Are We In Good Hands ?

This article by Elizabeth Rhodes from the Seattle Time of February 15, 2008, makes one think, should the BOCC and City governments be reviewing our codes to see where they are costing our residences money ?

UW study: Rules add $200,000 to Seattle house price

By Elizabeth Rhodes

Seattle Times business reporter

Backed by studies showing that middle-class Seattle residents can no longer afford the city's middle-class homes, consensus is growing that prices are too darned high. But why are they so high?

An intriguing new analysis by a University of Washington economics professor argues that home prices have, perhaps inadvertently, been driven up $200,000 by good intentions.

Between 1989 and 2006, the median inflation-adjusted price of a Seattle house rose from $221,000 to $447,800. Fully $200,000 of that increase was the result of land-use regulations, says Theo Eicher — twice the financial impact that regulation has had on other major U.S. cities.

"In a nationwide study, it can be shown that Seattle is one of the most regulated cities and a city whose housing prices are profoundly influenced by regulations," he says.

A key regulation is the state's Growth Management Act, enacted in 1990 in response to widespread public concern that sprawl could destroy the area's unique character. To preserve it, the act promoted restrictions on where housing can be built. The result is artificial density that has driven up home prices by limiting supply, Eicher says.

Long building-permit approval times and municipal land-use restrictions upheld by courts also have played significant roles in increasing Seattle's housing costs, he adds.

(While his data reflect owner-occupied homes within the city of Seattle only, Eicher thinks the same basic findings may apply to surrounding cities.)

Eicher's $200,000 conclusion doesn't surprise Kriss Sjoblom, staff economist for the Washington Research Council, a nonpartisan organization that examines public-policy issues.

"It's actually pleasing," Sjoblom says, "that we finally have data that allows us to show things we thought were there all the time."

A UW professor for 13 years, Eicher is also the founding director of the UW's Economic Policy Research Center. Its goal is to provide analysis that will inform regional policy debates.

Eicher says the research center long wanted to analyze the impact of regulation on housing prices, and found a way when researchers at the University of Pennsylvania developed the Wharton Residential Land Use Regulatory Index. Based on a survey of more than 2,500 U.S. municipalities, it provided the first nationwide analysis and comparison of the effects of land-use regulation.

Eicher requested Seattle's data from the Wharton Index and analyzed it further. That led him to put a price tag on local land-use regulations.

He received no outside funding for the project and stresses he makes no value judgments about whether regulation is good, bad or needs to change.

Rather, Eicher wants the public to "understand the impact of their choices. There's always a cost associated with the cityscape. Who wants to have no parks in the city? Or, a 10-story high-rise in Blue Ridge? But there's a cost to that."

Compared with 250 major U.S. cities, he says, Seattle:

• Is first in terms of the impact of state political involvement in land issues.

• Is in the top 3 percent for approval delays for new construction.

• Is in the top 10 percent in local political pressure influencing land use.

As an example of how this plays out, Eicher explains that "the statewide growth-management plan gave King County few options but to require that landowners in rural areas that haven't already cleared their land to keep 50 to 65 percent of their property in its 'natural state.' This forced greater density in Seattle."

Then a King County referendum to repeal some of the county's land-use restrictions was judged illegal in 2006 by the state Supreme Court because it violated the state's Growth Management Act.

"The state is intervening to restrict supply. It's not that there's no land at all," Eicher says.

Economists hold that housing costs are driven by supply and demand, and say those factors have certainly influenced the cost of Seattle's housing.

But Eicher argues that "demand does not need to drive up housing prices."

Cities such as Houston and Atlanta, which have few growth restrictions, have shown that. They've been able to add enough housing to meet demand, so their home prices have risen more moderately than heavily regulated San Francisco and Boston, which have a harder time increasing housing.

According to the Wharton study, cities such as Seattle that have high median incomes, high home prices and a large percentage of college-educated workers tend to have the most land-use regulations.

Sjoblom says that makes sense: "People with higher incomes want the kind of amenities that regulation provides," he says. "If you're a homeowner and growth controls are imposed and housing prices shoot up, you're grandfathered because you own the place. In theory people will say it's [rising prices] a bad thing, but in practice it's not hurting them."

Sjoblom says that's why making the changes that would foster affordability are so hard to get past the public, some 68 percent of whom are homeowners. "When you bring up specific things, like allowing multifamily housing in their neighborhood, they have misgivings."

That frustrates renters, who suspect they're being priced out. And they're right, according to a housing-affordability index created by the Washington Center for Real Estate Research at Washington State University.

Last summer, King County's potential first-time buyers earning the median family income ($75,143) had just 37 percent of the financial wherewithal to buy the median-priced single-family house ($477,000) at the prevailing interest rate (6.47 percent).

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.

(No breakout statistics are available for Seattle.)

But various government regulations make it challenging to add more affordable housing, notes Sam Anderson. He's executive officer of the Master Builders Association of King & Snohomish Counties, which has pushed government to rethink some of the regulations.

Anderson estimates that regulatory costs comprise up to 30 percent of the total cost of building a new house (land costs included). The laundry list of fees and requirements can run to 30 or more, depending on where the house is built.

Among them, Anderson says, are transportation, school and park impact fees, stormwater management fees, critical-areas mitigation and monitoring, pavement requirements and rockery permits.

And then there's the dollar cost of the process itself.

Building in Seattle can be very time-consuming compared with nearby cities, because of Seattle's neighborhood-based design-review process, says Linda Stalzer, project development director for the Dwelling Company, an Eastside homebuilder.

Design-review committees, composed of citizens interested in architecture and development, are located throughout Seattle; their job is to review commercial and multifamily housing designs before they're approved.

"Depending on how complicated your project is, it might take you three or four times to get through it," Stalzer says.

Add together all the various review and comment periods, and it can take 12 to 18 months to get to the point of applying for a building permit, she says.

On a 25-unit Capitol Hill town-house project now under way, Stalzer estimated the various fees (including consulting and mitigation costs, but not building permits or land prices) have totaled about $650,000.

"I think there's value in going through the process because we're building things that have an impact on communities," Stalzer says. "The difficult part is the process isn't very efficient."

In the final analysis, Eicher believes Seattle's regulatory climate exists because its residents want it. "My sense is land-use restrictions are imposed to generate socially desirable outcomes," he says. "We all love parks and green spaces. But we must also be informed about the costs. It's very easy to vote for a park if you think the cost is free."

Elizabeth Rhodes: erhodes@seattletimes.com

The Garden City

The garden city movement is an approach to urban planning that was founded in 1898 by Sir Ebenezer Howard in the United Kingdom. Garden cities were to be planned, self-contained communities surrounded by greenbelts, and containing carefully balanced areas of residences, industry, and agriculture.

Inspired by the Utopian novel Looking Backward, Howard published To-morrow: a Peaceful Path to Real Reform in 1898 (reissued in 1902 as Garden Cities of To-morrow), organized the Garden City Association in 1899, and founded two cities in England: Letchworth Garden City in 1903, and Welwyn Garden City in 1920. (Letchworth is commonly referred to as such, and Welwyn called by its complete name or abbreviated slightly as Welwyn Garden.) Both designs are durable successes and healthy communities today, although not a complete realization of Howard's ideals.

Howard's successor as chairman of the Garden City Association was Sir Frederic Osborn, who extended the movement into regional planning. ^[1]

The idea of the garden city was influential in the United States (in Newport News, Virginia's Hilton Village; Pittsburgh's Chatham Village; Sunnyside, Queens; Radburn, New Jersey; Jackson Heights, Queens; the Woodbourne neighborhood of Boston; Garden City, New York; and Baldwin Hills Village in Los Angeles), in Canada (in Kapuskasing, Ontario and Walkerville, Ontario) and in Argentina (in ciudad jardín de Lomas del Palomar). The first German garden city, Hellerau, a suburb of Dresden, was founded in 1909. The concept was drawn upon for German worker housing built during the Weimar years, and again in England after World War II when the New Towns Act triggered the development of many new communities based on Howard's egalitarian vision. The garden city movement also influenced the British urbanist Sir Patrick Geddes in the planning of Tel-Aviv, Israel. Contemporary town planning charters like New Urbanism and Principles of Intelligent Urbanism find their origins in this movement. Today, there are many garden cities in the world. Most of them, however, exist as just Dormitory suburbs, which completely differ from what Howard wanted to create.

Per Wikipedia

Creative Development

The question is, would the developer be able to get it zoned with all the variances needed ? Where does it fit into our comprehensive plan ? But most importantly, would the Department of Community Development, Hearings Examiner, and BOCC all have the VISION and FORTITUDE to see a project like this through without the attitude of; "let's run this developer out of time and money" And let's not forget the Impact Fees !

FOR SALE
House and Land $150,000
Smart Growth* 237,000
Your Price $387,000
* See your local planning
department for details

Follow this link and find out about the real Florida, Smart Growth and the Planning Penalty! This PDF file has information not just on Florida but also specific information to Fort Myers.

BOCC and Vision

I saw this transcript of Wendell Cox Testimony on Smart Growth and Public Transit, Before the United States Senate Committee on Environment and Public Works and thought it should be looked at by the BOCC in terms of the Lee County vision they seem to be searching for in balancing our growth with the NIMBY urge to try..." to close the gate after I am in." You can find out more about Wendell Cox views at Demographia and The Public Purpose.

15 May 2002

Mr. Chairman and Members of the Committee:

Thank you for inviting me to testify today.

My name is Wendell Cox. I am an independent consultant headquartered to Belleville, Illinois, in the St. Louis area. I was appointed to three terms on the Los Angeles Country Transportation Commission by Mayor Tom Bradley and was appointed to the Amtrak Reform Council by Speaker Gingrich. I have just returned from an assignment as a visiting professor at CNAM, a French national university in Paris and am a visiting fellow at the Heritage Foundation. The views expressed today are my own and not that of any organization.

I will share with you perspectives you may not have heard before --- about the problems with smart growth. Analysis of the data has induced other professionals and academics to reach similar judgements as well, judgements that challenge what is considered to be the conventional wisdom in urban planning. Let us recall, however, that urban renewal, which was so destructive and is so reviled today was strongly supported by the planning community just a few decades ago.

First of all, it is important to understand that sprawl is not an American phenomenon. It occurs wherever there is population growth and rising affluence. So, for example, the growing Paris area has sprawled significantly. Even European urban areas that have not grown have sprawled.

I do not favor sprawl. I favor allowing people to live and work where and how they like. And, there is no reason not to allow it. Even today, urbanization accounts for less than three percent of the nation's land area.

The "Smart Growth" movement seeks to stop or control urban sprawl. Proponents claim that it will reduce traffic congestion, reduce air pollution and reduce costs. It is important to understand that smart growth and containing sprawl require higher densities. Smart growth's goals simply are unattainable without much higher densities.

The claims of the smart growth movement simply do not hold up.

National and international data clearly indicates that traffic congestion rises with population density. Research commissioned by the United States Department of Transportation indicates that at current US urban densities, vehicle miles rise more than 80 percent when population density is doubled. Now, admittedly, that means that per capita driving declines marginally, but it means that there are more miles of driving per square mile.

More driving per square mile means that traffic slows down and that people must spend more time in their cars. Not surprisingly, journey to work travel times tend to be longer where population densities are higher --- whether in the United States or internationally.

And, as traffic volumes in a particular area increase, there is also an increase in stop and go driving. Slower speeds and stop and go driving mean greater production of air pollution. So, not surprisingly, air pollution production tends to be higher where densities are higher. And, it is well to consider the great progress that has been made in air pollution abatement in the United States. In the last 30 years, driving has increased substantially, while criteria air pollution production has decreased --- not just per capita --- but overall.

So, smart growth increases traffic congestion, travel times and air pollution.

Some months ago research was published showing that transportation costs are higher in more sprawling areas. This is to be expected. But what may be surprising is that overall household expenditures tend to be lower where densities are lower. The big factor in this equation is housing costs. Housing costs are less where densities are less, and they tend to be less to such a great degree that the transportation cost disadvantage is more than canceled.

But, the worst impact of all is social. Home ownership is lower where densities are higher. Thus, smart growth works to make home ownership more difficult for lower income households. Recent decades shows than minority home ownership, such as African-American and Hispanic, is rising faster than that of non-Hispanic whites. At the same time, minority home ownership levels still remain well below that of non-Hispanic whites.

By raising the price of housing, smart growth promotes social inequity. Smart growth rations land and development. It is a fundamental principle of economics that when valuable goods are rationed, their prices rise. When prices rise, it is the lower end of the income spectrum that is driven away from the market. The lower income spectrum has a disproportionate representation of minorities. As a result, smart growth reduces home ownership opportunities for lower income households, especially African-Americans and Hispanics. There is a raging debate between supporters and opponents of smart growth about the extent to which home ownership is reduced by smart growth. We often hear from smart growth supporters that the way to compensate for smart growths reduction of home ownership is to provide greater amounts of affordable housing. Such proposals are no more than empty platitudes in view of the fact that, by some reports, current public resources are sufficient to provide housing assistance to barely one third of eligible recipients.

Finally, there is the overall issue of wealth creation. Land is crucial in the creation of wealth. Where there are fewer restrictions, there is likely to be greater wealth creation. The relatively free market that has existed in land development is at least part of the reason that the United States remains by far the most affluent nation in the world larger than Fresno. And this is in per capita terms. We need to be very careful about placing unnecessarily restrictions on land because it is likely to mean less wealth creation in the future.

And now to transit. This is not about being pro-transit or anti-transit or pro-highway or anti-highway. But the expectations of what can be accomplished with transit are simply unrealistic. First of all, it is important to recognize that transit demand is very concentrated. One-half of the national ridership is in New York and Chicago and 76 percent is in seven metropolitan areas.

Make no mistake about it. Transit works where the circumstances are favorable. And so, 75 percent of commuters to Manhattan ride transit. Those who don't might be considered crazy. More than 60 percent of commuters use transit to work in the Chicago Loop. Among people who have a choice --- people who have automobiles --- transit commuting is largely limited to downtown. And, downtown areas are a small and declining portion of metropolitan employment, averaging only 10 percent of the market. Outside downtown corridors, there is little that transit can do to reduce traffic congestion. This, by the way is also true to some extent in European urban areas.

The key to getting people out of their cars is to provide automobile competitive service --- service that is competitive in travel time. But there is little auto-competitive service in the United States and little more planned to areas other than downtowns.

The Union of International Public Transport is hardly the type of organization that would be expected to make critical comments about public transit. But this organization, the international equivalent of the American Public Transportation Association (APTA) put it this way:

In the United States, with the exception of New York, public transport is unable to compete with the automobile: its speed is half as fast, which means that door-to-door travel times, incorporating terminal distance times, waiting and transfer times, are 3 to 4 times longer on public transport.

Actually, this is something of an overstatement. Transit plays an important role in providing auto-competitive service to a number of the nation's downtowns, not just Manhattan.

This brings me to three conclusions:

• No problem has been identified of sufficient magnitude to justify coercive smart growth strategies

• There is little potential for reducing traffic congestion or increasing transportation choice for all but a few through transit. There are no material successes, US or international.

• Smart growth strategies tend to intensify the very problems they are purported to solve. New federal mandates are inadvisable.

A year ago, a number of us gathered in the mountains of Montana and issued a statement of market principles of development --- the Lone Mountain Compact. It stated, among other things:

… absent a material threat to other individuals or the community, people should be allowed to live and work where and how they like.

Forty years ago, Democratic presidential candidate Adlai Stevenson expressed similar sentiments:

Our people have had more happiness and prosperity, over a wider area, for a longer time than men have ever had since they began to live in ordered societies 4,000 years ago. Since we have come so far, who shall be rash enough to set limits on our future progress? Who shall say that since we have gone so far, we can go no farther? Who shall say that the American Dream is ended?

We are a great nation. We have accomplished much. We should face the future in confidence, not fear.

Smart Growth 1

We always read about Smart Growth, but do most of us have the foggest idea of what it is and how it affects us? First, let's go to Wikipedia to review what is Smart Growth. Second, the question becomes, how does it tie into Lee County? Here is Lee County Government's web page about Smart Growth. And if this really gets your juices going, here are the Elements of the Lee County's Smart Growth Planning...
Community Character Element
Land Use Element
Managing Transportation and Land Use
Water & Environmental Element

If you are really into research, go to the Smart Growth Resource Library.