Seattle’s Strict Energy Code Contributes To Housing Shortage

Developers say Seattle’s strict energy code contributes to housing shortage

Escalating rents for apartments in Seattle are anticipated as developers seek fewer permits, and shift their focus to other jurisdictions, according to a report last month in the Puget Sound Business Journal. Seattle’s strict energy code is cited as a reason for a steep drop in permits.

The Seattle Energy Code is updated every three years. The city claims its 2021 update and amendments make its 2018 commercial energy code “one of the strongest on climate in the nation.” A Council resolution requires the city’s energy code to remain 20% better than the national standard.

Developers say requirements can add more than $25,000 to the cost of each apartment unit, thereby making Seattle a less competitive place to build.

During the first quarter of 2021, developers sought permits to build over 5,800 rental units in Seattle. That plunged to around 500 for the May-to-July 2021 timeframe when updates to the municipal energy code took effect. During the past 27 months, there has been only one three-month period when there were more than 2,250 units in the permit pipeline, according to the PSBJ report.

Once again, Seattle is in the process of updating its code but some suggest the city could declare a two-year hiatus and use state rules, which are also stringent. There is no requirement for Seattle to exceed state requirements, although a city spokesperson said Seattle’s code is often about 10% better than the state’s requirements.