Seattle's regulatory brambles hike the price of housing

"We must dramatically increase access to decent, affordable housing," said Mayor Greg Nickels in his State of the City speech March 6. "Most of it will be produced, not by government but by the market through private investment."

The mayor is correct. Most lower-cost housing is old private housing. The best way to open up old private housing is to build new private housing. The city should encourage that — but the people who create new private housing do not believe this city does. They say Seattle is unfriendly. If you want a place that welcomes builders, go to Spokane. Go to Tacoma. Go to Renton.

They like what Nickels said. They like the improvements in customer service at the city's Department of Planning and Development. But the law DPD administers is Gothic, and has spawned a culture of complexity. The builders will tell you stories about it.

Seattle builder Tim O'Shea bought a piece of land with a drainage. Most times, he says, this drainage handled a squirt gun's worth of water, which goes into a culvert. But a city employee saw it when it had been raining and declared the drainage a Class A Riparian Zone. That meant O'Shea could not build a house within 50 feet of it.

O'Shea hired a wetland ecologist who verified that it supported no fish. Four months later, the city employee relabeled the disputed dribble a Class B Riparian Zone, and O'Shea could build within 25 feet of it.

Seattle builder Brad Easton brought in a plan for six townhouses in the Central Area. The city required a review under the State Environmental Policy Act (SEPA). That act allows cities to waive the process for housing of less than 20 units, but Seattle hasn't waived it. The process took 14 months.

Easton got through it, and built his project. O'Shea has done it, and says he always gets through it. Getting through it is not the problem; it is the cost in time — four to eight months, usually — and $5,000 to $6,000 in fees and interest.

Randy Spaan, a consultant who guides builders through Seattle's regulatory brambles, complains of a new pre-permitting process. The idea of pre-permitting is to tell the city generally what you intend to do, and the city will tell you generally if it looks OK, all before either side has much into it. The old way required a sketch of your plan; the new way, Spaan says, pretty much requires the plan itself, which requires maybe three weeks of design work.

The new process, which the city has delayed because of builder complaints, will also require a $375 fee to the city Department of Transportation to judge the need for street improvements. "In most cases, they write back, 'no street improvements required' — and in most cases, everybody knew that from the beginning," Spaan says.

In each of these stories, the punch line is the money. They remember the money. It is obvious, they say, that the money adds to the price of housing. One tells me of hearing a city inspector dismiss a grumble by saying, "Oh, that's nothing compared to what you'll sell this for."

If you do the math, the inspector had a point. What is a $375 fee on a $750,000 house? One two-thousandth, and it is not obvious that it will be added to the price of the house. Maybe it will be subtracted from the bid for the lot. Who knows? It is aggravating not because it is unaffordable but because it is blunt, overt and, to these folks, useless.

In each of these stories, money matters, but in each of them time matters more. It's harder to put a number on it, but it's real. The builders are the supply side of the economic equation. The denser the regulatory air, the slower they work and the fewer units that get built. Over time, that affects the supply of housing and its price city people have to pay to move to Seattle.

Bruce Ramsey's column appears regularly on editorial pages of The Times. His e-mail address is bramsey@seattletimes.com