(The Center Square) – A recently released report from the office of Lt. Gov. Denny Heck suggests vacant big-box stores and empty strip malls in many communities could be a partial solution for Washington state’s housing shortage.
The 2025 operating budget tasked Heck’s office with studying the potential for adding housing on commercial or previously commercial properties.
“An example would be converting an abandoned Sears store and the surrounding parking lots into a community of homes,” noted the study.
Earlier this month, Heck presented the findings to the Senate Housing Committee and spoke with The Center Square about the study results.
“The ancient phrase is ‘There’s gold in them thar hills,’” said Heck. “By universal consensus, people believe that there is a potential here to add a significant number of homes. It’s not a silver bullet, but it can make a material difference.”
The report noted that Washington needs 1.1 million new homes in under 20 years.
“Building communities on this land creates more homes without removing as much existing housing or greenspace,” according to the report. “Upgrading these properties can increase – massively some argue – tax revenue for local governments.”
Heck told The Center Square, “The reality is that as our society has shifted very dramatically to online purchasing, it has rendered the infrastructure in effect overbuilt. And consequently, it’s an opportunity – in fact, I would argue it’s low-hanging fruit – to help meet our housing needs.
“If done correctly, it’s a win, win, win, win, win. It provides additional housing that we desperately need. You significantly increase the revenues that come to local governments because you’re dealing with assessed property values that’s a multiple of what it was when it was two little retail outlets in a strip mall.”
Heck said in many cases, policymakers have exacerbated the problem and failed to respond to what is now a crisis.
“Many of them are, frankly, nowhere near where they need to be in understanding the depth of this problem of the severe housing shortage and all of the cost that we bear collectively for that circumstance,” he said. “Washington state has had the single largest increase in housing costs over the last 40 years of all 50 States; no close second. So, the long-held American dream, and I still believe people do have this dream of home ownership, is rapidly slipping away.”
Heck’s report references a 2024 report by HDR Calthorpe that projects that underutilized commercial properties in several counties have the potential for a massive increase in assessed value per acre:
Snohomish County showed an average increase in assessed value per acre from $816,000 to $36.595 M, with space for adding 196,102 units. King County showed an average increase in assessed value per acre from $1.155 M to $39.131 M, with space for adding 250,720 units. Pierce County showed an average increase in assessed value per acre from $943,000 to $27.62 M with space for adding 228,136 units.
Clark County showed an average increase in assessed value per acre from $443,000 to $24.283 M.
The Center Square reached out to Sen. Keith Goehner, R-Dryden, the ranking minority member on the Senate Housing Committee, for his take on the study findings.
“I appreciate looking at all variety of options, so I think that this is something that should be considered,” he said.
The 12th Legislative District Republican said his main concern revolves around the basic tenets of the Growth Management Act.
“The GMA does have these goals in there for housing, but we’ve really been restrictive in some of the options that we’ve allowed cities to be creative with in there along the way,” Goehner said. “So, this is an opportunity for a conversion of sorts that would create those housing units , which is great. But I think more fundamentally, we need to look at the bigger picture and say, ‘Are we really allowing communities to build in a way that suits their basic environment?’ And I think if we give more flexibility to the cities and counties that they will meet the needs.”
Goehner said the best way to make this happen is to incentivize the private sector.
“They will respond,” he said. “And typically, we’ve tried to engineer it from a governmental standpoint. But the governments don’t understand exactly the challenges that builders have and developers have.
Goehner said the most significant issue he’s seen in the growing housing crisis is the lack of dialogue with the building community.
“We don’t really consult with them in the planning process,” he said. “There may be some great opportunities here if we would just kind of ask the dreamers and the visionaries to weigh in.”
Heck told The Center Square the consequences of the housing crisis ripple through the entire economy and impact quality of life.
“The price of homes is going way, way up,” he said. “Home ownership is falling behind. If you rent, your cost is going up because if you can’t buy, you stay renting. If you stay renting, occupancies go up. If occupancies go up, rents go up, supply and demand.
“We reduce people’s retirement security because home equity is the number one asset of the average American. We’re reducing people’s standards of living. There’s nothing about the current path we’re on that is going to end up in a good place.”
Heck said Sen. Emily Alvarado, D-West Seattle, vice chair of the Senate Housing Committee, will offer a bill to move some of the study suggestions into action, and he’s optimistic there will be bipartisan support.
Goehner said he’s open to potential legislation but also hopes lawmakers can focus on getting government out of the way as part of the solution.
“What I’m saying is that when those builders come and say, ‘I’ve got this idea,’ we should say, ‘Oh, really? Let’s hear about it. What can we do?’ Rather than just come up with more resistance than actual encouragement. If we just get out of their way, they can be part of the solution.”
