Arthur Akorin, an assistant professor at the University of Washington School of Real Estate, is optimistic about the theoretical impact of ample supply on home prices. In practice, however, he expects the increase in supply to help Seattle price gains more or less level off.
House price smoothing won’t do much to help people abandoning their home ownership in the short term, but it could smooth the imbalance between house prices and wages, Akorin argued. , now he’s 7%-10% (or more) but not.
“Prices rise with income, which is to be expected in a functioning market,” he said. “There are many fears that a new building in your immediate vicinity will ruin the value of your home. There is little empirical evidence that this is the case. We have some evidence.”
Moderate pricing, in turn, could enable more people with incomes at or slightly below the average regional income to own housing, whether in the city or in the suburbs.
“For people with median incomes above 80% in the area, the market should be able to offer affordable housing options in larger areas,” said Akorin. “Then there is no solution that does not require insurance for households with incomes below that. considerable amount of public resources”
While economists are skeptical that housing construction alone can ameliorate the effects of Seattle’s decade-long economic boom, they generally agree that not building more housing will make things worse.
“Seattle is at the top of the list of desirable cities for wealthy people, so we think it will continue to attract a lot of migration from wealthy people and high-income earners,” said Darryl Fairweather, chief economist at Redfin. I think it will continue to rise, but this makes it even more urgent to build as much housing as possible, and not as acutely as it would otherwise be. , will eventually be like San Francisco.”
With a fixed supply of land to build on, economists say the only way to increase housing supply is to build more densely. “If you can build 6 or 10 units on the same lot [of land] We can only build one unit at the moment, but we divide the price of the same land by 6/10,” said Akorin. “He in Seattle can split that input cost just by allowing a quadplex, or six-unit building, to be built on a 5,000-square-foot lot.”
Akorin cites his native France as an example. The City of Dijon builds mixed-income, mixed-home-size developments intended to serve a variety of household types. 1 development The one he shared was built in a former industrial areaThere are small townhomes in addition to condominium developments, rental apartments, and quadplexes with a mix of commercial and office space.
Fairweather said cities could also speed up construction by streamlining the permitting process and taking other steps to ease bureaucratic barriers.
But in Seattle, the idea of building more densely packed in residential neighborhoods remains a key issue.
Akorin has a conciliatory view of change. “Anyone who aspires to own a single-family home and can afford it should be able to buy it,” he said. We need options for people who don’t.”