PSBJ: Downtown Seattle tops peer cities for residential construction — for now

This article was originally published by The Puget Sound Business Journal on Jan. 6, 2025.

By Marc Stiles

The perception is few people want to live in downtown Seattle. New numbers tell a different story.

Among 10 U.S. peer cities, downtown Seattle and the neighborhoods that ring it have the most residential units (over 4,000) under construction. This is according to the 2024 Development Guide that the Downtown Seattle Association released last week.

This building boom, however, is fading, with just 11 permit applications for both commercial and residential projects made last year. The residential projects have only 346 residential units in total.

That’s a sharp decline from recent years. Permit applications for residential and commercial permits topped out at 101 in 2016, and the annual average over the last 15 years was nearly 52 projects.

Another new report, this one from Colliers‘ Seattle office, states no “general office projects” are under construction locally.

It’s part of what the Colliers report calls “a clear turning point” for the Seattle office market: The fourth quarter saw the smallest increase in vacancy since 2019 as well as the first quarter-over-quarter rent increase in a year.

The population of DSA’s coverage area grew by nearly 2,400 to over 108,000, the association reported.

Those moving in likely are younger men and more diverse compared with the rest of Seattle households, according to DSA, which cited U.S. Census estimates from Esri Community Analyst. Esri is a geographic information software company.

Forty-seven percent of new residents citywide were in DSA’s coverage area, which includes Uptown/Lower Queen Anne and South Lake Union, south through Sodo. The area extends from the waterfront east to Broadway.

This area’s median age declined to 34 years from 2023 to 2024, while the share of residents ages 25-34 increased nearly 14 percentage last year; the share of male downtown residents increased nearly 4 percentage points to an estimated 57% of downtown’s residential population.

Downtown ranks third among the peer cities in number of real estate projects under construction, trailing Denver and Los Angeles. With 16 projects completed in 2024, Seattle trailed Denver’s 29 but was ahead of Chicago’s 15. Other peers are Atlanta; Portland; Austin, Texas; Salt Lake City; Boston; and San Francisco.

“The confidence investors have in our downtown is evident, and the steady growth in residential development and some continued investment in commercial projects shows the strength of our city as an economic and cultural hub,” DSA President and CEO Jon Scholes said in a news release.

Of the 16 projects delivered in DSA’s coverage area last year, nearly three-quarters were residential. The newly completed residential projects included nearly 2,000 units and almost 300 additional hotel rooms.

Looking at the pipeline further out, including proposed projects and those in final planning stages, there are over 15,500 residential units, 1,569 hotel rooms and 10.6 million square feet of commercial space, DSA reported.