Windermere chief economist calls for more multifamily, affordable housing in Woodinville

In a presentation on Thursday, Oct. 20, Matthew Gardner, Chief Economist at Windermere Real Estate, called for more multifamily housing in Woodinville to meet the demands of the rising population in the city and nearby regions. The presentation was held by the Woodinville Chamber of Commerce at Chateau Ste. Michelle Winery.

Along with his position at Windermere, Gardner sits on the Washington State Governor’s Council of Economic Advisors and is the chair of the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington. He is also one of several economists who provide housing market forecasts for Reuters’ Home Price Forecast Survey and Zillow’s Home Price Expectation Survey.

“Housing [in Woodinville]: not very diverse,” Gardner said. “Almost all single-family housing. There is the problem that we have. We have run out of land, simple as that.”

Gardner’s model predicts that the population in the Woodinville-Bothell area will grow by about 16,500 in the next five years. But a critical barrier to the city’s ability to support this growth is that there is simply no more undeveloped land in Woodinville. And the vast majority of land that is developed is occupied almost exclusively by single-family homes.

“We are, in essence, built out,” Gardner said. “I think what we need to look at is lands owned by cities, owned by counties, owned by the state–let’s look at PUD-owned [planned unit development] land. That’s low-hanging fruit.”

He said that he estimates there are about 45,000 owner-occupied houses in the region, and expects that number to grow by about 9.9% in the next five years. Additionally, there are about 19,000 renter-occupied households in the region, and that number will grow by about 11.6% in the next five years.

Economic disparities between homeowners and renters in the US are immense. According to the Joint Center for Housing Studies at Harvard University, the median wealth for homeowner households in 2019 was $254,900–about 40 times the median wealth for renter households, $6,270.

“I'm not saying get rid of single-family zoning,” Gardner said. “Just, let's look at what started out in Minneapolis, where they allowed duplexes or triplexes as you built inside of the single-family zone there. That is a good start.”

Many homeowners believe that building affordable housing in their neighborhood will decrease the value of their home, but decades of academic research has shown that the opposite is true, Gardner said.

“We have this kind of ‘NIMBY-istic’ ['not in my backyard'] mentality,” he continued, referring to people who are purportedly in favor of liberal housing policies–until that means building affordable housing in their own neighborhoods. “It's like, ‘Okay. Build your cheap housing or affordable housing. Build it away from me. I don't want it.’ It doesn’t make sense, because you’re not going to create more land.”

The first zoning policies in Washington were developed in the 1920s and early '30s. The 1990 Growth Management Act (GMA), which is regularly amended, requires local governments to create comprehensive plans to manage population growth.

“Zoning policies from the ‘20s to the ‘70s were fine,” Gardner said. “Doesn't make sense today.”

Regulatory fees for builders, particularly in affluent neighborhoods, limit their ability to profit off of affordable housing, he said, noting that about 25 cents of every dollar spent on building homes in the US goes toward regulatory fees. Gardner suggested that the city could look for ways to limit or subsidize these fees.

“To provide housing is critically important,” he said. “Certainly, people want to be here. We know that. We’re remarkably talented, a great workforce, a great place to live. But I do wonder about our younger people that are out there. If my model is right, where are they gonna live? I’m just not sure.”