Architecture, Multifamily Residential
Why Isn’t Seattle Building Enough Housing?
Puget Sound needs an estimated 275,000 more homes over the next decade, yet permits are hitting new lows. Rising interest rates, slow permitting, and high costs are driving the shortfall. Here's what's blocking new housing in Seattle, and the zoning changes, permitting reforms, and fee adjustments that could help close the gap.
September 15, 2026
Seattle and the surrounding region are facing an increasingly acute housing supply and affordability crisis creating a serious Seattle housing shortage in particular. The problem is complex, and it has housing advocates, government officials, and building industry professionals all asking the same question: if demand for housing is so high, why isn't more housing being built to meet it?
Housing is a basic human need, but it is also a commodity with prices that rise and fall based on supply and demand. In Seattle and the surrounding areas, a lack of the housing people need, in the places they need it, has created scarcity and driven prices up to the point that many residents can no longer afford to live here. This post looks at the region's housing needs, the challenges standing in the way of building enough of it, and some ways the crisis can be eased.
Breaking down Seattle's housing needs.
The Puget Sound region needs an estimated 275,000 more housing units over the next decade to keep pace with population growth. And it is not just more housing we need, it is a variety of housing that meets residents' particular needs for size, number of bedrooms, and location.
The Right Location
Renters and homeowners need housing available near transit or in the neighborhoods where they already live and work. Unlike products or services that can be produced elsewhere, housing is fixed in place. A surplus of housing in Texas, for example, does nothing to ease the need for housing in King, Kitsap, Pierce, or Snohomish counties. One exception is recreational vehicles and boats, which are being used as residences more often in our area.
The location and density of housing is critical to making sustainable transportation options work: access to walking, biking, and effective public transit routes is essential. Shoreline, Lynnwood, Bellevue, and Redmond, for example, are all building housing near their new light rail line extensions.
Durable and Dignified Buildings
Regardless of budget, all residents need quality housing that provides a safe, quiet, and dignified indoor environment. Building owners and homeowners need a durable asset that retains its value, which means effective waterproofing and finishes that hold up to wear and tear. New development also needs to address local priorities for attractive buildings that strengthen communities and respond sensitively to neighborhood character and history.
Affordability
The housing crisis sits where basic human needs meet personal finance. 48% of renters in the Puget Sound region are cost burdened, meaning they pay more than 30% of their income on housing.
At best, residents who are cost burdened make do with inadequate housing, such as too few bedrooms or a long commute, and pay more for it while cutting back on other essentials. That drives decreasing savings, increasing debt, and cutbacks on healthcare, education, and starting families.
At worst, those who are cost burdened get forced out of housing entirely. As Gregg Colburn and Clayton Page Aldern explain in Homelessness is a Housing Problem, housing market conditions are the primary driver of homelessness.
Options for buying an affordable home also need to include starter homes at a lower price point, such as townhouses and condos. Like rental units, these should span the full range of unit types, including family sized units. The most direct way for the private market to improve affordability is to build more supply, which lowers costs for everyone.
The housing conundrum.
If 48% of regional renters are cost burdened, many are making do with inadequate housing, and those hoping to buy are locked out of the market, demand is clearly high, and there is real incentive for the housing industry to fill that gap. Yet construction has not kept pace with the shortage. Local jurisdictions are reporting the lowest permit issuances on record for new housing projects. If demand is so high, why isn't more housing being built to meet it?
Obstacles to creating more housing.
Residential real estate is an inherently risky investment because of economic cycles, which discourages developers from investing in new projects. The following challenges each weigh on a developer's pro forma, and together they discourage new housing.
Interest Rates
Interest rates on home and construction loans are higher than they have been since the early 2000s, making it hard for new projects to pencil. For current homeowners, it also doesn't make financial sense to move if it means giving up a lower rate on their existing home, which ties up supply and makes ownership even harder to reach.
City and County Processes
Jurisdictional processes can be slow and hold up construction schedules. Since each jurisdiction sets the pace at which a project can move through permitting, developers often choose to pursue projects in areas more likely to reach entitlements on time, an important way to manage risk.
Construction Costs
Construction cost escalation has moderated lately, but costs remain high and hard to predict. Tariffs have added another layer of uncertainty for anyone planning a project, since costs could still climb unpredictably.
Operational Costs
Insurance premiums for Seattle area property owners have risen as much as 85% since 2019, and property owners absorb most of that increase rather than passing it on to tenants.
Legal protections around evictions are a crucial tool for keeping renters housed, but nonpaying tenants can still create a significant burden for property owners. Where renter protections are strongest, that can have the unintended effect of discouraging landlords from renting out units at all. Small property owners feel this the most: an owner with two or three units can be devastated by just one that doesn't cover its rent, while a larger owner can spread the impact of a handful of nonpaying tenants across a much bigger rental income base.
Ways to alleviate the housing crisis.
Some causes of the housing shortage are hard for local government and industry to influence, such as high interest rates. Others can be addressed locally by people willing to get creative.
Update the Zoning Code
The first step toward more housing is making it legal to build. State House Bill 1110 changed residential zoning so that middle housing, such as cottage housing, townhouses, and flats, is now allowed on all residential lots. Seattle is following up with its own Centers and Corridors growth strategy, which adds 30 new neighborhood centers, expands the boundaries of urban centers and frequent transit corridors, and updates lowrise and midrise development standards. The debate over how much housing growth Seattle should be targeting continues alongside these changes. When we do feasibility studies, we can quickly determine how much capacity a property can support, and an updated zoning code makes that a clear answer from the start.
Streamline Permitting
Some jurisdictions have shown real commitment to streamlining permitting. Seattle, for instance, created the Permitting Accountability and Customer Trust, or PACT, team in late 2025 to target housing production delays. The city has also temporarily made Design Review optional while permanent changes to that process are worked out.
Lower Fees
Jurisdictions have some levers to pull when housing production lags. One that developers have pushed for is a moratorium on Mandatory Housing Affordability fees. Mayor Katie Wilson's office considered a temporary 80% reduction in MHA fees but shelved the plan in July, facing a lack of consensus. Proponents are still urging city leaders to find a compromise before the fall budget cycle.
Collaborate Creatively
A healthy housing industry depends on the success of individual projects. That takes teams of industry professionals who can navigate constantly changing land use and energy code regulations along with jurisdictional processes. A successful housing project depends not on a single solution but on a coordinated approach that brings together land acquisition, financing, community engagement, design, and construction into one finished project.
The future of housing is not predetermined.
The housing crisis is a daunting, complex issue, but Board & Vellum believes the future of housing is not set in stone. As architects and designers, our role is to help shape the solution alongside the industry professionals working this problem alongside us. Stay tuned to our blog for ongoing coverage of what's changing in housing.
