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One of the largest home building associations in America has released a report detailing the rising costs of home construction in Washington state, blaming onerous government regulations for higher prices.
The Building Industry Association of Washington, in partnership with the Washington Center for Housing Studies, examined the costs associated with single-family homes and townhomes, focusing on bureaucratic impediments and market conditions.
Key findings from the “Cost of Constructing New Homes in Washington State (2024)” report, released on Monday, paint an expensive picture.
According to the report, the average cost to build a single-family detached home in the Evergreen State is $309 per square foot, with a median sales price of $690,701 for a 2,505-square-foot home. The cost to build an average single-family home of a similar size in the U.S. is $428,215, according to the latest study from the National Association of Home Builders.
The report states that townhome construction averages $404 per square foot and has a median sales price of $592,195. The median cost to acquire raw land in key counties in Washington is $286,996 per lot. Regulatory costs imposed by local, state, and federal governments account for 23.8% of the final home price, per the report, totaling an estimated $164,386 per new home.
“Washington families are struggling to afford homeownership due to rising construction costs and burdensome regulations,” BIAW President Kent Arola said in a news release. “We need smart policies that encourage housing development while keeping costs manageable.”
The report calls for the passage of housing affordability bills currently being considered by the Legislature, including Senate Bill 5184 to modernize parking regulations, House Bill 1096 to allow for administrative lot splitting to open up more buildable land, and Senate Bill 5729 to allow a licensed and insured design professional stamp to represent a complete permit application to speed up permit approval timelines.
BIAW’s report broadly reflects the general take of the private and public sectors regarding Washington’s housing challenge.
According to the National Low Income Housing Coalition, there is a shortage of nearly 172,000 affordable and available rental homes for extremely low-income renters in Washington.
In 2023, the Washington State Department of Commerce released its final housing needs projections, showing the state needs to add 1.1 million homes over the next two decades, and that more than half of them need to be affordable for the lowest-income residents.