But We Have Good INTENTIONS (supposedly)

by Don Boudreaux on February 14, 2008

in Regulation

Eighty-eight percent of the increase in the median real price of a house in Seattle since 1989 is the result of land-use restrictions.  So finds University of Washington economist Theo Eicher.  Here’s the story.

(HT Brian Summers)

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{ 16 comments }

Sam Grove February 14, 2008 at 12:09 pm

What were their intentions exactly?
To tell other people what to do.

EconStudent February 14, 2008 at 12:22 pm

My parents live on a farm in King County, and have had major problems. They recently passed laws that have made my parents 7 acre parcel of land effectively about 3 acres. And a neighbors 20-acre parcel he was trying to sell got dropped to an effective 1 or 2 acres because of the occasional stream in the area. So these laws are driving high the prices within the cities, but they are also heavily damaging the values of the more rural areas because suddenly they have no land to use!

Stretch February 14, 2008 at 1:10 pm

I can't comment on housing directly, but as someone who regularly travels to Seattle in search of commercial real estate I can say that it is one of the hardest markets to do anything in. It might well be the worst.

Last time I was there all I found was a half-acre parcel for a whopping 1.5 mil. That's just pure insanity. Even Portland, OR, a city well known for its stringent zoning regulations isn't that crazy.

Bob in SeaTac February 14, 2008 at 1:27 pm

The King County Growth Management Act (GMA) that was supposed to make land and housing affordable only caused horrendous increases in land value. It suddenly restricted once affordable land for many houses to one house per 5 acres, or 10 acres, or 20 acres, depending on exactly where the land was.

King County has suffered ever since it was passed, I think, in 1985.

Bob in SeaTac February 14, 2008 at 1:56 pm

Not 1985, the GMA was enacted in 1990.

Kevin S. February 14, 2008 at 3:09 pm

"What were their intentions exactly?
To tell other people what to do."-SG

That's in interesting question, but I don't think your answer is right. True enough, they did tell people what to do with their private property, or more correctly, what they couldn't do. Their intentions, I believe, were to increase tax revenues without actually raising tax rates (although they may have done that too).

shawn February 14, 2008 at 4:36 pm

well, their purported intentions would be to 'preserve open space, as a means of increasing HSW of the general public', or some other similarly worded high-sounding rhetoric. Their actual results are to raise the property value of already owner/voters at the expense of not-yet owner/voters.

So…it's caring about the HSW of the voting public…or more so, of themselves. Public choice theory, unsurprisingly.

vidyohs February 15, 2008 at 9:44 am

This is a particular subject that Reason magazine has reported on several times over the last 10 years.

My question now is, where are all the illegals "who do the work that Americans won't do" finding housing they can afford?

Will Seattle and King County simply implode because there will be no one in the city that will do those menial jobs because to live there one must already be too rich to do menial tasks at a profitable cost; or will they wake up and change. Oh, there you go! When Obama is elected he will bring change! At least he says he will.

Here in Houston, Harris County, you have to watch your step when you're out on your feet because someone will drop a new building on you if you aren't lively. There is available housing at affordable prices for all income ranges; and, our economy is booming.

shawn February 15, 2008 at 10:11 am

I've got to check houston out at some time…your alleged lack of zoning laws is quite intriguing.

John Dewey February 15, 2008 at 10:17 am

vidyohs: "Here in Houston, Harris County, … There is available housing at affordable prices for all income ranges; and, our economy is booming."

Same here in Dallas.

Some have argued that Texas cities do not have the geographical restrictions of a Seattle or a San Jose. From what I remember, Houston is bordered by marshland on the south and east, with a huge bay in between to the southeast.

vidyohs February 15, 2008 at 10:55 am

Shawn,
Please do so, and it is not alleged. That fight has been fought several times and has always (so far) been won by the Houston Property Rights Association (of which I am a member when there is a fight on).

However, sadly to say, there are organizations here, like those that ruined Seattle, that would love nothing better than to emulate Seattle and Portland.

John,
You're right about geography but trust me amigo there is still plenty of room between Houston and Galveston, many many bedroom type communities. Plus to the entire western half of the compass is available for growth and it is happening. Like I said, don't stand still because some one will pour a slab over you.

There is a lot of opportunity and money churning around in Houston.

shawn February 15, 2008 at 11:42 am

as a landscape architect/planner, i work a lot with people who (with the best of intentions) would love nothing better than to emulate seattle and portland in every city everywhere.

Trying to talk to them about property rights and questioning 'green development' is getting me quizzical looks at best, outright frustration at worst.

vidyohs February 15, 2008 at 2:45 pm

Well whatever you do, if you do come to Texas, don't go to Austin. You'd be right back into the nut house.

Sam Grove February 16, 2008 at 12:54 am

That's in interesting question, but I don't think your answer is right.

These are the kind of people that feel compelled to tell other people what to do.
They are participating in a vision of a politically perfected society. They intend to tell people what to do to achieve that. They'll probably tell them when they are happy too.

Floccina February 19, 2008 at 2:48 pm

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."

And as an added benefit you might be able to drive the poor right out of the area. I am being sarcastic.

Ed February 21, 2008 at 8:25 am

This issue of zoning restrictions and housing affordability and the differences between prescriptive markets like Seattle and responsive markets like Houston is actually the theme of a a conference by the American Dream Coalition, which will be held in Houston on May 16-18.

For more info: http://www.americandreamcoalition.org/

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