Government rules add significantly to cost of housing

April 10th, 2019 by Ken

By Dave Nicandri

I support the remediative steps The Olympian outlined in its recent editorial (“Homelessness is a bigger problem than Olympia can solve,” April 7, 2019), especially “addiction treatment on demand” and “criminal justice reforms that focus on rehabilitation.” These and other proposed actions were put forth to address the “inter-generational poverty” that, the editorial argues, have led to the local homelessness crisis. To the extent “inter-generational poverty” contributes to this problem I would argue that there is a major and far more immediate factor. 

I witnessed, as a member of the Tumwater City Council in the 1980’s, the elected leadership of the Olympia City Council (with the full support of The Olympian) take the lead in moving land use planning in all of Thurston County towards a “growth should pay for growth” modality. Sold under the pretenses of environmental sustainability and the desire to curb urban sprawl, we can now see that the vast array of “impact” fees, connection charges, etc. has been all too successful in limiting growth.  The growth of what? Housing. 

Ironically, we once had in place an unstated policy that was a direct “inter-generational” transfer of wealth mechanism, but making “growth pay for growth” eliminated it. The contractor who built the small house my wife and I bought as a young couple in 1975 paid for a building permit for inspections, but he did not pass on to us as purchasers any additional charges for roads, water, sewer, open space, or schools.  All of that infrastructure that we gained access to had already been paid for by previous generations of Tumwater taxpayers who financed it through taxes, utility charges, and bond issues. One must believe they felt satisfaction in the gradual building-up of the larger community for the benefit of their children and other newcomers who could contribute to the life of the city. Each older generation, with its collective means, literally paved the way for those younger ones that succeeded them. It was a form of paying forward.

Currently, new housing in Thurston County is burdened not only by the cost of construction but a measure of municipal infrastructure which adds an average of $40,000 to each new housing unit’s cost. This cost is ratcheted upwards dramatically when it comes to multi-family housing and planned unit developments, and has a particularly deleterious effect on low-income housing which typically operates within the multi-family construction mode.

Having “growth pay for growth” artificially limits the supply of housing and increases demand as reflected in the rising costs for rents or homes. As a result, new construction is not sufficient to keep up with Thurston County’s population growth.  This policy-induced shortage assures that housing costs will continue to rise and many who need housing will struggle to afford it.

None of the foregoing is intended as a brief against “smart growth,” environmental sustainability, or greater urban densities. Neither is it an endorsement of the idea that the current wave of homelessness is principally a function of “inter-generational poverty.” Thurston County went three generations between “Hoovervilles” and “mitigation sites.”  Nevertheless, if the current generation of developers and home-owners is not allowed to transfer its investment in municipal infrastructure to future generations who must otherwise pay for it anew, then the shortage of homes in this area is only going to become more acute.

Posted in The Real News

(comments are closed).