How GMA could help – or hurt – housing crisis

How GMA could help – or hurt – housing crisis
There appears to be consensus that revisions to the state Growth Management Act are needed to address the housing crisis; stakeholder priorities reflect how the law affects their regions. Photo: freepik.com

After decades of planning under the state Growth Management Act (GMA), a significant number of builders, housing advocates, and state lawmakers believe the law requires updates in order to address a growing housing supply and affordability problem affecting all parts of Washington.

However, views diverge when it comes to what approach GMA should take regarding local flexibility for planning and zoning. While some advocate a stronger top-down strategy forcing local governments to adopt higher density requirements, others believe GMA should loosen growth restrictions for rural areas – parameters which are intended to prevent urban sprawl.

Under GMA, cities and counties must conduct regular comprehensive plan updates regarding zoning and land use. Within counties’ unincorporated areas are designated urban growth areas (UGA) that permit greater density and land uses than rural areas. Among the many criticisms of GMA is that it is both overly prescriptive and too hands-off, depending on the specific policy involved. Regardless, the result is a lack of housing where it’s needed and expensive prices wherever it happens to be available.

Washington Farm Bureau Associate Director of Government Relations Bre Elsey is among those who say more local autonomy is needed in terms of what kind of development is allowed and where. Speaking at the Association of Washington Business’ (AWB) Oct. 20 virtual housing summit, she said policies that are appropriate for Seattle may be inappropriate for other places in the state, such as Okanogan. “I’ve always been an advocate of local control. (It’s) up to local elected officials to determine what is best for their communities.”

Also favoring local control is UW Washington Center for Real Estate Research Director James Young. At the Oct. 20 conference he said that a way to improve housing prices and supply is to remove “constraints on communities to annex or expand” infrastructure such as sewage. Under GMA, governments are prohibited from extending urban utilities such as water and sewage to homes outside the UGA, requiring homes to install wells and septic systems.

However, Young said that this leaves the cost burden to developers and raises the price of a home, adding that a better solution is to permit governments to issue bonds or debt to finance infrastructure expansion.

While many people automatically think of Seattle metro when they hear about unaffordable housing, it’s an issue that is now plaguing rural communities throughout Washington. According to Zillow, Seattle is expected to experience a 9.8 percent increase in home value growth this year, while Spokane is expected to see a 10.9 percent growth in value; Olympia is expected to experience even higher at 12.2 percent growth. In other areas, a lack of rental units or rental affordability is making it impossible for prospective first-time home buyers to save up enough for a down payment.

“Rural communities are getting slammed right now,” Young said.

For agricultural industry advocates like Elsey, some of the problems with GMA are distinct from urban areas. Since more than 90 percent of Washington farms are family-owned, she said housing restrictions “puts the family in a bind” when older relatives retire but don’t want to live outside the farm. “This isn’t a little issue.”

She added that GMA restrictions on zoning, water use, and regulations “contribute to someone’s inability to build new houses” for not just older relatives on farms, but also for domestic workers as well. She blames this in part on Washington’s heavy reliance on foreign labor via the H-2A program.

Young said that the rural housing shortage and high prices is due to a “perfect storm” of older people moving into lower-priced regions and “people moving to the rural areas because it’s more affordable,” a lifestyle change made even more accessible due to increased remote working this year. The demand for retiree housing is likely to increase further as its population is expected to reach two million out of roughly nine million residents by 2040.

“If I’m going to move out of the city, now is as a good a time as any,” Young said. “I can have a good lifestyle, it’ll be cheaper, I can save some money.”

Zillow Economist Alexandra Lee said that this trend has negatively impacted Seattle’s rental market growth, where many renters are attempting to transition to homeownership. Although the economic shutdown earlier this year put a temporary damper on the housing market, she said that now “sellers basically aren’t keeping up with buyer demand. Total available inventory is going to be shrinking over time.”

She added that “even for higher income renters, this new work from home reality means they no longer have to pay high rents to live near their work.”

AWB’s next housing summit is scheduled for Nov. 10.

 

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