Declining Number of Building Permits Another Indicator of the Housing Crisis

The Puget Sound region is in a housing crisis, and increasing supply is critical if we are to put a dent in meeting the great need for more homes. Whether our communities add single-family, duplexes, triplexes, apartment homes, or backyard cottages, more housing choices mean more people can purchase or rent a home that fits their lives. However, rising interest rates and other challenges have put a damper on new home construction, which is reflected in a decrease in building permits issued. We explore what this means for the housing crisis and how cities can address it.

Locally and nationally, the number of permits is declining, according to data from the National Association of Home Builders (NAHB), which reports on the pace of homebuilding across the country. While the number of permits issued is different from the number of projects already under construction, they do indicate future building projects. As such, permit volumes are important figures in anticipating future housing choices in each region. When permits are low, it means there will be fewer new housing choices to meet a city’s needs. It means that more work is needed to remove barriers to adding much-needed housing.

In the Seattle area, single family building permits are down 23% and multifamily permits are down 44% as of August 2023, compared to the same period last year. Similarly, NAHB reported that nationally, both single-family and multifamily building permits were the lowest in large metro areas for the third consecutive quarter. Both large and small metro areas saw double-digit negative growth rates.

Some factors like interest rates are out of our control. However, there are steps cities can take now to remove process and regulatory hurdles to allow more housing choices without compromising environmental protections or other important policy goals. For starters, the permitting process is notoriously slow and complex, and restrictive land use regulations and tree policies can further contribute to delayed timelines. These delays are costly.

Fortunately, a new state law, SB 5290, identifies best practices local governments can take to foster a more streamlined permitting process. Additionally, adopting balanced tree codes offer another way cities can facilitate new housing choices while also realizing the valuable benefits of trees in our communities.

Now is not the time to add more costs and delay for those seeking a place to call home. If our region wants to make a dent in the backlog of homes that current residents, newcomers, and future generations need, then cities must adopt balanced housing and tree policies and streamlined permitting processes. Further delays and restrictions will only exacerbate the housing crisis.

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