By Allison Butcher, Senior Policy Analyst, MBAKS

On Wednesday, January 31, the Master Builders Association of King and Snohomish Counties (MBAKS) kicked off its first general membership meeting of the year—an economic forecast breakfast presented by the association’s Sales & Marketing Council.

The breakfast took place at The Westin Bellevue and featured presentations by Metrostudy Regional Director Todd Britsch and Morgan Stanley Financial Advisor Dan Becraft, C(k)P QPFC.

Becraft touched on highlights of Morgan Stanley’s investment outlook for 2018. In short, the report states that global economic expansion delivered strong returns last year but we should not expect the same in 2018. Morgan Stanley is not anticipating a recession this year, but rather that markets will begin to normalize.

The forecast already factors in recent tax cuts, Becraft said. A look back at the U.S. stock market over the last 37 years shows that tax cuts are not correlated to market performance. In the year after President Ronald Reagan’s tax cuts took effect in the 1980s, for example, the market dropped.

Morgan Stanley Financial Advisor Dan Becraft, C(k)P QPFC (Alabastro Photography)

Becraft offered additional observations, including ways in which demographics influence a country’s economy, predictions on interest rates (he expects they will stay low and may even be cut), and more.

The biggest risk to our economy going forward, he noted, is our national debt, which stands at $20 trillion. However, China’s national debt is significantly higher. Whereas the United States’ debt-to-GDP ratio is around 100 percent, the ratio in China is closer to 460 percent. Becraft said some are speculating this could lead to a move by China within 36 months to repatriate capital that has flowed out of their country in recent years. If this were to happen, it could result in investments being pulled out of real estate in the United States, including the Seattle market, and transferred back to China.

Britsch focused on economic and housing data in the Puget Sound region and provided compelling information in his presentation as well, particularly related to the lack of future housing inventories.

Britsch’s presentation highlighted the fact that population and job growth continue to be very strong in the Puget Sound region, with 137,000 jobs added since 2015 and continued low unemployment in King and Snohomish counties. Furthermore, data from the Department of Licensing show that net driver in-migration into the region has averaged more than 6,300 per month since 2012, for a total of 460,000 new drivers from outside the area.

Metrostudy Regional Director Todd Britsch (Alabastro Photography)

Britsch also stressed that housing supply is not keeping up with demand. Looking at the driver license data, he estimates this growth has created a demand for 100,000 owner-occupied homes between 2012 and 2017. However, during this time, we have built and sold roughly 60,000 homes, creating a housing supply shortfall and causing upward pressure on home prices. The average list price for new construction within formal subdivisions, Britsch stated, has risen 20 percent in Snohomish County and 24 percent in King County year over year.

Britsch warned we are running out of land at a rapid pace. With 10 months’ supply of vacant developed lots in Snohomish County, he said we’re at "crisis level" in terms of lot inventory. The North Creek market area, which has been very robust in recent years, has dried up, Britsch said.

Since 2009, the entire Puget Sound region has had a net loss of 3,018 lots coming out of the system, not to be replaced. More importantly, in that same time frame, the available finished lot inventory has declined by 17,879. Britsch also pointed to Northwest Multiple Listing Service data, which shows King and Snohomish counties have just over a two-week supply of homes for sale.

Although the current housing market is showing signs of weakening, Britsch believes it will remain strong. The housing market is all part of a cycle and we can expect an adjustment in sales, he said. Britsch predicts core areas from King County to South Snohomish County will continue to see double-digit appreciation due to lack of inventory.

Founded in 1909, the Master Builders Association of King and Snohomish Counties (MBAKS) has grown to become the largest residential homebuilders association in the United States. With 2,900 member companies, the association is dedicated to membership value, housing advocacy, community service, and financial stewardship throughout the Puget Sound region.

Howard Chermak, founder of award-winning Chermak Construction, is a much-loved and respected leader in the local remodeling industry. In this exclusive podcast recorded live at our September Remodelers Council Dinner, Howard provides us with his incredible insight and discusses the ways to evaluate the overall health of your business.

Contact:
Stephanie Giralmo, Public Relations & Media Manager
Master Builders Association of King and Snohomish Counties
p 425.457.7067

FOR IMMEDIATE RELEASE

Kirkland Tree Ordinance Falls Short on Addressing Housing Crisis

MBAKS, builders and property owners appeal City’s ordinance, seeking balance between tree protection and need for more housing choices

BELLEVUE, Wash., May 18, 2022—Master Builders Association of King and Snohomish Counties (MBAKS) today joined eight builder/developers and property owners in filing an appeal before the Growth Management Hearings Board regarding Kirkland’s recently adopted tree protection ordinance.

On March 15, the Kirkland City Council approved the ordinance governing tree removal and replacement by a vote of 5-2. Public comments opposing the vote observed the final ordinance had abandoned a multi-year collaborative effort between City stakeholders, Kirkland residents, the Houghton Community Council (HCC), MBAKS, and individual developers. According to the comments, these key stakeholders had proposed a balanced approach for trees and growth goals, which the City jettisoned in favor of an entirely staff-drafted ordinance.

The adopted ordinance defines “landmark trees” that must be preserved by private property owners and creates a nearly total ban on their removal from private property. Under the new definitions, these “landmark trees” and “groves” are common throughout the city and are found on countless private properties. The appeal argues this action failed to meet important planning goals of the Growth Management Act (GMA), including those calling for encouraging development in urban areas, affordable housing, and timely, fair and predictable permit processing. Furthermore, the ordinance was adopted without consideration of private property rights, largely placing the burden on private property owners for achieving the city’s goal of a city-wide 40% tree canopy.

“The work to provide more housing choices takes place in a robust regulatory and planning regime that protects the environment and considers a variety of perspectives” said Interim MBAKS Executive Director Jerry Hall. He noted that “Kirkland is doing many things right under the GMA and is one of the better jurisdictions in which MBAKS members develop land and build homes. However, we are concerned that more onerous tree retention and replanting requirements in Kirkland’s tree code will significantly increase review times and construction costs, hampering new home construction at a time when more housing supply is desperately needed. This will make it increasingly difficult for the city to meet its own housing goals and provide a range of affordable housing options for current and future residents.”

MBAKS also maintains that the ordinance improperly treats single trees and small groves of trees as critical areas on par with wetlands or fish and wildlife habitat conservation areas, even though they do not qualify as critical areas or for protection under GMA rules. Nor does the ordinance rely on “best available science” or consideration of the significant tradeoffs involved with this new set of limitations. At the same time, MBAKS asserts that the city did not consider any “best available science” in requiring large buffer areas around tree protection and critical root zones, as required under the GMA for designated critical areas.

Prior to its adoption, MBAKS actively engaged with the city and others in a multi-year stakeholder process, offering input on how to support our shared goals of a vibrant tree canopy—both in the short term and many years into the future— while providing much needed housing. However, the city put the process on hold in 2019. The city then in 2021 suddenly changed course, entirely disregarding the stakeholders’ input and recommendations from 2019, and took a far different approach on tree protection with very limited opportunity for comments from stakeholders.

The HCC, along with MBAKS, were part of the stakeholder process in 2018/2019. The city did not consider the HCC’s input prior to adopting the new regulations but did provide them the right to veto the new regulations as applied to their jurisdiction. The HCC did just that and voted overwhelmingly on April 25th to veto the new regulations. The HCC and MBAKS share many of the same concerns regarding the new regulations including lack of predictability.

The GMA requires fast-growing counties and cities to plan thoughtfully for new housing, transportation, and business centers, while still protecting environmentally critical areas. Encouraging housing near job centers will reduce long commutes and lower greenhouse gas emissions. Additionally, denser housing efficiently uses our limited land supply, and these homes are more affordable and energy efficient.

MBAKS is strongly committed to environmental stewardship, which can be seen in our advocacy work for pro-density housing measures, like accessory dwelling units, fee simple townhouse codes, and state legislation facilitating middle housing and transit-oriented development. MBAKS believes trees are a vital component of our urban environment, whether thoughtfully retained or newly established in harmony with development.

“We stand as a partner in the work to address the current housing affordability crisis and support crafting a plan for maintaining the vibrant tree canopy that we all love in Kirkland,” said Jennifer Anderson, MBAKS Interim Government Affairs Director. “Unfortunately, we believe that the current adopted tree code works against rigorous planning work required by the GMA, which exists to encourage more homes near jobs and schools so that we may protect our most pristine areas and open places that make our region special.” Anderson further stated that MBAKS hopes this appeal will help clarify the authority of local jurisdictions under the GMA to regulate tree retention, particularly outside of critical areas.

MBAKS supports tree protection. However, it is sometimes necessary for homebuilders to remove trees to meet each property’s highest and best use. Trees are also often removed for safety reasons when they could result in dangerous conditions for residents. In addition, trees are often replaced at a higher rate than removal, with new trees established in locations better suited for healthy long-term growth within the developed environment, and with more diverse tree types than what was removed, ensuring a healthy tree canopy is maintained and enhanced over time.

There are numerous other state and local regulatory requirements builders must follow to ensure environmental protection, including shoreline rules, grading and drainage codes, stormwater regulations, building and energy codes, and more. The GMA challenge contends Kirkland’s ordinance upsets the delicate balance of considerations that ensure the responsible growth of our community.

For more information, please email pr@mbaks.com.

About MBAKS

Founded in 1909 and headquartered in Bellevue, Washington, the Master Builders Association of King and Snohomish Counties (MBAKS) is the nation’s oldest and largest local homebuilders association. Like our founders, our members continue to take a leading role in all facets of homebuilding and support the planning for a growing region. From new technology to advances in sustainability, from collaborative public policy efforts to investing in our communities, our commitment to a thriving, inclusive and well-planned region never wavers. We are the professional homebuilders, architects, remodelers, tradespeople (carpenters, framers, roofers, plumbers, electricians), planners and engineers, suppliers, manufacturers, and sales and marketing professionals in your community who believe everyone deserves access to a healthy and productive place to call home.

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