The Law

The unintended consequences are always larger than the intended consequences.

UW study: Rules add $200,000 to Seattle house price
By Elizabeth Rhodes
Seattle Times business reporter

Backed by studies showing that middle-class Seattle residents can no longer afford the city's middle-class homes, consensus is growing that prices are too darned high. But why are they so high?

An intriguing new analysis by a University of Washington economics professor argues that home prices have, perhaps inadvertently, been driven up $200,000 by good intentions.

Between 1989 and 2006, the median inflation-adjusted price of a Seattle house rose from $221,000 to $447,800. Fully $200,000 of that increase was the result of land-use regulations, says Theo Eicher — twice the financial impact that regulation has had on other major U.S. cities.

"In a nationwide study, it can be shown that Seattle is one of the most regulated cities and a city whose housing prices are profoundly influenced by regulations," he says.

Unintended splits up into unanticipated and unwanted, which kinda depends on unwanted by whom. I suspect the people who got into the market before the "adjustment" only have to deal with property taxes. Which is different than trying to start out too. Although, not having to deal with 1970's interest rates is nice too. Also, they don't mention the fact that houses are larger, and not just the McMansions. All of that aside, it makes me want to live away from the coasts, which speaks to an eventual aging of the cities, a "down cycle", and some sort of regentrification, no?

Also, I wonder if the attention this will cause the studies authors is something they anticipated...