By MBAKS Senior Policy Analyst Allison Butcher

Housing inventory for sale fell between September and October to 1.74 months’ supply in King County and 1.51 months’ supply in Snohomish County. In both counties, this is down from a year ago. Meanwhile single-family and multifamily building permits were down 6% in the Seattle Metro Area (including King, Snohomish, and Pierce counties) in September compared to the same period last year.

The Builder's Bulletin is intended to provide a convenient way to track housing in our market and includes information from the Northwest Multiple Listing Service, State of the Cities Data Systems, Office of Financial Management and the Washington State Employment Security Department.

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Contact: data@mbaks.com

This month's Builders Bulletin features a new data point, the NAHB/Wells Fargo Housing Market Index (HMI). This is a national and regional indicator that tracks builder perception of current single-family home sales and expectations. It has decreased every month in 2022, reflecting a general bearish outlook towards the housing market amid rising construction costs and high interest rates.

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The Seattle City Council on Monday, October 2, approved an upzone to allow taller buildings in the Uptown neighborhood of Seattle, known to most as lower Queen Anne. It’s the latest area in a series of upzoning approvals, following the University District, downtown and South Lake Union, Chinatown International District, and certain spots in the Central District.

For those not in the know, upzoning is the ability for builders to create taller buildings to facilitate more homes or businesses. The lower Queen Anne upzone approval, which passed with a vote of 7-0, at its maximum will see an increase of building heights from 85 to 160 feet near South Lake Union, and from 40 to 85 feet for most of lower Queen Anne—which is twice as tall as existing buildings near Seattle Center. Much of the approved surrounding land, however, will see more modest changes.

Residents have already weighed in on the approval, some worried about an eventual "lack of daylight" or new views dominated by steel and glass. Others, however, see a sunnier side, noting that the greater Seattle area needs new, affordable housing where it can get it.

Speaking on affordability, another factor in the approval is the inclusion of Seattle’s Housing Affordability and Livability Agenda (HALA) program, a "multi-pronged strategy," according to seattle.gov, that will in this case require developers to include rent-restricted apartments in their project plans or face fees. Fees paid will go toward nonprofit efforts to build rent-restricted apartments in the lower Queen Anne area or elsewhere. The rent-restricted homes are aimed at those who make no more than 60 percent of the area’s median income—currently just over $40,000 in the City of Seattle for a single occupant, or $57,000 for a family of four.

Developers are required to dedicate 5 to 10 percent of each commercial development and 7 to 10 percent of residential projects to affordable housing or shell over $8 to $29.75 per square foot, depending on the project.

The HALA program goal, led by Councilmember Rob Johnson, is to create 50,000 new housing units in the next 10 years, including 20,000 units dedicated to lower income households. The goal for 2018 is to focus on a citywide rezone package, which will include a proposal to increase building heights and affordable housing requirements to areas that will likely include Rainier Beach, Othello, upper Queen Anne, Crown Hill, and Wallingford.