The State of Washington estimates that the Puget Sound’s four counties need about 640,000 new homes by 2044 to meet population growth. Of these new homes, about half must be affordable to households earning very low incomes, meaning 50 percent or less of the metropolitan area’s median income (AMI). How can Washington State encourage more housing in the Seattle region in a way that ensures adequate access for people who are unable to afford the costs of living in market-rate units? Given the high interest rates now faced by homeowners and investors and declining building nationwide, addressing this question is essential to ensuring the region can be affordable to as many future residents as possible.

In this report, we evaluate what historical data show about the region’s likelihood of achieving the housing growth that the state estimates is needed. We project that the Puget Sound will face a gap of about 140,000 units over the next 20 years. We show that a 2023 Washington State reform that enables the construction of “missing middle,” small-scale apartment buildings throughout the state is unlikely to generate the number of units needed; moreover, the buildings authorized are unlikely to be cost-effective for most subsidized housing. High-density upzoning could better align with demand, but alone, such upzoning will not fully address affordability needs.