After five years, Washington State's growth management structure is still standing. Support has been added in weak areas, including shoring up the sections of the law supporting affordable housing. Inconsistencies and duplication in the Growth Management Act (GMA) have recently been modified by amendments designed to be more user friendly. The purpose of this report is to analyze current growth management policies affecting affordable housing, and to recommend strategies to establish baseline reporting methods. This report links the common areas of growth management and affordable housing, and identifies areas of interest to the major stakeholders.
Background
As of June 1, 1995, 132 of the 188 jurisdictions planning under the GMA had submitted comprehensive plans to the Department of Community, Trade and Economic Development (DCTED) for review. Each comprehensive plan must contain the following elements:
While all elements of comprehensive plans will impact affordable housing to some degree, the housing elements are critical to sustaining the availability of affordable housing. In May of 1993 affordable housing legislation was passed in Washington that references the GMA. These laws specifically link comprehensive planning and other growth management policies to affordable housing. This report examines existing policies, perceptions of the major stakeholders, and the practical applications of growth management and affordable housing in Washington and other states.
A primary planning goal of the GMA is to: "Encourage the availability of affordable housing to all economic segments of the population of this state, promote a variety of residential densities and housing types, and encourage preservation of existing housing stock." County-wide planning policies must " . . . consider the need for affordable housing, such as housing for all economic segments of the population and parameters for its distribution" (RCW 36.70A).
Important modifications to the Growth Management Act that will impact housing development and affordability were made in the 1995 legislative session. These include streamlining the environmental review process, clarifying the allowable size and location of urban growth boundaries using local market factors, and encouraging multifamily development in certain urban areas of the state. Provisions were also strengthened protecting existing single family residential neighborhoods.
Survey
The Washington Center for Real Estate Research conducted a statewide survey to better understand the perceptions of key stakeholder groups (public officials, housing providers, and affordable housing advocates) concerning growth management and affordable housing. A key finding of this survey is the perception that growth management regulations will make housing less affordable and less available for low and moderate income households. These responses varied in degree among the interest groups. For example, 84% of housing providers believe that housing will become less affordable for low-income renters, while 62% of the housing advocates and only 43% of the public officials had the same opinion. In all, 65% of the respondents said that low-income, owner occupied housing will become less affordable. Similar results were recorded for the availability of housing for low and moderate income households.
While state growth management goals direct local governments to "encourage" affordable housing efforts, only 14% of all respondents believe that the governments in the communities where they work were currently doing so to a high degree. Thirty-nine percent of the respondents believe that their local government is slightly encouraging affordable housing, while only 8% said that their government highly discouraged affordable housing.
Impact fees permitted by growth management policies may have substantial monetary impacts on affordable housing. Even so, 44% of the respondents favor impact fees as the preferred method to pay for infrastructure improvements related to housing development, followed by property taxes (42%). Support for business and occupation tax was lowest, with an average response rate of 13%.
Affordable housing must be viewed in the context of a safe, healthy and clean environment -- in other words, "quality of life" factors are as important as affordability. Answers to questions about quality of life show that most respondents believe that the quality of life in their working areas is generally good now, and will get better in the next five years as a result of growth management policies. For example, of all the respondents, 42% believe that wildlife and forests in their areas will be somewhat improved due to growth management regulations, 7% feel that these environmental aspects will be somewhat diminished, and 35% think that growth management regulations will have no effect. Other quality of life questions yielded somewhat less conclusive findings. It is suggested that quality of life factors be monitored as indicators of community desirability and sustainable affordable housing.
The survey also endeavored to learn whether housing development is being forced outside of urban growth areas. In general, the answers to these questions were inconclusive.
Comprehensive Plans
Seventy-two comprehensive plans were analyzed for information relevant to growth management and affordable housing. Housing elements from six different city and county pairs were examined: Vancouver and Clark County, Puyallup and Pierce County, and Bellingham and Whatcom County. These were chosen based on the quality of data or notable innovations in each, and show some of the possible linkages between city and county planning related to affordable housing. Also, details are presented from these housing elements in order to gain insights into future data collection and monitoring methods.
Financial Impacts
Three primary financial impacts of growth management policies on affordable housing were analyzed: regulatory overhead, market impacts, and exclusionary barriers. A fourth financial aspect common to growth management policies -- impact fees -- is examined in some detail.
Numerous studies contradict one another concerning financial impacts on affordable housing, but one widely accepted theory is that the initial cost of a new house is approximately 10% higher in a growth management market compared to a similar house in a market not under the influence of managed growth. While no statewide studies were found specific to financial impacts of growth management on affordable housing, one regional study and several case studies indicate that regulatory overhead increases as an effect of growth management planning. At least one regional study demonstrates that housing development in managed growth communities moves outside of urban growth boundaries, presumably to maintain affordability. A case study of Thurston County is used to demonstrate some financial effects of impact fees on affordable housing.
Growth management and affordable housing in other states
Growth management systems in other states are reviewed with an emphasis on states with affordable housing programs. In addition to Washington, Florida, New Jersey, Rhode Island, Vermont, Georgia and Oregon, were found to have specific provisions concerning affordable housing linked to growth management policies. Oregon is often cited as a growth management success story, and is reported to have maintained an acceptable level of affordable housing inside a strict urban growth boundary by increasing housing densities and preserving older housing stock.
Monitoring
Monitoring the impacts of growth management policies and regulations on affordable housing is complicated by a variety of economic, market and demographic factors. Several growth management monitoring systems were reviewed. This report proposes a system to develop standardized reporting by all jurisdictions. This proposed system focuses on the following areas, which are followed by some examples of specific indicators for each:
Homeowner affordability and availability:
Land affordability and availability:
Rental affordability and availability:
In order to establish pre-growth management regulation baselines, data should be collected from before the time regulations are approved. Future reporting should be standardized at the county level.
Future research
Although this study was funded by the Washington State Real Estate Commission, the future focus of work in this area will be of interest to other agencies and organizations as well. Based on interpretations of policy, the survey results, examples from comprehensive plans, and the experience of other states and communities, the following recommendations are made. These recommendations are meant to establish standardized measurable indicators of the impact of growth management policies and regulations on affordable housing.
Standard Reporting Criteria
Establish a standard reporting criteria for all state jurisdictions to record local indicators of affordable housing. Commission an independent agency to collect and analyze the data for a minimum of five years. Make the findings of the data analysis available in an annual report to state and local governments and the general public.
Development regulations study
Conduct a statewide study to determine the extent of regulations in force prior to the approval of comprehensive plans. Repeat this effort after a majority of jurisdictions planning under the GMA have implemented new regulations to determine the degree of change.
Annual Consumer Survey
Conduct an annual statewide consumer survey focusing on the costs of housing and quality of life perceptions in lower income households.
Market Factoring and Mapping
Develop a standard market factor system to be used by local governments in determining population projections, housing supply and land supply levels. Incorporate GIS mapping technology into market assessments.
Sustainability and affordability
Sustainability is essential to establishing and maintaining housing affordability within the social, political, community, and natural environments of growth management policies in Washington State.
This report examines in some detail the "cost" impacts of affordable housing that may or may not be attributable to growth management programs in Washington State. What is needed now is an in-depth analysis of the "benefits" side of the equation. Affordable housing will not remain affordable (or safe or desirable, for that matter) if it is not planned for, designed, developed and maintained in a sustainable manner. A central benefit of the Growth Management Act may be in its ability to create an atmosphere of sustainability for affordable housing.
Jack Purdie August 1995