The Seattle housing bubble - an interesting observation
From the
Seattle Times:
UW study: Rules add $200,000 to Seattle house price
Backed by studies showing that middle-class Seattle residents can no longer afford the city's middle-class homes, consensus is growing that prices are too darned high. But why are they so high?
An intriguing new analysis by a University of Washington economics professor argues that home prices have, perhaps inadvertently, been driven up $200,000 by good intentions.
Between 1989 and 2006, the median inflation-adjusted price of a Seattle house rose from $221,000 to $447,800. Fully $200,000 of that increase was the result of land-use regulations, says Theo Eicher — twice the financial impact that regulation has had on other major U.S. cities.
"In a nationwide study, it can be shown that Seattle is one of the most regulated cities and a city whose housing prices are profoundly influenced by regulations," he says.
The article then goes on to cite sources. A major culprit is the State's Growth Management Act. Our own County is dealing with similar issues and the rules and regulations are getting more and more complex and binding yet developers are being given access to large tracts of land. Time to shake things up a bit next election...
Posted by DaveH at February 14, 2008 6:18 PM
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