Can’t find the land you need?
The typical client that I work with tells me, when we first meet, that they want a home with an acre or so of land. Then I have to explain to them why they can’t have a home on an acre. This isn’t completely true but finding a buildable one-acre lot is very hard to do. Good lots are very hard to find in general and finding the ideal one-acre is just about impossible. The reason for this is that the Growth Management Act (GMA) does not allow the development of this size lot.
About the GMA
The GMA was passed in the early 90’s by Washington State with the purpose of reducing sprawl. What it does, among other things, is push the growth into the urban areas and leave the outer areas rural. It requires most of the counties in the State to develop a Comprehensive Plan to address growth in their county. These plans outline Urban Growth Areas (UGAs). In Thurston county we have three UGAs-Olympia, Lacey and Tumwater. Most of the growth in the county is channeled into these areas and restricted outside of it. The UGAs are required to provide utilities and services within the boundaries of the UGA and severely restrict their ability to provide these outside of the UGA boundaries.
The zoning inside of the UGAs is very dense. That means that the government wants as many units per acre as possible. You see the results of this in the new subdivisions in the local cities. It looks like they crammed as many houses in there as they could. This is not done because the builder wants to get a few more lots on the land. The cost of the raw land is a small part of the end price of the home. Most builders would like to have a little bit bigger lots. This is because that is what the buyers want and this is a competitive business, bigger lots-better sales. Most of these subdivisions are actually built with as few lots as the government will allow.
On the other hand, outside of the UGA the zoning is far less density. Most lots outside of the UGA have to be a minimum of five acres in size. There are a few exceptions to this like cluster developments and some odd zonings. But almost all new lots outside of the UGA will be five acres. They also will not have utilities provided by the municipalities. That means they will be on a well and septic system. Most of the lots out there that are less than five acres were developed before the GMA. These lots have gradually been built out over the years. Remember this act was passed in the early 90s. So these lots are getting harder and harder to find.
A lot of clients say “well since the problem is that all the lots a five acres or bigger, the solution is simple, let’s buy five acres and build our dream home”.
The problem with that is five acre lots are expensive and getting more expensive as time goes by. There is a general shortage of buildable lots and the GMA severely restricts the availability of lots in the rural areas and it restricts the availability of any lots bigger than a postage stamp. If a developer has a piece of land that he wants to subdivide into lots and he is required to make five-acre lots instead of one-acre lots. He is only going to get one fifth as many lots. The supply of rural lots has been cut by 80%. His cost per lot has also increased five times. There are a lot less building lots, and they are a lot more expensive.
What is the GMA objective?
If you have every been to Europe, you would have noticed that as you drive out of an urban area it is very densely populated. Most people live in townhomes or apartments that are very close. As you drive out of this area you suddenly come to a line where it is instantly rural and very sparely populated. There are no suburbs, only city and country. Over time this is what the government planners want to have happen here. They want to eliminate the large rambler home on a big suburban lot as well as rural homes on one or two acres. The higher density housing makes it easier for them to provide utilities, roads and services. It also preserves open space it the rural areas. Ideally these open spaces would be forests and farms. That was the plan in Europe as well. But what has happened there is that these small farms have been bought by well to do people and turned into residences. There are a lot of estates and chateau. The same thing is slowly happening here. As the supply of rural lots goes down, the price goes up. Over time only higher income people can afford them. When a typical buyer of a rural lot builds now it tends to be a large home, often with a shop or a barn. They are often hobby farms, almost estates. These days of someone buying a rural lot and building a small simple inexpensive home are rapidly fading.
These use to be another option when choosing a lot to build your home on. You could buy a large lot within the UGA in an area of other nice homes. If you lot around the cities in this area. You see a lot of neighborhoods of homes on large lots. Some of these are next to golf courses of water. They are very nice, livable neighborhoods. Because of the GMA, these neighborhoods can no longer be created. Any of the old large urban lots that existed were quickly built out and there are none left.
If you are currently thinking about buying a lot and building a new home, the results of all of this are quite clear. You are going to have to be patient and persistent in order to find a good lot because of the restricted supply. This is not even taking into account all of the other regulatory and site challenges that further restrict buildable lot availability. These lots are also going to be expensive. The inventory of old lots is gradually being built out and lots are being developed slowly. It is simple supply and demand. There are a lot of buyers and few lots. That means scarcity of supply and high prices.
Finding a lot in today’s world requires a lot of detective work and knowledge. I have just touched on the surface of how zoning issues effect finding a good building lot. If you have any questions about this or if you are considering searching for a lot to build you new home on, give me a call. I would be glad to help.