This year’s Buildable Lands Report, a “mid-term check in” for local 10 year Comprehensive Plans, shows some disturbing trends in housing supply. In King County, decision makers, including the Seattle City Council, have restricted the future of both single-family and multifamily segments of the housing market, limiting single-family construction to an extremely small amount of land and 90 percent of multifamily construction to land that must be redeveloped. What are the effects of these restrictions?

If all things were to remain equal, homebuilders will literally build the last single-family lot in King County sometime in 2030.

The Buildable Lands Report

The Buildable Lands Report (BLR) was adopted by the legislature in 1997 as an amendment to the Growth Management Act, and was. King, Snohomish, Pierce, Kitsap, Clark and Thurston Counties, and their cities, are responsible for conducting a BLR, which are then submitted to the Washington State Commerce Department (Commerce). The BLR compares the remaining zoned capacity of land, to the growth targets established by the Puget Sound Regional Council (PSRC) and agreed to by the county and cities. PSRC sets countywide growth targets for both jobs and housing. The BLR provides information to policy makers regarding how much zoned capacity for jobs and housing is available for future growth.

The 2014 BLR breaks down housing capacity into three groups: Single-Family, Neighborhood Multifamily (properties in neighborhoods that are zoned for multifamily construction), and Multifamily in Mixed Use Zones (Urban Centers). For purposes of this analysis I combined the Neighborhood Multifamily and Multifamily in Mixed Use Zones to delineate between the two primary housing product types, those being single-family and multifamily. I began with four questions:

• “How many housing units do we currently have in all of King County, by housing type?”

• “What have been the construction trends in housing, by type, since the introduction of the Growth Management Act and Buildable Lands Report?”

• “What is the zoned capacity for growth into the future and how does that compare with what has been built since GMA and BLR were introduced?”

• “Do we have the zoned capacity needed to address demand in each housing type and avert an affordability crisis?”

Existing Housing Stock

In order to establish the context in which our local zoning codes have been drafted, it’s important to establish the baseline of existing housing stock. As of December 31, 2011 the existing housing stock throughout all of King County looked like this:

• 468,445 single-family homes –58 percent of total housing stock
• 345,916 multifamily units – 42 percent

Recent Construction

Taking the actual built numbers from January 1^st, 1996 to December 31^st, 2011, minus demolitions, we start to see what the housing market demanded. Of note, this timeline included the housing boom, as well as two recessions. Housing construction from 1996 through the end of 2011 looked like this:

• 57,410 Single-family homes constructed – 39 percent
• 90,989 Multifamily homes constructed – 61 percent

Not surprising, the numbers over this 16 year period reveal that slightly over 60 percent of home building occurred in the multifamily segment, while just less than 40 percent was in the single-family segment. It’s important to keep in mind that a large number of multifamily units were permitted in 2007-08, and only came online in the midst of the most recent recession (2009-10).

Zoned Capacity and Future Growth

In 2008, the Puget Sound Regional Council prepared and adopted Vision 2040, a new, long-term plan for managing growth across King, Snohomish, Pierce and Kitsap Counties. Of importance to the building community, embedded in Vision 2040 is a goal for the counties to focus future growth in three specific ways: Inside the urban growth area, within “Metropolitan and Core cities” that already have built infrastructure, and within urban centers inside those cities. In short, Vision 2040 sets a goal that future housing and job growth should occur in high-density urban centers and should not occur outside of those centers.

Given that goal and the number of urban centers that have been approved in King County cities since Vision 2040 was adopted, the proportional breakdown of the zoned capacity numbers are not surprising. The current zoned capacity for housing in King County is as follows:

• 57,546 single-family homes – 15 percent of total capacity
• 323,574 multifamily homes – 85 percent

Regionally, decision makers should be concerned that 90 percent of the overall multifamily capacity would require redevelopment, including 92 percent in the Multifamily Mixed Use zones. Unlike vacant capacity, redevelopment requires a unique set of circumstances, including a willing seller, a capable buyer and an economic profile that favors removal of the current tenant and demolition of the existing building. Additionally, with current stormwater regulations in flux, and the associated costs of mitigation currently unknown, it is unlikely that significant commercial and mixed-use redevelopment takes place.

Of equal concern to traditional homebuilders is the single-family capacity numbers. Essentially, there is the same capacity for future single-family construction that was built during the 1996-2011 period.

• 57,410 single-family homes built from 1996 to 2011
• 57,546 single-family capacity into the future

Affordability Crisis

If our local economy continues to maintain strong job growth and further diversify the employer base, the vacant multifamily parcels will be developed and the single-family capacity numbers will continue to be depleted. It should not be a surprise that as that happens our region will continue to experience double-digit land price increases and housing affordability will continue to dominate much of the conversation among local jurisdictions. As we are seeing today in Seattle, neighborhood pushback may stymie much of the discussion around increased concentration of housing in established, single-family neighborhoods, further exacerbating the housing shortfall.

Similar to what we saw during the last season of economic growth, families in the median income bracket who desire to own a home and are employed in the Seattle/Bellevue area will be forced to drive until they can find a home affordable to them. As we have already seen in our region, although well meaning, attempts by local jurisdictions to “create” affordable housing by requiring units to be priced “affordable” will have no measureable effect on the affordability crisis.

Additional pressure will be put on the transportation system as more single-occupancy vehicles are forced onto the freeways to drive longer distances, also adding to the region’s greenhouse gas emissions, making it more difficult for King County and Washington State to meet their own emission reduction targets. By purposely limiting the supply of a key segment of the housing market, single-family housing, King County and the 39 cities will have succeeded at preventing sustainable growth in or near the job centers of Bellevue and Seattle.

2014 Housing Summit

How can we address these issues? Is it possible to accommodate future housing needs in King County without moving the Urban Growth Boundary? What are the best opportunities for increasing the concentration of housing in communities and neighborhoods that already have utilities?

The Master Builders Association of King and Snohomish Counties is working to answer these questions and find solutions for the 2015 Legislative session.  To that end, they’ve put together the first annual Housing Summit, which will feature national and regional experts in economics, law and housing data, as well as Washington state legislative leaders, to discuss these questions and start to discover those legislative solutions. You are invited and we urge you to click here to register and for more information. If you would like a copy of the 2014 King County Buildable Lands Report Public Review Draft, please click here.

David Hoffman is the North King County Manager and PAC Director of the Master Builders Association of King and Snohomish Counties. He can be reached at dhoffman@mbaks.com.