With All the Construction Going On, Why is Housing Inventory Still So Low?

 

The huge amount of construction going on in our area is currently a hot topic of conversation. Cranes, hammering, street signs—it seems like it’s everywhere! Yet despite all this building, the Seattle area continues to struggle with extremely low housing inventory. In fact, the National Association of Realtors estimates that our region is 70,000 units short of meeting our current housing needs. How can this be possible? Well first off, we know that our area, with its beautiful setting and booming economy, is attracting lots of newcomers. And when I say lots, I mean lots. The Seattle area is adding more than 350 new jobs every day. Big businesses like Amazon play a huge role in this, with Amazon alone occupying 19% of all prime office space in Seattle–the most for any employer in a major US city. And while the influx of people coming into the city grows, we just plain are not keeping pace with new construction to house them.  It turns out, in fact, that the majority of those building projects we see all over the city aren’t really addressing low housing inventory because current city and county regulations make building offices and rental units more appealing to developers than condos, townhomes and single-family houses. Sure, we see a lot of the “Modern Boxes” (as they’re being dubbed) going up all over our neighborhoods. However, building space is limited and their numbers aren’t near enough to fill the inventory shortage and oftentimes they’re just replacing a home that’s been torn down. Hmm, so what about condos? It seems that in an urban area condos could potentially come to the rescue as their structure allows for more condensed housing on a smaller footprint. Believe it or not, however, there have been virtually no new condo projects in recent years due largely to the Washington Condominium Act which includes provisions requiring developers to warranty their construction work for four years. Seems like a good idea, however due to the fact that a number of past Seattle condo projects are now in lawsuits or arbitration, developers know that new projects could have a similar fate and thus opt out for safer projects like office space and rental units. So there you have it—our dilemma in a nutshell. Our cities future will largely be determined by how city and county officials design new regulations and find creative solutions for a housing shortage that will only get worse if not addressed head on.

Posted on October 13, 2017 at 3:57 pm
Tamara Stangeby | Category: Uncategorized | Tagged , , , , ,

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