Part 4/10:
Policy and Regulation: A Double-Edged Sword
The regulatory environment in Washington state and Seattle, in particular, has created additional headwinds. Rent control measures, bureaucratic permitting layers, and other red tape have made it more expensive and cumbersome to develop new housing. For example, local governments permitted fewer multifamily units in 2024 than in any year over the past decade.
Furthermore, recent policies like rent increase caps—implementing restrictions and fines on landlords—aim to protect tenants but inadvertently discourage new investment. Landlords, faced with regulatory caps and potentially punitive fines, are less inclined to maintain or expand rental inventories, further constricting supply.