‘We are running out of dirt,’ economist says rezoning needed to create more affordable housing

Sep 6, 2022, 2:45 PM
Photo from Flickr - Mark Knoke

For an average Seattleite to be able to purchase a home in 2022, they would need to be making at least $151,833 to afford the median home price in the Seattle area this year, and the solution, according to Windermere Chief Economist Matthew Gardner, is to adjust Seattle’s rezoning laws to create more affordable housing.

Seattle home prices have been ballooning for the better part of a decade with the average home price going from $409,172 in 2010 to $860,000 in 2020, according to a report compiled by Construction Coverage.

“A couple of things, one of which is we need to look at our zoning code, not just here in Seattle,  but really across the state,” Gardner said. “Zoning was created back in the late 1920s, early 30s and it made sense probably through the 70s. But now, we’re running out of land in the urban growth boundaries, through the Growth Management Act, we created back in 1990, which said where you could and where you could not build inside those boundaries.”

Currently, there are stricter limits on where in and outside of the city this land development can happen according to the Growth Management Act, which limits how far cities can expand, as well as protect green spaces from becoming overdeveloped.

The Seattle City Council is considering “upzoning” all residential neighborhoods to comply with a state housing mandate. Upzoning is a process of increasing the amount of housing development allowed on a parcel of land. Seattle’s Office of Planning & Community Development (OPCD) put together a comprehensive residential upzone plan and presented it to create 80,000 new homes and 132,000 new jobs over 20 years.

Seattle mulls a rezone of all residential neighborhoods

A good deal of rezoning is necessary for the creation of more multi-unit affordable housing, a solution that can be broken down into three options to achieve the goal. According to Gardner, these options will show how rezoning will directly help bring housing values back down to levels that can realistically be purchased by the average Seattle resident.

“First, minimum lot sizes can be changed, minimum densities for new single-family homes can change, that means you can put more homes on the same acre of land,” Gardner said. “Second, expediting permits and getting those through quicker can help to create that certainty for builders. Lastly, I think that we should look at regulatory fees in the state of Washington, last time I checked, it is about $90,000 just in fees, which often come at the cost to home buyers.”

The issue is not one that only affects Seattleites though, cautions Gardner, as the Growth Management Act of 1990 also limits land development outside of these urban growth boundaries. Currently, the only county in the whole state where median incomes would be able to comfortably be able to pay the nonpayment and monthly mortgage on the median housing costs to be considered truly affordable is Lincoln County. This is why Gardner calls for a statewide upzoning plan to increase the housing stock in the state.

“At the end of the day, we know we are running out of dirt. We talk about affordability if this was not an issue, and there’s no reason why a lot of our rural and suburban markets outside of Puget Sound shouldn’t be remarkably affordable. We should have enough land for 100 years. That clearly is not the case.”

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‘We are running out of dirt,’ economist says rezoning needed to create more affordable housing