Credit: IJ.org

Paying Ransom for a Building Permit

by | Aug 11, 2020 | Regulation

Seattle’s ironically-named ‘Housing Affordability’ law makes renovating a modest home prohibitively expensive for middle-income homeowners.

Almost two years ago, Andre and Erika Cherry bought their first home together. The home, located in the Highland Park neighborhood of Seattle, was a modest two-bedroom fixer-upper built in 1916. After a century of wear and tear, the home showed its age and needed a top-to-bottom renovation—but the Cherrys were up for the challenge. They had always dreamed of owning a home together, and this was the only home they could afford.

Unfortunately, the Cherrys’ dream quickly turned into a nightmare when the city informed them that they needed to pay a whopping $11,000 fee in order to get a building permit—all because of Seattle’s wildly inaccurately named “Housing Affordability Law.” The Cherrys don’t have $11,000 to spare in their budget.  Now, a year later, with their renovation plans on hold, they have partnered with the Institute for Justice (IJ) to formally demand that the city of Seattle drop its outrageous ransom request and issue a building permit immediately.

“Seattle’s ‘housing affordability’ law has made it completely unaffordable for people like us to own a home in this city,” said homeowner Erika Cherry. “We dreamt of turning a fixer-upper into our dream home. But the city’s law has turned that dream into a nightmare. The amount of emotional and financial stress this ordeal has caused is immeasurable.”

The Cherrys’ trouble started shortly after they closed on the home, when Seattle passed the Mandatory Housing Affordability Ordinance. The new ordinance, which became effective in April 2019, changed the zoning for the Cherrys’ home and put it into an “MHA” zone. Under the MHA, residential properties are subjected to substantial requirements whenever the owner builds a “new structure” or makes additions or alterations to existing structures that increase the number of “dwelling units.”

Because of the Cherry home’s age and condition, they put together plans for a major renovation that would fix structural issues, modernize the finishes, and most importantly, bring it up to current code. At the end of their renovations, the plans dictated that their two-bedroom single-family home would remain a two-bedroom single-family home.

But the city didn’t see it that way. The city says that the Cherrys are creating a “new structure” because they are changing the exterior of their home “too much.” As a result, the city has demanded that the Cherrys pay an additional $11,000 in fees or else they won’t get a permit. This delay has already cost the Cherrys thousands of dollars, and it will continue to cost them thousands more.

The Cherrys’ renovation should not be subjected to MHA. Their renovation does not add “dwelling units” to the existing home, nor does it create what any normal person would call a “new structure.” They bought a two-bedroom single-family home to live in. Following their renovations, their home will still be a two-bedroom, single-family home to live in.

“No one should have to pay thousands of dollars in extra government fees just to renovate their home,” explained William Maurer, Managing Attorney of the Institute for Justice’s Washington Office. “It is a measure of the city’s lack of understanding of how economics works that a law claiming to lower the cost of housing actually makes this affordable housing prohibitively expensive.”

Not only was MHA never intended to prevent people from renovating their own homes, applying it to the Cherrys is a violation of their constitutional rights. Because governments often have broad discretion to deny land-use and building permits, permit applicants are especially vulnerable to government coercing them into giving up their rights. Seattle’s costly demands to give the Cherrys their building permit are precisely the kind of “out-and-out . . . extortion” the U.S. Supreme Court has made clear violates the constitution.

The Cherrys cannot afford the city’s costly demands, and they should not have to pay thousands in additional fees just to make their home safe and consistent with modern standards. But they now face a terrible choice: Give up their right to renovate their own home; give in and hand over the money they would spend on their home renovation to the city; or sell out and not be homeowners anymore.

If this can happen to the Cherrys, no homeowner (or would-be homeowner) in America is safe from these kinds of extortionate demands. That is why the Institute for Justice has joined with the Cherrys to ensure that Seattle cannot coerce them into giving up their right to use, and renovate, their own home.

IJ litigates to limit the size and scope of government power and to ensure that all Americans have the right to control their own destinies as free and responsible members of society. Visit their website at www.ij.org

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