Washington State Faces Severe Housing Shortage, 250K New Homes Needed
A recent study conducted by the Building Industry Association of Washington has revealed that Washington State is facing a severe housing shortage, with a staggering 250,000 new homes needed to meet the current demand. Last year, despite the issuance of over 49,000 construction permits for new homes, it was nowhere near enough. According to the study, Snohomish County alone requires approximately 25,374 new homes, accounting for about 10% of the total needed.
The consequences of this housing shortage are significant. Rent and home prices have surged due to the imbalance between supply and demand, making it increasingly challenging for potential buyers to save for a down payment. Shockingly, the report states that less than a quarter of state residents can afford a median-priced home, with the figure dropping to a mere 20% in Snohomish County, where the median price hovers around $750,000.
To address this crisis, the Building Industry Association is advocating for changes in state laws governing zoning, the permit approval process, and building codes. It argues that these regulations are excessive and hinder the construction of new homes. By streamlining the permit process and reducing regulation, the association believes that the supply of housing can be increased and made more affordable. During the 2023 legislative session, the association pursued permit and zoning reforms to ensure more families have the opportunity to purchase homes in Washington.
Delays in the permit approval process not only hamper construction but also add significant costs to each home. On average, the permit review process in Washington State takes 6.5 months, contributing an additional $31,375 to the cost of a home. In Snohomish County, where delays are even longer, the average cost increase amounts to approximately $46,000 per home. These costs are ultimately passed on to buyers, further exacerbating the affordability crisis.
The association recommends shortening the permit approval process to 120 days or less, but acknowledges that this may be challenging due to staff shortages and technological limitations faced by jurisdictions. However, a recently passed permit reform bill aims to address these issues by requiring cities and counties to proactively notify builders regarding any pause in the permit review process. This crucial change will enable builders to fix any issues promptly and keep the construction process moving smoothly.
In addition to permit reforms, the building association has supported legislation that allows for the construction of two-story condominium developments with 12 units or fewer under residential code. Furthermore, the association has advocated for workforce development initiatives to address the shortage of skilled workers, such as plumbers and electricians, who play a pivotal role in the construction industry.
The demand for new homes, condominiums, and apartments in Washington shows no signs of abating. By 2040, the state’s population is projected to increase by 17% to nearly 9 million residents, while Snohomish County is expected to gain an additional 300,000 residents in the next 20 years. A report from the Washington State Commerce Department estimates that more than 143,000 new homes, condominiums, and apartments will be required in Snohomish County by 2044 to meet the housing demand.
Addressing this housing shortage requires a multifaceted approach. The Building Industry Association of Washington emphasizes that there is no single solution but rather a need for a comprehensive strategy. This includes accelerating the permit process, striking a balance between community concerns and housing needs, and reevaluating design standards and building codes that contribute to increased costs.
The housing crisis in Washington State calls for urgent action from policymakers, developers, and community stakeholders. By working together and implementing the necessary reforms, Washington can begin to alleviate the severe housing shortage and make homeownership more attainable for its residents.
