(The Center Square) – The number of residential construction permits issued in Washington state has fallen to 2013 levels, according to a new revenue forecast put out by the state Economic and Revenue Forecast Council. Builder industry advocates argue that the downward trend is due to a combination of state and local policies around housing, along with long-term systemic problems in the process.
In 2013, the number of residential housing permits was around 33,000. Within four years, that number had increased to 46,000 permits. During the 2020 state-imposed lockdowns that defined construction as a nonessential activity, permits fell from 48,000 in 2019 to 44,000. In 2021, permits issued increased dramatically to roughly 52,000 before plummeting rapidly in the following years. According to the ERFC forecast, housing permits are anticipated to increase in the coming years, but still remain well below 2021-22 levels.
Building Industry Association of Washington Vice President of External Affairs Jan Himebaugh told The Center Square the sharp decline in housing permits is “a little shocking,” but at the same time noted “for a long time we have been telling policymakers that if they don’t make it easier, people will stop building houses. A lot of those businesses that don’t want to build here anymore.”
One of the more recent policies that Himebaugh blames for the drop in housing construction are revisions to the State Energy Code that mandate the installation of heat pumps for space heating and cooling. Initiative 2066, backed by BIAW, was supported by a majority of voters last year. I-2066 seeks to protect natural gas use from state and local government bans.
Another issue builders have to contend with are buffer zones placed around wetland areas that restrict available land.
“We’re driven to the point where it’s either impossible to do what your customer wants or impractical,” Himebaugh said. “Those things all discourage people from participating.”
Although the number of annual permits has fluctuated over time, building advocates have for many years called attention to the drawn-out process for getting one from a local jurisdiction.
Government Affairs Director Jennifer Anderson with Master Builders Association of King and Snohomish Counties told The Center Square that “our members are proceeding with a lot of uncertainty. They know as much as the general public – that everything is costing more. Permits take a long time to get. That’s a lot of risks for the projects they’re taking.”
Himebaugh noted that “the risk for a builder and developer is ‘I don’t know if I’m going to get this in 190 days or five years.’ That’s a risk. Then you build a house nobody can afford. There’s only so many multimillion homes that people can build.”
According to a report by University of Washington’s Center for Real Estate Research, in the second quarter of this fiscal year the statewide median sales price for a single-family home rose to $675,600; in the second quarter of the fiscal year a decade prior, the median price home sold in Washington was $289,300, representing a 133.5% increase in the median home price. According to BIAW, 80% of Washington families are unable to afford a home.
According to MBAKS, in July, King, Snohomish, and Pierce counties collectively issued 3,742 single-family permits, which represented a 7% decline compared to the same month in 2024.
Despite House Bill 1110’s passage in 2024 with the intend to increase middle housing, multifamily permitting in July for those three counties was down 37% from the same month last year.
Anderson attributes this in part to local policies such as the city of Seattle’s Mandatory Housing Affordability fees on townhomes. According to a MBAKS report put out in August, “the goal of the MHA when it was adopted in 2019 was to create thousands of affordable housing units. However, fees imposed by this program have led to a simultaneous sharp decline in permits and an increase in costs for new townhomes in the city, preventing home production that could have supported an estimated 13,765 Seattleites.”
According to the report, permits for new townhomes in Seattle fell between 2019-2024 by roughly 87%, and the association estimates the city will lose $775 million in construction-related tax revenue over the next 20 years.
“Supply is the way we’re going to truly affect the market,” Anderson said.
