The headline was like a punch in the gut to many dreaming of owning or renting a home in the Seattle area. “Bellevue home sells for nearly $1 million over list price.”
For buyers with cash to spare, the BridleTrails home had everything — from heated floors and a swanky wet bar to custom cabinets and a three-car garage. Perhaps more importantly, the house is located just a few miles from Microsoft’s Redmond campus as well as the Spring District in Bellevue, where Facebook parent Meta Platforms is expanding its corporate footprint. And it’s near downtown Bellevue, where Amazon is building multiple skyscrapers and plans to employ 25,000 people.
Some have shrugged the price off as a sign of the times, as bidding wars sparked in part by the region’s booming tech economy drive home prices steadily upward in the face of low inventory and high demand.
But for others, it was yet another reminder that housing in the Seattle area is becoming increasingly out of reach, especially for low and middle-income families seeking a home with enough space for everyone.
Then, a few days later, another headline reinforced the growing disparity: “Amazon more than doubles max base pay to $350k.”
It begs the question — is Seattle becoming a synonym for San Jose, where all but top-dollar buyers have been squeezed out? Is Redmond now Cupertino, and is Bellevue the new Mountain View?
Low-income-housing developer Ben Maritz says that Silicon Valley — where tech-job salaries increased without any cap and housing inventory couldn’t keep up with demand — has long been a damning harbinger of what might be for Seattle.
“If we’re not careful here, things could get worse,” said Maritz.
Before starting the development company Great Expectations, Maritz co-authored a 2020 McKinsey report on homelessness that made waves in Seattle and beyond. The report estimated that fixing Seattle’s homeless crisis would cost over $1 billion, and that Seattle tech companies should share some of that load.
“It is clear that business bears some of the responsibility for the homelessness crisis,” the report stated. “With continued success comes renewed responsibility to employees and communities.”
Microsoft and Amazon seem to agree with that sentiment, earmarking billions for solving the housing crisis. The companies have joined coalitions, created housing initiatives and made grants available for the development of affordable units throughout the region and beyond. But so far, the results haven’t been enough to narrow the divide between those who can afford a home and those who can’t.
Maritz said ultimately it’s a question of supply, and he’d like to see governments think differently about welcoming those sought-after tech jobs into their cities.
“Before they agree to put a job in any one of our cities, they should make sure the city council is committed to adding housing in a number significantly greater than the jobs they are adding,” he said. “It has to come down to government.”
One thing many politicians, advocates and techies seem to agree on: The region needs more housing — especially affordable housing — badly. But when it comes to where that housing should be built and who should be in charge of making sure it gets done, things get a little more divisive.
‘No time to wait’
Last week, at a House legislative hearing in Olympia, Wash., elected officials and housing advocates from around the state weighed in on a proposal that would create more so-called middle housing — multi-family or clustered homes such as townhouses — near transit centers in cities across the state.
Some, including Kirkland planning commission chair Angela Rozmyn, argued in favor of the proposal. Rozmyn testified that Kirkland recently adopted similar housing regulations, and that state officials should act now to force cities to move more aggressively — before more land is developed with low-density housing that only the wealthiest residents can afford.
“We don’t have time to wait anymore,” Rozmyn said. “If something was going to happen in local zoning and local control, it would have happened already.”
But several Puget Sound mayors logged onto the online hearing to say they were already supporting middle housing, or that land zoned for that type of structure isn’t being snapped up by developers.
“Forcing through an unrealistic mandate is only going to cause more slowdowns, more confusion, and will not achieve what you hope,” said Auburn Mayor Nancy Backus.
Amazon officials have expressed support for legislative efforts to create denser housing in areas with public transit.
“Funding is one part of the equation to solve housing issues, which is why Amazon and other large businesses like Microsoft are stepping forward with support,” company executives wrote in a statement earlier this year. But it’s not just about money; it’s also about government cultivating the policy environment to create more housing choices, especially near transit.”
So, how does a higher base pay cap at Amazon factor into the housing market? Maybe not quite as much as you’d think, according to Scott Hotes, a broker and vice president with Skyline Properties. He said larger starting salaries will undoubtedly make it easier for Amazon engineers to buy homes, but with a little legwork, Amazon workers were already able to qualify for loans based on deferred compensation.
Hotes added that Seattle has enough top employers that one company’s actions don’t cause as big of a ripple as you might think.
“We are so diversitied,” he said. “That’s one of the coolest things about the Seattle area. We have medicine, tech, great universities — the industries we have here are so diverse, we’re not dependent on what Amazon does.”
But there’s no denying that the region’s tech industry has drastically altered the real estate market over the last few decades, and advocates for low and middle-income housing have been scrambling to find solutions.
“Homelessness is caused by a lack of affordable housing, and the solution to homelessness requires the creation of inclusive and deeply affordable housing,” said Anne Martens with the King County Regional Homelessness Authority.
Maritz said affordable studio and one-bedroom units have been developed much more quickly than housing that can accomodate families, and that’s where efforts should focus.
“The median worker can afford a studio apartment, but they can’t afford a family home, and that’s really a big problem,” he said.
But supply has to match demand, otherwise cash-rich bidding wars will continue to drive up home prices, like with the Bridle Trails home in Bellevue.
“That only happens when you have people who have an extra million dollars to throw at a house,” Maritz said.