Washington Markets in Demand: Spokane and Tacoma [6/23/26]

Washington state’s rental market is marked by sharp contrasts this week. Spokane is drawing national attention as a top emerging multifamily market and a top-five renter destination — while simultaneously feeling the earliest pressures from enforcement of HB 1217 and new eviction-prevention requirements. Tacoma is producing tangible supply results from its zoning overhaul, and Seattle is navigating a high-stakes debate over whether to temporarily lower mandatory housing affordability fees to restart a stalled development pipeline. Add a softening state budget picture and a national construction start collapse, and here is your complete Washington picture for the week of 22 June.

Rental Industry Faces Mounting Headwinds — Spokane

The Spokane Journal of Business profiles Kelly Clark, founder of Rockstar Real Estate LLC, which manages 110 rental units in Spokane, in a detailed look at the pressures now converging on Washington state landlords and property managers. The combination of HB 1217’s rent stabilization caps (7 percent plus inflation or 10 %, whichever is lower), Spokane’s new June 1 eviction prevention ordinance requiring pre-eviction nonprofit referrals, rising insurance and maintenance costs, and tariff-driven supply chain pressures is squeezing operators’ margins from multiple directions.

Clark says the cumulative regulatory and financial risk is causing many landlords to tighten screening standards—which can make housing harder for marginal renters to access—and she expects some investors to exit the rental market rather than continue operating under current conditions.

Washington’s attorney general has already filed the first HB 1217 enforcement action in Spokane County against Wild Rose RV Park, which faced potential fines of $217,500 for attempting to raise rents 17 percent after the law took effect; the park ultimately paid less than $500 after complying with a consent decree.

Why It Matters: The Wild Rose case confirms the attorney general is actively using HB 1217’s enforcement provisions, not just holding them in reserve. For Spokane owners and managers, this is a signal to audit your rent-increase practices and eviction procedures now — before you become the next case study.

Spokane Journal of Business, June 18, 2026: https://www.spokanejournal.com/articles/18393-rental-industry-faces-mounting-pressures

Tacoma Sees 62% More Homes Enter Pipeline Following 2025 Zoning Overhaul

One year after Tacoma rewrote its residential zoning through the “Home in Tacoma” framework—allowing up to four units on any lot citywide—permit applications entering the development pipeline have jumped 39% compared to the five-year average, and the number of housing units in those permits is up 62%, according to city data. Density per project increased 16%. The gains are concentrated in duplexes, townhouses, and accessory dwelling units, while larger multifamily permits remain softer.

Applications are distributed across the city, with the highest unit density in the Eastside (25%), West End (21%), and South End (18%). Brian Boudet, interim assistant director of Tacoma’s Planning and Development Services, said the city is seeing encouraging early signs while acknowledging that larger projects continue to face the toughest development economics. Tacoma expects to add 45,000 households by 2040.

Why It Matters: Tacoma’s data offers the clearest real-world evidence yet that middle housing zoning reform produces measurable results when implemented at scale. For investors tracking the South Sound market, the 62% increase in units signals meaningful latent demand in the duplex and ADU segments—and early-mover advantages may exist before larger institutional capital takes notice.

The Urbanist, June 19, 2026: (The Urbanist)

Op-Ed: To Save Seattle’s Mandatory Housing Affordability, We Have to Recalibrate It

Patience Malaba of the Housing Development Consortium wrote in The Urbanist this week that Seattle’s MHA program must be temporarily restructured to restart a stalled development pipeline—and that doing nothing is not a neutral choice.

In 2025, fewer than 4,000 homes entered Seattle’s permitting pipeline, roughly a third of the 2018-2021 pace. MHA revenue peaked at $83.3 million in 2022 but is on pace for just $19.6 million in 2026, with only $3.8 million collected through May. More than 70 projects are stalled in permitting, representing about 6,700 homes, unable to move because they cannot meet investor return thresholds under current fees. The proposal on the table — a two-year MHA Accelerator — would cut fees by 80% for multifamily projects and 90% for townhomes and projects under 30 units, with a requirement that projects begin construction within the window to qualify. Malaba argues the reduced fee structure, applied to the 35 stalled projects the Seattle Housing Roundtable has identified, would generate roughly $24 million in MHA revenue in year one—more than the frozen status quo.

Why It Matters: Seattle’s MHA debate is a real-time test of whether inclusionary zoning programs can adapt to deteriorating development economics without losing the political support that sustains them. If the Accelerator passes and works, it will serve as a model for every Pacific Northwest city running a similar program. If it stalls, expect Seattle’s housing production freeze to deepen in 2027 and 2028.

The Urbanist, June 12, 2026: (The Urbanist — Opinion)

Spokane and Tacoma Among Most Sought-After Cities for Renters in 2026

RentCafe’s annual ranking of the 30 most sought-after U.S. rental markets placed both Spokane and Tacoma on the national list. Spokane ranked No. 5, reaching the second-highest page-view ranking in the country during the second quarter, with search traffic driven heavily by renters relocating from Seattle, San Jose, and other high-cost western metros.

RentCafe attributed Spokane’s appeal to its relative affordability, growing employment in healthcare and education, and access to outdoor recreation. Average rent in Spokane as of mid-June was $1,435 per month across all property types, down year over year.

Tacoma’s ranking reflects similar demand dynamics, with cost-conscious renters seeking affordability within the commuting range of Seattle.

Why It Matters: High search-driven demand from other Western markets is a leading indicator of sustained in-migration into both Spokane and Tacoma—the demographic fuel that supports long-term rent recovery and occupancy resilience. For investors, strong renter interest despite modest rents and declining costs suggests these markets are absorbing supply without losing their attractiveness to prospective tenants.

Washington State Standard, June 17, 2026

Not Squatters: Temple Theatre Renters Didn’t Know Apartments Were Illegal — Tacoma

A rooftop electrical fire at Tacoma’s historic Temple Theatre on 12 May led city investigators to discover at least three residents renting unpermitted apartments inside the venue—residents who believed they were in legitimate leases. One tenant had lived in the building for more than a year, paying $1,600 per month in cash with no copy of a lease.

A second tenant signed a lease on 18 April, paid a $4,000 deposit and $1,700 in monthly rent, and also received no copy of the lease. The city issued a Do Not Occupy order on 11 June, requiring the landlord to provide relocation assistance within seven days. Landlord Lawrence Boileau had not responded to media inquiries as of press time, and at least one tenant remained in the building without receiving relocation funds.

Why It Matters: For licensed, compliant property managers in Tacoma, this story is a reminder that the informal rental market creates real housing insecurity—and a real competitive argument for professionally managed, permitted housing. Tenants displaced by situations like this immediately demand compliant units in the same neighborhoods.

The News Tribune, June 17, 2026

Washington Tax Collections Running Below Forecast as Economy Softens

A Washington Policy Center analysis found that state General Fund collections for the May 11-June 10 period came in $103.6 million, or 2.4%, below the February forecast—and are now $135.4 million behind forecast cumulatively since February.

Real estate excise tax collections missed by $21.7 million, or 19.2%, as high-value transactions pulled back. State employment fell 3,800 since the February forecast against a projected gain of 3,600. The unemployment rate reached 5.2% in April, up from a recent low of 4.3% in December 2023. Seattle-area inflation hit 4.9% year-over-year through April—well above the 3.8% national rate—with energy costs up 23.7%.

The Office of Financial Management has already directed agencies to prepare for budget shortfalls in the 2027-29 biennium.

Why It Matters: A 19.2% miss on real estate excise tax collections signals that high-value transactions across Washington state are slowing—directly affecting the multifamily investment sales market. Rising unemployment and above-average inflation compound the headwinds facing tenants’ ability to absorb future rent increases, a factor that should inform underwriting assumptions for the balance of 2026 and into 2027.

Washington Policy Center, June 16, 2026

Is It a Renter’s Market? It Depends on Where You Live

An NPR/OPB investigation found that national rent is rising more slowly than wages and inflation—up just 1.9% year-over-year in April per Zillow, compared to 4.2% consumer price inflation in May—and a record 39.8% of Zillow listings offered move-in incentives in April.

Realtor.com data showed rents actually fell 1.5% nationally year-over-year. The national apartment construction boom, roughly 600,000 units delivered in 2024, the most in 38 years, pushed the rental vacancy rate to 7.3% at the start of the year. However, conditions vary significantly by market. Sun Belt cities with heavy new supply are competing aggressively on concessions, while constrained markets are holding firmer on rents.

Why It Matters: Washington state markets sit between those two poles—not oversupplied like Austin or Phoenix, but not immune to national rent softness. Owners should be tracking their specific submarket conditions closely rather than relying on national headlines, which mask significant local variation that affects every lease renewal and retention decision you are making right now.

OPB/NPR, June 16, 2026: (Oregon Public Broadcasting)

NATIONAL AND FEDERAL

Congress Poised to Send Major Housing Package to Trump’s Desk

Congressional leaders announced a bipartisan agreement on the 21st Century ROAD to Housing Act—described by Sen. Elizabeth Warren as the biggest housing bill in more than 30 years. The Senate was set to vote Monday evening, with the House expected to follow. The bill targets regulatory costs, which a National Association of Home Builders study found now account for 26.4 percent of the final price of a new single-family home — or $131,734 on a $499,500 home. Key provisions include a seven-year housing supply innovation fund, pilot programs for regional planning and vacant-building conversion, HUD zoning best-practice guidance, and a ban on companies that control 350 or more single-family homes from making additional purchases. The provision requiring institutional investors to sell existing units within seven years was removed from the final agreement.

Why It Matters: Federal action targeting regulatory costs — historically among the biggest barriers to new construction — could begin to shift the development economics that are freezing pipelines in Washington state and across the region. The institutional investor purchase restrictions, while modest in direct market impact, may also redirect some capital toward multifamily as single-family acquisition strategies are constrained.

The Washington Times, June 20, 2026

Multifamily Starts Plunge in May

The U.S. Census Bureau‘s May report showed multifamily housing starts in buildings with five or more units collapsed to 284,000 annualized units—down 41.6% from April and 12.3 percent below year-earlier levels, putting starts 32.8% below their trailing 12-month average. Permits held steadier at 474,000 annualized units, down 3.5% from April but up 3.0% year-over-year. Completions came in at 426,000 annualized units, down 19.3% from April. The West region saw permit issuance essentially flat on a three-month moving average basis. Units under construction nationally fell to 662,000, down 8.1% year-over-year.

Why It Matters: A 41.6% single-month start decline is a stark signal that the national supply wave is cresting. Fewer starts today mean fewer deliveries in 2027 and 2028 — which suggests the current environment of elevated concessions and softer rents in Washington markets is likely nearing its end, though most owners may not realize it. Investors who can underwrite near-term softness may be acquiring in the early stages of a supply-constrained recovery.

Yield Pro, June 16, 2026

Spokane Named One of Top 10 Emerging Multifamily Markets of 2026

Multi-Housing News, using Yardi Matrix data, placed the City of Spokane among the top 10 emerging U.S. multifamily markets of 2026 — the only Pacific Northwest market on the list.

The ranking covered metros with populations under 1 million across employment growth, deliveries, pipeline, occupancy, and investment metrics. Spokane’s occupancy held at 94.6% in December, the third-highest in the peer group and above the national average of 94.4%. The under-construction pipeline measured 4,423 units, the third-largest in the set.

Investment volume reached $108.4 million, with per-unit pricing averaging $186,652 and price per unit growing 22.8% year-over-year—well above the 5.2% national average. Healthcare, education, public-sector employment, and military-adjacent economic activity anchor Spokane’s fundamentals.

Why It Matters: National recognition from a Yardi Matrix-sourced ranking elevates Spokane’s profile among out-of-state institutional and private capital looking to diversify into secondary Pacific Northwest markets. For current Spokane owners, this kind of visibility can support cap rate compression and valuation in a disposition conversation—it is a data point worth having in your marketing materials.

Multi-Housing News, March 4, 2026

84% of Operators Have Seen Faked Pay Stubs — Burnt Screening Launches at Apartmentalize

A National Multifamily Housing Council survey found 84.3% of apartment operators have encountered falsified pay stubs, employment references, or other income documentation.

At the National Apartment Association (Naahq)‘s Apartmentalize conference, a company called Burnt launched a tenant screening platform built on Relay data infrastructure that verifies applicant identity, income, and employment directly from source systems—rather than relying on uploaded documents that can be altered in minutes. The platform integrates credit, eviction, background, and application data in a single workflow and applies screening rules consistently as rental regulations evolve.

Why It Matters: Application fraud is a material risk in Washington state’s current environment, where the financial consequences of a bad tenancy have grown sharply under HB 1217 and Spokane’s new eviction ordinance. Tools that verify income at the source rather than relying on uploaded documents represent a meaningful reduction in operational risk. Owners: It’s worth a conversation with your property management teams about current screening practices.

GlobeNewswire via Yahoo Finance, June 18, 2026: (GlobeNewswire)

Questions about how this week’s news affects your Washington state portfolio or your next transaction? Call HFO Investment Real Estate at (503) 241-5541 and speak with a broker.

HFO Investment Real Estate is Oregon and SW Washington’s leading multifamily-only brokerage, ranked No. 1 by transaction volume for more than 10 consecutive years.

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