Leaders in the Pacific Northwest are largely bullish on the region’s continued economic success — but one threat to the region’s fiscal progress worries them in particular.
“What always strikes me, whether I’m in City Hall in Vancouver or Seattle or Portland, is that everybody talks about the same thing — the high cost of housing,” said Microsoft President Brad Smith at this week’s Cascadia Innovation Corridor conference in Seattle.
“It’s become an enormous barrier, not just for attracting new talent, but for enabling teachers and police officers and nurses and firefighters to live in the communities in which they serve,” he added.
Dr. Tom Lynch, president and director of Seattle’s Fred Hutch Cancer Center, was more succinct.
“My people can’t find places to live,” Lynch said during a Tuesday panel at the same event.
Those concerns are bolstered by research in a new report on the economic viability of the corridor running from Vancouver, B.C., through Seattle to Portland.
Housing costs were cited as one of the top threats to the region’s success, noting that Vancouver’s housing-cost-to-income-ratio disparity is among the worst in the world, while in Seattle median home prices relative to wages have doubled in the past 15 years. Portland reports a net out-migration as workers move to more affordable areas.
Other concerns include rising business costs and regulations, declining numbers of skilled workers and new restrictions on foreign talent immigrating to the U.S., and clean energy shortages.
“We’ve got to find ways to be able to increase the density of our housing, come up with creative solutions for allowing more families to be able to live close to where the jobs are,” Lynch said.
Smith agreed, adding, “The only way to dig ourselves out of this is to harness the power of the market through public-private partnerships, to recognize that zoning and permitting needs to be put to work to accelerate investment.”
Area tech giants have been pursuing those partnerships to tackle the challenge.
In 2019, Microsoft pledged $750 million to boost the affordable housing inventory and has helped build or retain 12,000 units in the region. Amazon in recent years has committed $3.4 billion for housing across three hubs nationally where it has large operations. The company in September celebrated a milestone of building or preserving 10,000 units in the Seattle area.
Despite the efforts, Smith said the shortage keeps worsening and in 2025, new construction starts are expected to be the lowest since before the Great Recession.
The city of Seattle, for one, is looking to sweeten a property-tax exemption deal for developers that could encourage construction and it’s also applying AI to permitting process in an effort to speed up projects.
Smith also promoted the long-held vision of a high-speed rail line in the Pacific Northwest that would make commutes much faster between growing urban hubs. But a panel Wednesday cautioned that dream is still many years out.
