SEATTLE (Inman News Features) - Washington tate?s Growth Management Act is generating some unintended consequences and contributing to rising home prices, according to a study released last month by Reason Public Policy Institute, a non-partisan public policy research group. "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," wrote Samuel Staley, project director and co-author of the report.
The study, "Smart Growth and Housing Affordability: Evidence from Statewide Planning Laws," examined correlations between housing-price trends and planning in Washington, Oregon and Florida, states where growth-management laws are tied to explicit state-determined goals.
The study found Washington state?s Growth Management Act added $5064 or $844 each year to home prices from 1995 to 2000. Housing prices increased by 16.9 percent, or 3.4 percent per year, from 1990 to 1995, according to the study. Analysts assumed an annual housing costs inflation rate of 0.7 percent, then estimated housing prices would have increased 2.7 percent per year without the effects of the Growth Management Act. Household income increased 3.8 percent per year during the five-year period.