Published April 2005

In ongoing growth debate,
stifling housing development
isn’t the solution

An opinion letter in The Herald newspaper recently took on the subject of growth. The author’s letter perfectly illustrated the disjoint between two points of view on growth and what we ought to do about it.

The title of the letter was “Area can’t take more homes and people.” The writer opened with a contrasting view to Everett’s mayor talking up a rosy vision for his city in a January 2005 address. She immediately walked down a common anti-growth argument: that building more houses creates growth.

The logic is, apparently, that if we want to slow or stop growth, all we need to do is stop building. In her own words, “I am always amazed and sickened when there is mention of constructing more homes, condominiums and apartments in our already crowded city.”

Sickened?

She goes on to refer to Soper Hill Road and Highway 9 as once “beautiful forested areas ... now being developed into a huge neighborhood.”

Setting aside the selfishness inherent in such arguments (Who is she to deny a young family the right to buy an affordable home?), she has the cause and effect backward.

Jobs and lifestyle generally drive where people choose to live. There’s some wiggle room with commute distance, proximity to schools if they have children, proximity to retail, etc. But for the most part, it’s seeking opportunity that drives the need for a home.

Homeownership also means the creation of a nest egg. The American Dream. That neighborhood that the letter writer wishes was a forest is actually today full of people pursuing that dream.

As the letter continued, the writer took a swipe at developers, calling them money hungry. Actually, it was nastier than that: “Since these money-hungry developers want to suck up everyone’s money on overpriced homes, they should be willing to put a part of their profits into enlarging our schools so our children and grandchildren can get a better education and help improve the roads that will lead to these homes.”

Of course, government already does mandate that developers contribute to these broader community impacts in the form of what are called mitigation or impact fees. These contribute toward schools, fire protection, utilities, police, roads, etc. Densities on development sites, landscapes and more also are reviewed by planning people paid by taxpayers to look after these broader issues.

The truth is, of course, that developers aren’t the fat cats they are portrayed to be at all. Spend a day with one, and the opinion writer would learn very quickly the degree of risk involved in developing anything. Once she realized the magnitude of the downside risk, she’d either become money hungry herself or choke on the downside.

Paradoxically, this don’t-build-it-so-they-don’t-come notion of controlling growth sometimes brings just the opposite of the desired result. In fact, you don’t have to have anything broader than a basic understanding of supply and demand to know that limiting growth just drives up prices on existing product so long as demand is rising.

Thwarting developers’ efforts to provide an affordable product to a willing buyer is backward. Strong communities need to be working so that developers can provide supply to keep up with demand and keep prices and features within reach of average families.

There is a contrasting view to growth, though, that a Montana native who is active in real estate in these parts said very plainly to me once: “Where I’m from, they haven’t built anything new for decades ... and everybody seems to be getting along OK.”

Of course, he couldn’t find work in Montana, and only one of his brothers stayed on the family farm. The rest all moved to urban areas to pursue their American Dream. That contrasting view, however, is compelling and no doubt in the back of many minds when they see what they consider sprawl.

Growth or no growth, affordability of housing is gradually becoming a problem in Snohomish County. Low mortgage rates are a luxury that has allowed us to avoid facing the realities of rising housing costs. What the Growth Management Act was intended to do is exactly what’s happening now, forcing development inside urban growth boundaries into ever more dense settings.

But now that much of the grandfathered land supply is developed, we are feeling the tension between what the market of home buyers wants and the limited choices the market is now able to offer. If the architects of the Growth Management Act are right, developers will in-fill designated urban areas with more of just exactly what made the opinion writer sick. But they’ll only build what they can sell. The big question is whether people will buy the more densely clustered American Dream.

Tom Hoban is CEO of Everett-based Coast Real Estate Services, a property management and real estate advisory company specializing in multi-family and commercial investment properties. He can be contacted by phone at 425-339-3638 or send e-mail to tomhoban@coastmgt.com.

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