PROUDLY SERVING MEMBERS THROUGHOUT CHELAN, DOUGLAS & OKANOGAN COUNTIES
Two new commissioners, Dan Sutton and Kyle Steinburg took office at the beginning of the year and the progress they have made with respect to improving regulatory processes has been remarkable. One of the biggest obstacles to economic development and affordable housing is the ever-increasing regulatory burden and even more importantly, how the regulations are administered.
In all land improvement and investments there are essentially three types of risk. The market risk, of course – that is, the dangers of market forces changing so that when a project comes on line the market fails to respond. There is what is known as the “development risk” and that is the worry that the project won’t “pencil” due to any number of factors, such as increasing costs, errors in estimating costs, etc. But the biggest and most unpredictable risk is the regulatory risk. Market risk and development risk can somewhat be managed, but the threat of regulatory changes, changes in policy, or just plain unpredictability is beyond the landowners’ control, and often cannot be managed at all.
Of course, more risk, particularly regulatory risk, drives up prices as project proponents become less and less willing to take on a given project without a higher and higher rate of return required to take on that additional risk. Simple and persistent economic realities. The effect of regulatory burden is to add artificial constraints to supply and the unrelenting hand of economic reality means prices increase.
The new commissioners, both small businessmen, have a deep and abiding understanding of how this works, and have taken steps already (they’ve only been on the job for 4 months) that are helping to mitigate some of that regulatory risk.
Here are some of the things they have already done:
These are just a few things. None of these things by themselves make huge differences, but taken together, they can. That’s how this regulatory risk (shall we say regulatory creep) – one little regulation at a time -- has evolved and thus has increased housing prices. It needs to be unwound and these guys are doing that. We expect many more good things to come.
Thank you Dan, Kyle, and Steve for working in the best interests of the citizens of Douglas County.
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