To help out, we need help from the state to help direct funds to trade schools and things of that sort. Until that happens, the affordability as far as housing goes – it’s only going to keep going up.”

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