Why housing costs are so high

August 14th, 2019 by Ken

Having spent a good part of my life covering government and government policies, I can say with a great deal of confidence, that government has played a significant role in the high cost of housing.

It looks like it has done so on three different tracks; zoning rules, government requirements, and the elimination of non-standard housing.  I’ll try cover all three tracks with my limited knowledge.

When state and local government began planning for growth in the early 70’s, they weren’t concerned about the downstream impacts of their decisions.   Zoning made some pieces of property more valuable and other pieces less valuable.  They were unable to see that restricting development in the rural areas would make the property less valuable, and make property in urban areas more expensive.  These decisions were part of the reason the cost of housing has increased substantially.

Over the decades, since, the term “make growth pay for growth” has resulted in tens of thousands of dollars of added cost to a single family home.  It isn’t the developer or the builder who pays these increased costs – – it’s the home buyer.

In addition, regulations and rules, designed to make houses, safer, energy efficient, attractive and good neighbors has also resulted in increased costs for those buying homes.  Recently the City of Olympia’s requirement that all new single-family homes must have fire sprinklers, has added about $10,000 additional dollars to the cost of a new home.

In the 1970’s, along with the idea and the concept of zoning, government began the process of eliminating all sub-standard housing within its jurisdictions.  Hundreds, if not thousands of homes, not meeting rules regarding safety, were eliminated.  Trailer parks, with their low income housing, were zoned out of existence, or forced out by government redevelopment.

While government is the largest contributor to the cost of housing in our area, other factors also played a part.  Continued in-migration from California and other parts of urban Washington has played a part.  Housing costs seem cheap to them compared to where they came from and they are willing to bid a little more for their housing, thus driving up the cost of available stock.

Federal and state rules regarding labor has caused an increase in building costs and makes new construction even more expensive than it needs to be.

All of these factors are reasons that housing costs in our community has increased substantially and will continue to rise as land gets scarce and demand increases. 

And as long as government sees the need to protect us from living in sub-standard housing we’ll see blue tarps and undrivable RV’s.

Posted in The Real News

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