Affordable Housing Vacancy Similar to Citywide Average

Reports in the last year have stated that thousands of affordable apartments in Seattle sit empty amid a homelessness crisis. However, the vacancy rate in buildings funded by the Seattle Office of Housing is similar to the city average, and most vacant units are in the process of being cleaned and repaired for the next tenant. We are addressing vacancies by providing different types of funding and closely monitoring progress. We have provided funding to help lower rents in places where competition in the housing market is causing more vacancies, and funding for urgent operating stabilization and ongoing operations. We are also responding to community priorities and working with other City agencies to reduce homelessness by investing in supportive housing buildings, staff, and operations.

Six organizations own and operate 51% of our affordable housing portfolio. Their vacancy rates for 2025 were similar to the private market. In 2025, the average vacancy rate for City-funded buildings operated by the six largest affordable housing providers was 5.1%. For the private market, it was 5.9%.

Vacancies usually happen when residents move out and reflect the time needed to prepare an apartment for a new resident. Residents who leave after several years or apartments with serious damage may need more extensive repairs, cleaning, and preparation. This can lead to longer periods of vacancy. We are providing funding for operations, maintenance, and services, which will help affordable housing providers clean and prepare units for new residents faster.

Increased Production of Smaller Apartments

The recent increase in supply of smaller apartments and the Seattle metro area’s high incomes are other factors for vacancies in the private market and in affordable housing.

For years, there was an emphasis on building as many affordable homes as possible. Studio and 1-bedroom apartments are cheaper to build and take up less space than 2- or 3-bedroom apartments. The private market and affordable housing buildings developed more studio and 1-bedroom apartments than any other unit size. Private market rents for these units didn’t increase as quickly, since there were so many.

In 2010, there were 18,894 studios and in 2024, there were 55,802 studios, an increase of 195%. In 2010, there were 14,226 3-bedroom apartments and in 2024, there were 15,725 3-bedroom apartments, an increase of only 11%.

High Area Median Income (AMI) Leads to High Income-Restricted Rents

While more smaller apartments were being built and private market rents remained relatively stable, the Seattle metro area became wealthier and income-restricted rents increased. Area Median Income (AMI) is the calculated median family income of renters and homeowners within an area. The US Department of Housing and Urban Development (HUD) sets Seattle’s AMI annually based on median family incomes in King and Snohomish counties and does not separate incomes for homeowners or renters. Homeowners make much more than renters, and Seattle’s AMI rapidly increased due to growth in the highest 20% of incomes.

According to the American Community Survey, in 2010, the average homeowner income was $95,655 and the average renter income was $40,010. This is a difference of $55,645. In 2024, the average homeowner income was $200,315 and the average renter income $87,642. This is a difference of $112,673 and nearly double the difference in 2010.

Why Income-Restricted and Private Market Rents are so Similar

Affordable rental housing typically serves households that make between 0-60% AMI, with many units serving households making between 50-60% AMI. No US city has an adequate supply of affordable and available homes for renters with extremely low incomes, or households that make between 0-30% AMI. This is the greatest need, and we have been updating investment priorities to focus more on this type of housing.

Examples of Households with Different Area Median Incomes (AMIs)

Examples of households who have extremely low incomes at 30% AMI are:

• A childcare worker with a child who earns $37,000 a year.
• Someone who is unemployed.
• A family of four where one person earns $31,000 a year as a physical therapy aid and a second person earns $16,000 a year as a part-time retail worker.

Examples of households who have very low incomes at 50% AMI are:

• A substitute teacher with a child who earns $59,000 a year.
• A family of four where one person earns $32,000 a year as a cashier and a second person earns $45,000 a year as a veterinary assistant.

Examples of households who have a low incomes at 80% AMI are:

• A transit driver with a child who earns $77,000 a year.
• A retired couple with an annual income of $95,000.
• A family of four where one person earns $52,000 a year as a nursing assistant and a second person earns $65,000 a year as a construction worker.

There is not enough housing for households with low-incomes in Seattle. Approximately 39,000 households have incomes under 30% AMI and there are only 18,600 available and affordable units. This means only half of these households have access to housing that is affordable to them. The other half are likely paying more than 30% of their income to housing and are rent burdened. In contrast, there are approximately 25,600 households at 50-80% AMI and 62,900 available and affordable units. This is more than double the number of households.

Private market apartments can charge any amount for rent, but affordable housing uses ‘income-restricted rents’ which are set by HUD and are based on AMI. The Seattle region’s recent increase in wealthy homeowners raised Seattle’s AMI, which also raised income-restricted rents in affordable housing.

In private market buildings, smaller apartment rents did not increase as much because there were so many of them. Currently, studio and 1-bedroom private market units serve households at 60-70% AMI. This means households that qualify for affordable housing can also find affordable rents in the private market. Private market units can be more appealing if they are in newer buildings, are bigger, and have amenities like in-unit laundry. This has contributed to recent vacancies in affordable housing buildings.

Investing in the Long-Term Sustainability of Affordable Housing

We are taking direct action to solve deeper issues in homelessness and ensure affordable housing units do not sit empty. We are investing heavily to support the people who provide affordable housing so they can keep their doors open and get people moved in faster.

To keep buildings running smoothly, we provided housing operators with $14 million in funding in 2024, followed by another $28 million in urgent funding in 2025. This money pays for essential daily operations, building maintenance, and resident services. By covering these basic needs, we help housing providers keep their buildings in good shape and fill vacant apartments much more quickly.

In 2025, we also updated our main rental housing funding program, known as the Notice of Funding Availability. Through this funding, we dedicated $91 million to help existing affordable housing buildings with capital stabilization and debt restructuring. This ensures these critical buildings remain open and well-maintained for years to come.

We also changed the rules for any new housing developments we fund. Now, new buildings must include more family-sized homes with two or more bedrooms. They must also set aside more apartments specifically for people with the lowest incomes. Because the private market already builds plenty of smaller apartments for middle-income earners, we are shifting our focus to serve the individuals and families who need help the most.

Going forward, we will keep reviewing our funding policies to make sure we are doing everything we can to serve Seattle residents who rely on affordable housing.