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, claims 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 is quoted as saying in the story.

The story goes on to say that the key regulation is the state’s Growth Management Act (GMA), which created an artificial housing shortage by using regulation to limit supply. It adds that long building-permit approval times and municipal land-use restrictions upheld by courts also have played significant roles in increasing Seattle’s housing costs, he adds.

Eicher’s $200,000 conclusion didn’t surprise Kriss Sjoblom, staff economist for the Washington Research Council, a nonpartisan organization that examines public-policy issues.

“It’s actually pleasing,” Sjoblom was quoted as saying, “that we finally have data that allows us to show things we thought were there all the time.”

A UW professor for 13 years, Eicher is also the founding director of the UW’s Economic Policy Research Center. Its goal is to provide analysis that will inform regional policy debates.

Eicher says the research center has long wanted to analyze the impact of regulation on housing prices, and found a way when researchers at the University of Pennsylvania developed the Wharton Residential Land Use Regulatory Index. Based on a survey of more than 2,500 U.S. municipalities, it provided the first nationwide analysis and comparison of the effects of land-use regulation.

Eicher requested Seattle’s data from the Wharton Index and analyzed i, which led him to be able to hang a price tag on local land-use regulations.

He also points out he received no outside funding for the project and stresses he makes no value judgments about whether regulation is good, bad or needs to change.

Rather, Eicher wants the public to “understand the impact of their choices. There’s always a cost associated with the cityscape. Who wants to have no parks in the city? Or, a 10-story high-rise in Blue Ridge? But there’s a cost to that.”

Other findings in the study include:

Compared with 250 major cities, Seattle:

• Is first in terms of the impact of state political involvement in land issues.
• Is in the top three percent for approval delays for new construction.
• Is in the top 10 percent in local political pressure influencing land use.

As an example of how this plays out, Eicher explains that “the statewide growth-management plan gave King County few options but to require that landowners in rural areas that haven’t already cleared their land to keep 50 to 65 percent of their property in its ‘natural state.’ This forced greater density in Seattle.”

Then a King County referendum to repeal some of the county’s land-use restrictions was judged illegal in 2006 by the state Supreme Court because it violated the GMA. “The state is intervening to restrict supply. It’s not that there’s no land at all,” Eicher says.

Economists hold that housing costs are driven by supply and demand, and say those factors have certainly influenced the cost of Seattle’s housing.

But Eicher argues that “demand does not need to drive up housing prices.”

Cities such as Houston and Atlanta, which have few growth restrictions, have shown that. They’ve been able to add enough housing to meet demand, so their home prices have risen more moderately than heavily regulated San Francisco and Boston, which have a harder time increasing housing.

Another interesting finding was that according to the Wharton study, cities that have high median incomes, high home prices and a large percentage of college-educated workers tend to have the most land-use regulations.

Sjoblom says that makes sense: “People with higher incomes want the kind of amenities that regulation provides,” he says. “If you’re a homeowner and growth controls are imposed and housing prices shoot up, you’re grandfathered because you own the place. In theory people will say it’s [rising prices] a bad thing, but in practice it’s not hurting them.”

Sjoblom also notes that’s why making changes that would foster affordability are hard to get past the public — some 68 percent of whom are homeowners. “When you bring up specific things, like allowing multifamily housing in their neighborhood, they have misgivings.”

That frustrates renters, who suspect they’re being priced out. And they’re right, according to a housing-affordability index created by the Washington Center for Real Estate Research at Washington State University.

Last summer, King County’s potential first-time buyers earning the median family income ($75,143) had just 37 percent of the financial wherewithal to buy the median-priced single-family house ($477,000) at the prevailing interest rate (6.47 percent). Yet Five years earlier, when King County’s median-priced house cost $282,500, median-income, first-time buyers possessed 72 percent of the income needed.

Sam Anderson, executive officer of the Master Builders Association of King & Snohomish Counties, which has pushed government to rethink some of the regulations, estimates that regulatory costs comprise up to 30 percent of the total cost of building a new house (land costs included). The laundry list of fees and requirements can run to 30 or more, depending on where the house is built.

And then there’s the actual cost of the government process itself. Construction process can be very time-consuming — and expensive. In addition to a laundry list of permits, and fees for them, there are things like dealing with design-review committees. These are usually composed of citizens interested in architecture and development, who review commercial and multifamily housing designs before they’re approved.

Add together all the various review and comment periods, and it can take 12 to 18 months to get to the point of applying for a building permit, she says.

In the final analysis, Eicher believes Seattle’s regulatory climate exists because its residents want it. “My sense is land-use restrictions are imposed to generate socially desirable outcomes,” he says. “We all love parks and green spaces. But we must also be informed about the costs. It’s very easy to vote for a park if you think the cost is free.