Washington’s shortage of affordable housing stock stands in stark contrast to its surplus of vacant office space and that dynamic is on full display in Seattle, according to real estate economist Matthew Gardner.
“Downtown we’re looking at north of 30% vacancy. One square foot in three is empty,” Gardner told TVW’s The Impact.
This year, Gov. Bob Ferguson signed Senate Bill 6026, an effort to boost residential development in commercial and mixed use areas by overriding local restrictions. It dovetails with a 2025 law, House Bill 1757, which waives certain energy code requirements for commercial properties converted to housing units.
Despite the number of vacant buildings, Gardner does not see commercial property conversion as a realistic option in many cases.
“If you think about a large office building, there are only certain spots where you have plumbing, so you have to run plumbing to the rest of the building. That’s going to be a problem,” he said. “Yes, we’ve seen a couple of small, small buildings convert, but it’s not going to solve our problem in terms of either the supply of residential housing or the overhang of commercial space.”
There are initial signs of recovery in the commercial occupancy rate.
While some reports highlight modest improvements in the situation facing homebuyers, Gardner does not anticipate a major drop in housing prices in the foreseeable future.
“I just don’t see any reason why that would be the case, although we certainly know some younger households would like to see it,” said Gardner. “Prices have not collapsed and I don’t think they will.”