Seattle’s real estate market is experience unprecedented growth driven by an explosive tech sector, but the city also is facing significant challenges due to the fallout from that growth ― including labor shortages, income disparity and housing-affordability issues ― that must be addressed with vision if the benefits of economic expansion are to be shared equitably.
That is the major takeaway from a breakfast panel discussion held Friday morning, Dec. 13, focused on the state of commercial real estate and construction in Seattle ― produced and hosted by the Downtown Seattle Association and Schwabe, Williamson & Wyatt. Following are some excerpts from the panelists’ presentations.
Sam Assefa, director of Seattle’s Office of Planning & Community Development: “We’re still experiencing significant growth in the city. As enviable as that growth is, it is equally significant the amount of challenges we face in terms of equity, displacement and affordability. We are not all enjoying the benefits of the economic growth.
Kristin Ryan, partner with real estate development and consulting firm Barrientos Ryan: “One of the biggest constraints we face in terms of multifamily development is regulatory challenges. We have huge challenges because of the speed of growth in the city, and it’s hard for any system to expand at the speed needed [under those conditions.] Our goal, though, should be to lift everyone with this growth.
Pat Callahan, founder and chief executive officer of the commercial real estate firm Urban Renaissance Group: “Economic growth in the tech sector has led to unprecedented demand for office space. No other market is experiencing what we are. Based on current commitments, the Big 5 – Amazon, Google, Facebook, Microsoft and Apple ― will occupy 32% of all office space in the market in the next five years. We’ve never seen demand outstrip supply like this.
Jobs and Income
Kris Beason, vice president of construction-services firm HITT Seattle: “We need more [construction] workers if we are to continue this growth. We need to support organizations doing outreach to bring people into the [construction] trades. We are competing for talent and need to look outside the normal boxes to fill the gap.
Assefa: “The gap between middle-income and the very wealthy is growing faster in Seattle than anywhere in the U.S., except San Jose and San Francisco. Tech jobs here have grown 175% since the Great Recession … and [per Zillow, for every 2 percentage point increase in spending on rent, an estimated] 33 people become homeless in Seattle. The big threat is this income disparity and inequality.
“But we also have significant opportunities, and the mayor is committed to addressing the missing middle in the city and advancing middle-wage jobs. There are now 105,000 jobs in the industrial and maritime industries in this market, for example, and two-thirds of those do not require college. We need to figure out how to build on that.”