Bellevue Out-Permitting Seattle With a Fifth of the Population [9/1/26]
September 1, 2026
Aaron Kirk Douglas

Bellevue Out-Permitting Seattle With a Fifth of the Population [9/1/26]

Bellevue’s permit pipeline passes Seattle’s, with a fifth of the population

Bellevue logged permit applications for at least 1,585 new multifamily units between January and June. This compares with 1,137 units in Seattle over the same period, according to preliminary city data reported by The Urbanist. Seattle’s new housing applications are on pace to fall 30% in 2026. This comes after already dropping 38% in 2025. Even though applications are falling, the city still delivered more than 8,000 homes last year from permits approved earlier in the decade.

Bellevue’s edge leans heavily on its “Wilburton Supercharger” program. This program lets developers count affordable units toward both the state’s Multifamily Tax Exemption program and the city’s affordable-housing mandate at once. In exchange for setting aside 20% of units as affordable to households earning up to 80% of area median income, developers get a 12-year property tax exemption.

Seattle’s comparable program, Mandatory Housing Affordability, requires deeper affordability, 5% to 10%. However, its fees have not been recalibrated in years. The Seattle Housing Roundtable estimates at least 70 shovel-ready projects, roughly 8,000 homes, are stalled awaiting better conditions. Seattle Mayor Katie Wilson issued an executive order this month to streamline permitting and launched a Housing Production Task Force. However, she deferred action on MHA fee cuts to next year.

Why it matters: The Wilburton Supercharger is a working example of an incentive actually moving projects, not just a policy on paper. For owners in Seattle, an 8,000-home stalled pipeline sitting on the sidelines means less near-term competition than the raw permit numbers suggest. At least until fee relief unsticks those projects, this situation will persist. Watch whether Seattle’s task force proposes anything resembling Bellevue’s model.

Spokane apartment permitting hits its highest pace in 20 years

The city of Spokane permitted 27 multifamily projects of three or more units through July, totaling 561 units, the third-highest year-to-date total in more than two decades, according to Ryan Thompson, an analyst with the city’s Development Services Center. That is up 77% in unit count for buildings of five or more units compared with the same period in 2022. Currently permitted large multifamily projects are valued at more than $110 million, up 57% from $71 million a year ago. The largest project in plan review is the $71 million, 200-unit Kendall Yards Podium mixed-use development. The city’s pipeline could reach around 900 permitted units by year-end.

Why it matters: Spokane’s permitting activity points to lender and investor confidence returning to Eastern Washington faster than in the Puget Sound region. Owners with product in the delivery submarkets should plan for more concession competition in 2027 lease-up. In addition, investors should underwrite Spokane on occupancy and expense control given HB 1217’s rent cap, not on rent growth alone.

Spokane Housing Authority opens its largest project: 240 affordable units

Orchard Vista Apartments, a 240-unit affordable community in Spokane Valley’s Dishman Hills area, held its grand opening after breaking ground last year. The roughly $68 million project was funded through a mix of state and city dollars. It was also funded by the Seattle Foundation’s Evergreen Impact Housing Fund and bank financing. Units are reserved for households at or below 60% of area median income and rent for $1,165 a month for a one-bedroom. That compares with $1,500 to $1,600 for a comparable market-rate unit. Of the 240 units, 106 were leased and 58 occupied at opening, with the rest expected to fill within weeks.

Why it matters: A 240-unit affordable community leasing up within weeks of opening confirms strong demand at the 60% AMI tier, a data point worth citing when underwriting nearby workforce housing. Additionally, the public-private delivery model, cited as 30% cheaper and faster than a conventional public build, is worth studying for developers considering an affordable or mixed-income product in Eastern Washington.

Seattle-area sales this week show a market still splitting by vintage

Three transactions closed in the Seattle area this week, and together they show a widening gap between newer and older product. Chicago-based Waterton paid $155 million, or $450,581 a unit, for Arrivé, a 344-unit, 43-story tower built in 2019 in Belltown. Downtown, the 106-unit Aperture on Fifth sold for $32.25 million, or $304,245 a unit, roughly 19% below the $39.96 million the seller paid in 2015. In Renton, Bridge Partners of Walnut Creek, California, paid $47.5 million, or $243,589 a unit, for the 195-unit Cascadia at Fairwood Landing.

Why it matters: A 2019-vintage trophy tower traded for near $450,000 a unit, while a comparable-quality but older downtown asset sold nearly 20% below its 2015 basis. Now, vintage and location inside Seattle matter more to pricing than they did two years ago. As a result, owners of older downtown product should price a markdown from the prior basis into any near-term disposition plan.

Oregon

Portland-area multifamily values stop falling, HFO report finds

The midyear report from HFO Investment Real Estate, released Aug. 25, says the Portland-area market has stopped repricing downward and buyers and sellers are selectively finding each other again. Metro valuations are projected to gain 0.4% in 2026 after holding flat in 2025. In addition, vacancy fell to 7%, down from a 7.9% peak. Only 2,550 units were under construction across the metro in the second quarter. Notably, 16 of 25 submarkets had zero units under construction.

Why it matters: Washington owners should watch this trend too. Portland’s thinning pipeline and stabilizing values are the same setup Puget Sound submarkets are working toward. Portland’s experience this cycle offers an early read on how quickly a market can turn once new supply dries up.

National

National apartment supply is set to bottom out in 2027

Yardi Matrix’s third-quarter forecast projects that new U.S. apartment supply will reach its lowest point in 2027 at about 444,000 units. Afterward, supply is expected to expand only marginally through 2031. That compares with 697,099 units delivered in 2023. The recently passed 21st Century ROAD to Housing law is cited as adding supply-side incentives for multifamily investment.

Why it matters: A national supply trough in 2027 supports rent growth and asset values as new competition eases. In turn, this reinforces the case for acquiring ahead of that window rather than after it.

Long-term rates remain the headwind, even with the Fed on hold

Oregon’s latest state economic forecast, which draws on the same regional data Washington owners track, expects the Federal Reserve to hold its benchmark rate until June 2027. The 30-year U.S. Treasury yield recently approached 5.31%, the highest since 2002. In addition, state economists note market yields have not fallen in step with the Fed’s earlier cuts.

Why it matters: Long-term rates staying elevated is the more important signal than the Fed funds rate itself for anyone pricing acquisition debt or a refinance over the next 18 months.

HFO Investment Real Estate is the largest multifamily-only brokerage in the Pacific Northwest, with 12 brokers focused exclusively on apartment investment sales in Oregon and Washington. Call (503) 241-5541

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