Private Investment in Residential Housing
Summary
Morgan Shook, Senior Policy Advisor at ECONorthwest, presents "Private Investment in Residential Housing" with a date of December 1, 2020. The presentation states that since 2010 only 68 units were built per 100 households formed, and that since 1981, per RCW 35.21.830, local jurisdictions in Washington have been prohibited from enacting controls on rent. It states that rent control does not make housing more affordable. It estimates 15,000 fewer units built over the next 10 years in Washington, equivalent to 11% of the multifamily stock built in the last decade, and closes with housing policy solutions.
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- Issuer
- Congressional materials
- Document type
- 2020 12 01 A28047 D223961 Private Investment In Residential Housing Ppt Econw
- Date
- 2020-12-01
- Case
- 2020 12 01 A28047 D223961 Private Investment In Residential Housing Ppt Econw
Cite this document
“Private Investment in Residential Housing.”
Original at app.leg.wa.gov, dated 2020-12-01. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2020-12-01-2020-12-01-a28047-d223961-private-investment-in-residential-housing-ppt-econw/
, SHA-256 a28070ae9bbccbd960616966f95aec05f1ac08fdda731bc022e7635ba329aa94.Full text
Private Investment in
Residential Housing
Morgan Shook, Senior Policy Advisor,
ECONorthwest
December 1, 2020
The Problem: Underproduction
Since 2010 only 68 units built per 100 households formed
Housing Units to Households Formed Ratio 2010 to 2017
Excerpted: Up For Growth
Most areas of the state have created more jobs than housing
Historic ratio is 1:1 Excerpted: Up For Growth
Challenges to Housing Creation
Housing production is characterized by headwinds…
Growth management and land scarcity
Permitting, permit processing, etc.
Zoning and design regulation (i.e.
exclusionary zoning, design review,
etc.) Fees and taxes
COVID-19 economic impacts
Public opposition to
growth 5
Rent Control Overview
Rent Control in Washington
Since 1981, per RCW 35.21.830, local jurisdictions
throughout Washington state have been prohibited from
enacting controls on rent.
7
A short summary of our research on rent control…
It is proven to negatively impact the
housing market in jurisdictions where it
has been enacted.
8
A Rare Consensus Among Economists…
9
The Impacts of Housing Price Controls
Rent control does not make
housing more affordable.
Lower returns encourage
Price controls lead to tenant
selection based on income
and make renting to lower-
Less landlords to convert units into
uncontrolled or nonresidential
income households riskier
and more expensive. Housing
Affordability space or discourage investors
to develop new buildings.
scarcity also impacts lower-
income households
disproportionately.
Increased Lower Housing quality deteriorated
inequity Quality because landlords have fewer
incentives/resources to
maintain the building.
Regardless of housing
condition, demand remains
high.
10
Rent control has changed over time.
First Second
Generation Generation
11
How rent control can threaten housing
Research Overview + Findings
A Quick Summary of the Research
Lower housing costs
in the short-term
Available supply of housing
Higher rents in the uncontrolled market-place
Poor targeting of benefits
Less economic and social mobility
14
Rent Control on San Francisco
“While rent control prevents displacement of
incumbent renters in the short run, the lost
rental housing supply likely drove up market
rents in the long run, ultimately undermining
the goals of the law.”
Diamond, McQuade, Qian
15
Rent Control in Cambridge, MA
$300
$2.0 billion
million loss $1.7 billion
on in lost
in spillover property
controlled effects value
units
$2.0 billion in costs to local property owners, but only
$300 million of that cost was transferred to renters in
rent-controlled apartments.
16
Impacts in Washington, not just housing
Housing
Taxes Jobs
17
Impact to Washington’s Housing Stock
• 15,000 fewer units built
over the next 10 years.
(1,500 per year
statewide.)
• Equivalent to 11% of the
multifamily stock
statewide built in the last
decade
• 78% of the units are
located King, Pierce, and
Snohomish
18
Impact to Washington’s Economy
$3.5 billion $301 million $200 million
ECONOMIC CONSTRUCTION PROPERTY
INVESTMENT SALES TAXES TAXES
19
Moving Forward + Solutions
COVID -19 Impacts
§ Monitoring housing
dynamics
§ Targeted assistance to
renters
§ Housing market supports
21
Housing Policy Solutions
Promote more housing development to meet future demand
•Regulation supporting more housing options in more places
•Increase financial subsidies for development
•Examine housing taxation
•TOD investments and leveraging transportation investments
Promote a diverse housing stock by preserving existing units
•Preserve and expand the Multifamily Tax Exemption (MFTE) program
•WA Housing Trust Fund investments
Support rental assistance to stabilize housing
•Housing levy assistance
•Expanding the uses of WA Housing Trust Fund (i.e. supporting providers who keep rents below market)
22
Eugene Portland Seattle Boise
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- SHA-256
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- Original
- app.leg.wa.gov