If builders in King and Snohomish counties want to continue putting up single-family homes at the current pace and at current prices, the region has less than an eight-year supply of buildable lots within the urban boundaries mandated by the Growth Management Act, a prominent local consultant said Tuesday.
“There are not enough buildable lands in the region to sustain the demand we have for single-family homes,” said consultant Todd Britsch, speaking at an event at Bellevue’s Meydenbauer Convention Center organized by the Master Builders Association of King and Snohomish counties.
With vacant lot prices topping $300,000 on the Eastside and $225,000 in parts of Snohomish County, “we will become the (San Francisco) Bay Area, where only the elite of the elite can afford to buy a home,” said Britsch, Northwest regional director for Metrostudy, a market-research firm.
But local government planners, while calling affordable housing a major problem facing the region, say builders shouldn’t blame the 1990 Growth Management Act, which keeps land outside the urban boundary off-limits to development. The state law is intended to reduce urban sprawl, protect the environment and encourage denser development — and it’s doing precisely that, planners say.
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Chandler Felt, King County’s demographer, said the county has abundant capacity for new housing — so long as builders aren’t limiting themselves to huge vacant lots for master-planned communities like Snoqualmie Ridge.
“When builders focus in on single-family development, they’re looking at a very small fraction of King County’s actual market,” Felt said. About three-quarters of the new units built in the county from 2006 to 2011 was multifamily housing, mainly in the 12 most populous cities.
The county’s latest look at buildable lands shows the area’s housing capacity is more than double its target of 177,589 new units by 2031. About 40 percent of those units will be built in Seattle or Bellevue — and many of them won’t be single-family homes.
Consumers are showing a preference for urban living, Felt said, and that’s why urban apartment rents have grown at a faster rate than home prices in far-flung suburbs. Even in Auburn, Bothell and Burien, cities are working to create downtowns with mixed-use housing near job centers.
According to Seattle city officials, for the first time, single-family homes now make up less than half of the city’s housing stock.
More and more builders are tearing down single-family homes in urban areas and turning them into apartments or town homes — and running into resistance from single-family homeowners in some instances.
When Eric Campbell, president of CamWest, a division of publicly traded Toll Brothers, met with angry Queen Anne residents in March to present plans for town homes on a 2.5-acre site, he said land prices have risen so high that builders can’t justify anything less than dense housing.
Town homes sell just fine in other markets where his company has built them, Campbell said.
“We’re going to see more and more people choose alternative housing and living closer in,” he said.
Some builders who attended Tuesday’s event say their biggest problem with the current system is the drawn-out, unpredictable permitting process, which adds thousands of dollars to the price of new homes for sale.
“It shouldn’t take three to five years to get a project approved when property is already within the urban-growth boundary area,” said Brian Ross, CEO of Kirkland-based YarrowBay Development.
His company developed the 379-lot Bridges community on Lea Hill near Kent and another master-planned community in Black Diamond.
Opponents of the projects appealed unsuccessfully to both the state Supreme Court and a growth-management hearing board, adding years and cost to the lot prices, he said.
Streamlining the land-entitlement process should be the top priority for cities and lawmakers, Ross said.
“If you could get through the process faster and cut that down to one and a half years, you would have more supply available for the consumer,” he said.
Homebuyers who want single-family homes with yards may be forced to drive farther and farther to reach their center-city jobs, builders say.
San Diego-based Newland Communities has approval for a 6,400-home development called Tehaleh in Pierce County, one of the largest master-planned communities in Washington. The company acquired the 4,200 acres in 2011 from Seattle-based HomeStreet Bank, which had foreclosed on the previous owner.
Scott Jones, Newland’s general manager, said the developer has sold almost 300 homes — priced from the mid-$200s to the low $400s — and expects it’ll be 2035 before the lots are exhausted.
Builders aren’t excited about redeveloping land with pre-existing structures, Jones said, because it’s “extremely difficult” to get permits and financing for those projects.
“Experience tells you those aren’t likely to happen,” he said.