Housing shortage has spread across Pacific Northwest, new study shows

There simply aren’t enough homes in the Seattle area. It’s a long-standing problem here, as it is in other major coastal cities.

But now, a new report finds that this problem has spread to parts of the country where, until recently, housing was more abundant and affordable, even in America’s interior. And in the Northwest, it’s not just an issue in the Seattle and Portland areas.

The report includes 16 metro areas in Washington, Oregon and Idaho, and found that all 16 had a housing shortage in 2019.

The report comes from Up for Growth, a Washington, D.C.-based nonprofit research group that advocates for an increase in housing supply. Researchers used data from the U.S. Census Bureau and U.S. Department of Housing and Urban Development to estimate the number of housing units that exist in an area versus the number needed to meet demand.

The scale of an area’s housing shortage is not easy to quantify, and this report is a first of its kind. The report attempts to capture how many new households would need to be formed for the housing supply to be sufficient and allow people to avoid less than ideal living situations caused by high housing costs.

That would mean, for example, the two roommates splitting a one-bedroom apartment, with one sleeping in the living room, would both be able to afford their own studio unit. Or, the adult who’s living with parents to save on rent would be able to afford to move out.

Some parts of the county still do have a surplus — in other words, there is enough housing to meet demand. But from 2012 to 2019, a slew of metro areas slid from a housing surplus to a housing shortage. And in many areas where a shortage already existed in 2012, it had only gotten worse by 2019.

In nearly all 16 metro areas in Washington, Oregon and Idaho, the housing situation worsened from 2012 to 2019. And in five of these metro areas, a housing surplus in 2012 had vanished by 2019.

The most dramatic turnaround was in Bend, Oregon, where a 2% surplus turned into an 8% shortage. Closer to Seattle, the Bremerton-Silverdale-Port Orchard metro in Kitsap County also saw its small 0.4% surplus sink to a 4% shortage.

That’s not much of a surprise. As home prices and rents soared in Seattle, Kitsap County became an attractive, less expensive alternative — and only a ferry ride away. But the influx of new residents from Seattle drove prices and rents up, creating a shortage.

The Northwest’s worst housing deficit was in Salem, Oregon. According to the report, Salem needed 13,000 more housing units than it had in 2019 — a little more than 10% of its total existing housing stock of 126,000 units.

In the Seattle metro area, the report estimated a shortage of around 81,000 units in 2019, up from 41,500 in 2012. The 81,000 units pencils out to 5% of the 1.6 million existing units in our metro area, meaning we had a 5% shortage. In 2012, the shortage in Seattle was less than 3%.

There are several reasons behind the underproduction of new housing units. For one, land and construction costs have increased significantly in the past decade. Local development fees and other government requirements, zoning laws and opposition to new construction from many homeowners have also hindered the creation of new housing.

In two Washington metro areas — Yakima and Wenatchee — the housing shortage slightly decreased from 2012 to 2019.

The report captures the period before the pandemic. If anything, the situation has probably gotten worse since then. Demand for homes in many areas outside major cities surged during the pandemic, as remote work enabled some folks to live farther away from the office. Historically low interest rates also helped fuel demand.

In a market with an ample supply of housing units, the median rents and home prices aren’t so out of whack with median incomes, as they have long been in Seattle.

Statewide, Washington had a deficit of 140,000 housing units in 2019, which represented 4.4% of the total existing housing stock. That ranked as the fifth-worst housing shortage, behind California, Colorado, Utah and Oregon, in that order.