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GMA costs homeowners thousands of dollars, says new report
WASHINGTON HOMEBUYERS PAYING THOUSANDS MORE FOR HOUSES BECAUSE OF GROWTH MANAGEMENT ACT - Law is responsible for 26 percent of the increase in state's housing prices since 1995 Los
Angeles - A new study released by Reason Public Policy Institute finds the
state's Growth Management Act is costing Washington homebuyers thousands
of dollars. The report
shows that between 1995 and 2000, Washington's Growth Management Act added
$5,064 ($844 annually) to the price of a typical home in the state.
Thus, over the life of a standard 30-year mortgage with a 7 percent
interest rate, the growth management law will add more than $12,000 to
the cost of a home in Washington. Smart
Growth and Housing Affordability: Evidence from Statewide Planning Laws
demonstrates that Washington's Growth Management Act was accountable for
26 percent of the increase in the state's housing prices between 1995
and 2000. The study found strikingly similar results in Florida. Between
1994 and 2000, growth management laws added $5,425 ($775 annually) to
the price of a home in Florida and were responsible for 20 percent of
the increase in housing prices. "The
implementation of the Growth Management Act has resulted in higher
housing prices and decreased housing affordability in Washington, thus
making the goal of home ownership less attainable for renters and
lower-income households," said Samuel Staley, co-author of the
report. "The intentions were good, but there are serious,
unintended consequences to these policies. Real estate markets are
tricky and when policymakers try to forecast growth patterns they often
end up limiting the supply of housing and unintentionally causing prices
to soar." The
study illustrates that Washington's housing prices increased throughout
the1990s, but rose dramatically between 1995 and 2000 - the years in
which the growth management law took effect.
Counties that were not planning under the Growth Management Act
experienced significantly lower rates of increase.
Currently, 29 of the state's 39 counties are engaged in planning
and development under the growth management law. "This
data shows there is a fundamental contradiction in the state's growth
management laws" Staley said.
"The regulations explicitly include goals to promote housing
diversity and affordability, but often require planning mandates that
are likely to increase housing costs." Smart
Growth and Housing Affordability: Evidence from Statewide Planning Laws
can be found online at www.rppi.org/ps287.html. Samuel
Staley, Ph.D., directs the Urban Futures Program at Reason Public Policy
Institute. He is a former economics professor and recently wrote the
book, Smarter Growth:
Market-based Strategies for Land-use Planning in the 21st
Century. Reason Public Policy Institute is a nonpartisan public policy think tank promoting choice, competition and a dynamic market economy.
Contact: Samuel Staley, Director of Urban Futures Program, 310-292-2383 Chris Mitchell, Media Relations, 310-391-2245 In accordance with Title 17 U.S.C. Section 107, any copyrighted work in this message is distributed under fair use without profit or payment for non-profit research and educational purposes only. [Ref. http://www.law.cornell.edu/uscode/17/107.shtml] |