Washington State, October 2, 2025
News Summary
Washington state has reported a significant drop in residential construction permits, returning to levels not seen since 2013. About 33,000 permits were issued last year, contrasting with previous peaks before the pandemic. Industry leaders are concerned about various factors such as policy changes, rising costs, and lengthy permit timelines contributing to the decline. Local efforts are being made to streamline the permitting process, particularly for Accessory Dwelling Units, in an attempt to boost housing supply amid escalating prices and demand.
Washington State Sees Sharp Decline in Residential Construction Permits, Returning to 2013 Levels
The number of residential construction permits issued in Washington state has seen a significant decline, dropping back to levels not seen since 2013. Recent findings from the state Economic and Revenue Forecast Council indicate that only about 33,000 residential housing permits were issued last year. This marks a stark contrast to the peak years prior to the pandemic.
In 2017, permits had risen to approximately 46,000, continuing to increase to about 48,000 in 2019. However, with the onset of COVID-19 and subsequent state-imposed lockdowns that categorized construction as nonessential, the number of permits fell to 44,000 in 2020. As the market began to rebound, the issuance of permits surged to around 52,000 in 2021, only to experience a troubling decline in the ensuing years.
Moving forward, the ERFC forecast anticipates an increase in housing permits in the coming years; however, they are expected to remain below the levels observed in 2021 and 2022. The sharp decrease in permits has raised concerns among industry leaders. Some have expressed shock at the rapid downturn and warned that without substantial changes in building processes, there may be a reluctance among builders to pursue construction in the state.
Several recent policy changes may have played a role in the permit decline. One noteworthy change is a revision to the State Energy Code, which now requires the installation of heat pumps, complicating construction efforts. Additionally, Initiative 2066, which aims to protect the use of natural gas from government bans, likewise poses challenges. Restrictions surrounding buffer zones around wetlands limit the land available for development, further impeding builders from meeting growing customer demands.
Industry officials have also highlighted rising costs and uncertainty regarding permit timelines as factors that discourage builders. The waiting period for a permit can range anywhere from 190 days to five years, making financial planning and decision-making increasingly difficult for construction companies. The median sales price for a single-family home in Washington has soared to $675,600 in the second quarter of the fiscal year, a staggering 133.5% increase from a decade earlier, when it was just $289,300. This rapid escalation means that around 80% of families in Washington are now unable to afford a home.
In recent months, King, Snohomish, and Pierce counties reported a total issuance of only 3,742 single-family permits in July 2024, reflecting a 7% decline from the same month the previous year. At the same time, the implementation of House Bill 1110—designed to support middle housing—has not yet shown the intended positive impact, as multifamily permits for July fell by a considerable 37% year-over-year.
Local policies, particularly Seattle’s Mandatory Housing Affordability fees on townhomes, have contributed to increasing construction costs and declining permit issuance. From 2019 to 2024, permits for new townhomes in Seattle have decreased by approximately 87%, which is projected to result in an estimated loss of $775 million in construction-related tax revenue over the next two decades.
Bearing in mind the need to boost housing supply to positively influence the overall housing market, there are movements to improve the permitting process in various cities. For instance, the Federal Way city council is set to vote on amendments aimed at simplifying the permitting process for Accessory Dwelling Units (ADUs). This includes permitting at least two ADUs on all single-family zoned lots while also limiting impact fees and removing entrance restrictions.
The Federal Way Housing Action Plan prioritizes encouraging homeowners to build ADUs, which can offer valuable housing options especially for intergenerational families and individuals with disabilities. Nevertheless, permit applications for ADUs in Federal Way remain low. Since 2023, only 13 applications have been submitted, resulting in just two permits being issued with others still pending.
Concerns have also been voiced by residents in Boise regarding a five-story apartment complex being developed by Hawkins Cos. They believe that the new development may negatively impact the local character and contribute to increased traffic. Some community members have called for adjustments to the proposed height of the building to better fit with existing neighborhood structures.
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Additional Resources
- The Center Square: Washington State Sees Sharp Decline in Residential Construction Permits
- Federal Way Mirror: Backyard Cottages and More Could Soon Be Easier to Build in Federal Way
- Idaho Statesman: Latest Business News
- BoiseDev: Wastewater Pipe Building Updates
- NBC Right Now: House Bill 1403 Could Bring More Condo Construction Across Washington
- Wikipedia: Construction
- Google Search: Washington housing market
- Google Scholar: Residential construction permits Washington
- Encyclopedia Britannica: Housing Construction
- Google News: Construction permits Washington
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