Washington State Sees Sharp Decline in Residential Construction Permits

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 sharply decreased to levels seen in 2013, according to a report by the state Economic and Revenue Forecast Council (ERFC). This significant downturn raises concerns about the future of construction and housing availability in the state.

In 2013, approximately 33,000 residential housing permits were issued. By 2017, this number increased to around 46,000 permits. However, the situation took a turn as the onset of COVID-19 brought about state-imposed lockdowns, designating construction as nonessential. This resulted in a decline of permits from 48,000 in 2019 to 44,000 in 2020.

Although there was a bounce-back in 2021 with about 52,000 permits issued, the following years showed a significant decline that has returned the numbers to pre-2014 levels. The ERFC anticipates a rise in housing permits in the upcoming years, though they are expected to remain below the levels achieved in 2021-22.

Industry leaders express concern over the drastic drop in permits. A spokesperson from the Building Industry Association of Washington (BIAW) noted the alarming decrease and warned that if building does not become easier, builders may cease their efforts to construct homes within the state. Recent policy adjustments, including revisions to the State Energy Code that mandate the installation of heat pumps, are believed to have negatively impacted the construction landscape.

The introduction of Initiative 2066, which is backed by BIAW to safeguard natural gas usage from governmental bans, adds another layer of complexity to the building processes. Additionally, buffer zones around wetland areas limit the available land for development, making it increasingly difficult to cater to customer demands.

Another challenge arises from the uncertainty surrounding permit timelines, which can range from 190 days to five years. This unpredictability adversely affects builders’ financial planning and strategies. Meanwhile, the median sales price for a single-family home in Washington has surged to $675,600 in the second quarter of this fiscal year, marking a staggering 133.5% increase from ten years ago, when the median price was only $289,300. Consequently, around 80% of families in Washington state are unable to afford a home.

Recent data shows that in July, King, Snohomish, and Pierce counties collectively issued 3,742 single-family permits, which reflects a 7% decline compared to July 2024. Although the passage of House Bill 1110 in 2024 aimed at boosting middle housing initiatives, multifamily permits in July experienced a significant decrease of 37% compared to the same time last year.

Local policies, like Seattle’s Mandatory Housing Affordability fees imposed on townhomes, have been credited with driving down both permits and costs. From 2019 to 2024, new townhome permits in Seattle fell by nearly 87%, resulting in an anticipated missed revenue of $775 million in construction-related taxes over the next 20 years. Building advocates emphasize that improving housing supply is crucial to positively impacting the housing market.

In an attempt to address these challenges, the Federal Way city council is scheduled to vote on proposed code changes to enhance the permitting process for Accessory Dwelling Units (ADUs). These proposals aim to streamline construction by allowing at least two ADUs on all single-family zoned lots, limiting fees, removing entrance restrictions, enabling ADUs in existing structures, and reducing parking requirements near major transit stops.

The Federal Way Housing Action Plan emphasizes the importance of encouraging homeowners to build ADUs to diversify housing options and increase population density. Despite ADUs offering accessible housing solutions, particularly for intergenerational households and individuals with disabilities, permit applications have been low in Federal Way, with only 13 applications submitted since 2023, resulting in two permits issued while others remain in process.

On a different note, concerns have surfaced among residents in Boise regarding the proposed development of a five-story apartment complex by Hawkins Cos.. Neighbors believe the project could disrupt local character and lead to increased traffic. One resident advocated for lowering the proposed building height to better align with existing structures in the area.

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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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