2016: Did Growth Outpace our Willingness to Build Homes?
Growth accelerated in 2016, with more suburban markets leading the way
Census data released last week showed yet another acceleration of regional population growth. King County maintained a high growth rate, added another 35,700 residents in the year ended July 1, 2016. But neighboring counties saw higher growth rates.
Pierce added 18,600 residents, more than twice the average of the preceding five years. Snohomish added 17,500 residents, vs an average 10,900 per year between 2010 and 2015. Constraints on development in King County may be diverting new residential growth into the suburban cities of Snohomish, Pierce, and beyond.
Outlying counties also grew. Thurston County added 6,000 residents and Kitsap 4,300. Both were significantly higher than most recent years.
Measured as growth rates, King County grew 1.7% in 2016 (same as 2015); Snohomish grew 2.3% (vs. 1.6%); Pierce 2.2% (vs. 1.5%); Thurston 2.2% (vs. 1.3%.) Kitsap expanded 1.6%, well above recent norms though lower than a spike in growth in 2015.
Where did the growth come from? The Census breaks down the sources of population change. Natural increase (births - deaths) is predictably stable and contributed 28% of last years growth. Net international migration declined slightly and accounts for 25% of growth in 2016.
Domestic migration rates shifted dramatically toward suburban counties in 2016
47% of growth is domestic migration which grew spectacularly in 2016, everywhere except King County. The Census defines domestic migration as moves between US counties, and has not reported whether the increases in Snohomish and Pierce represent moves from King County or from elsewhere. Even if from elsewhere, many of these new residents may have preferred to live in King County. Both Snohomish and Pierce added more residents via domestic migration than King in 2016, and both more than doubled the pace of domestic net migration over the previous year. Thurston almost tripled.
There's a clue in driver license data. New driver licenses issued to out-of-state drivers are a measure of gross migration from other states, whereas the Census measures net flows from other counties. The driver license data indicates a continued increase in gross migration to King from other states, but stable migrations from other states to neighboring counties. Follow the math, and it suggests migration from King to adjoining suburban counties. The shift toward suburban growth is local displacement of former King County residents.
It's hazardous to read too much into one year of data. We also lack the city-level data for a finer analysis at this time. We'll report on that next month. But the trend of the last few years - that King County would grow at a faster pace than its neighbors - decisively reversed in 2016.
We've reported before about the centralization of growth around Seattle and some of the central Eastside cities. High home prices and rents suggest no slowing in demand for housing in close-in communities. But the numbers hint demand for housing in King County has run up against outdated growth targets and other barriers to accelerating construction of more homes. Housing prices and rents are increasing regionwide, with large increases reported in once-peripheral markets like Issaquah and Marysville.
Growth has not slowed in King County. Central cities like Seattle and Bellevue have been rocketing through outdated growth targets for several years. But cities face no penalty for not increasing capacity as long as they are "meeting GMA requirements", i.e. planning for a growth forecast that predated the boom. Zoned supports as many housing units as the GMA requires, but fewer than the market needs to supply. Easing barriers to market rate housing is politically fraught. The process of adjusting growth targets upwards is likely to work slowly through another comprehensive planning cycle.
Even though the region's worst traffic is on long commutes from the far north and south, concerns about local traffic congestion can defeat efforts to create more housing in centrally located suburban inner suburbs. Will we look back at 2016 as the year exurban sprawl returned?
Several more charts after the jump:
A slight decrease in net migration from overseas in 2016
A predictably boring chart of births - deaths. Boring is good.
DOL data indicates domestic migration from other states is increasing in King County