Aug 23, 2023 - News

New apartment construction slows in Seattle metro area

Data: CoStar; Chart: Axios Visuals

Even with longstanding housing cost and affordability issues, years of robust construction in the Seattle area may be shielding parts of the region from the immediate impacts of apartment project slowdowns on the West Coast.

Driving the news: Seattle is now seeing some of the nation's steepest rent decreases even though there have been far fewer multiplex housing construction starts this year, said Elliott Krivenko, Seattle's analyst for the CoStar Group, a real estate information company.

  • Rent is down for market-priced apartments in about half of the region's sub markets from last year, he told Axios.
  • In some neighborhoods — where new construction was concentrated, such as Downtown Seattle and Redmond — landlords are additionally offering concessions like a free month of rent, free parking and Kraken tickets, Krivenko said.
  • Seattle surpassed Los Angeles in the number of units under construction about a year ago, he said.

Of note: The availability of market-priced apartments in some neighborhoods does not erase the broader challenges facing Seattle and other West Coast cities, including rising homelessness.

Plus: Less permitting and fewer starts now may mean less new housing in the coming months and years, Krivenko said.

City of Seattle data shows a 68% drop in the number of multifamily housing projects breaking ground for construction between January and August this year compared to the same eight-month period last year, Department of Construction and Inspections spokesperson Bryan Stevens told Axios.

  • That includes apartments, townhomes, row houses, cottages and small efficiency dwelling units, he said.
  • Applications for permits for all types of residential housing in Seattle in the first two quarters of 2023 were down 62% year over year, Stevens said.

Go deeper: Decreasing construction could lead to losses in working-class jobs that disproportionately affect economically disadvantaged, young and less-educated workers, according to the Bureau of Labor Statistics.

What's next: With more than 70,000 units in some stages of planning in King, Snohomish and Pierce counties "there are a lot of potential projects that could enter the pipeline should conditions improve," Krivenko said.

  • Watch Shoreline, where there are currently 2,133 units under construction. Once those are completed, the city will have 40% more apartments and multiplex dwellings than it does now, he said.
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