Tacoma is extraordinarily fortunate to have such a large quantity of private and publicly owned affordable housing. According to Zillow, Tacoma’s median housing prices are around 60 percent lower than Seattle’s and cheaper than every significant city in the Puget Sound.
Astoundingly, Tacoma’s housing prices are full 20 percent lower than the often-disparaged struggling mill town of Everett. The housing boom that has hit Seattle, Bellevue, Portland and many other cities has almost completely passed by Tacoma.
While Seattle has 62 cranes building new housing and office projects, the housing market in Tacoma is so relatively weak that a mere three cranes are building new housing here. High-tech companies with high-paying jobs have thus far avoided Tacoma. However, we are benefiting from a limited number of workers who can’t afford Seattle prices and move here.
As the economy improves and a trickle of new people take a chance on Tacoma, it is important that the city implement policies that encourage housing to be as affordable as possible. Fortunately, recent research has made great strides in connecting housing policies and affordability.
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Historically, many well-meaning but misguided government policies caused housing costs to unnecessarily increase, the opposite of the intended result.
There are a number of steps Tacoma could take to mitigate possible housing price increases in the future.
First, it could further reduce 1960s-era suburban off-street parking requirements, especially in mixed-use centers. In August, the Victoria Policy Institute found such requirements needlessly increase the cost of housing up to 25 percent and cause far fewer housing units to be built.
Notably, many affordable market-rate apartments in Tacoma, which have functioned well for over 70 years, have few, if any, parking spaces.
Second, Tacoma could further encourage and incentivize more housing to be built at every income level. Most housing discussions are limited to efforts to increase housing at lower prices.
However, the California Legislative Analyst’s Office in 2016 concluded that “[c]onsiderable evidence suggests that construction of market-rate housing reduces housing costs for low-income households and, consequently, helps to mitigate displacement in many cases.” The report also concluded that less displacement occurs in neighborhoods where a large amount of new market-rate housing is constructed.
If higher-earning individuals do not have sufficient new housing stock to move into, they will compete with lower-income residents for existing housing units, driving up prices. Thus, every housing unit being built in Tacoma at all income levels helps mitigate housing price increases and reduces the displacement of residents.
Third, Tacoma should decline mandating misguided “inclusionary zoning” policies, which require developers to build a portion of housing units in a given development at below-market rates.
A 2008 report by National Center for Smart Growth Research and Education points out that “such programs act like a tax on housing construction. And just like other taxes, the burdens of inclusionary zoning are passed on to housing consumers, housing producers, and landowners.”
The authors concluded that “housing prices in cities that adopted inclusionary zoning increased about 2-3 percent faster than cities that did not adopt such policies.”
Although the recipient of a subsidized housing unit in a particular housing complex may benefit, the unintended consequence of such a policy is that the other 99.99 percent of residents in the city would see an overall housing cost increase.
Similarly, any new regulatory requirement placed on the construction of new housing will increase the price of available housing in the city.
Of course, it is important that the integrity of single-family neighborhoods in Tacoma be are maintained. Growth should be directed to one of Tacoma’s many mixed-use centers and to downtown, where there’s a near-endless supply of vacant and underutilized building lots that could absorb decades of new developments.
Erik Bjornson is a downtown Tacoma attorney who often writes about urban issues in the city.