By Sarah Clark, Director of Policy  

With affordability concerns from residents and employers rising, lawmakers across the region have continued to move aggressively on housing policy reform in 2026. Both the State Legislature and the City of Seattle have advanced policies intended to unlock new housing supply at a higher scale.  Over the past six months, lawmakers have passed several consequential bills, advanced zoning updates, and implemented new tools, hoping to increase production. However, some policies and implementation challenges continue to constrain progress.   

State-Level Progress: Unlocking Additional Housing Supply  

Several important bills were passed during the 2026 short session that will make it easier for developers to build the new housing supply we need, including several supported by the Seattle Metro Chamber, by advancing major permitting, zoning, and land-use reforms.   

  • SB 6026 – Opening Commercial & Mixed-use Zones for Housing: This bill, now delivered to the Governor, removes local ground-floor commercial mandates, enabling residential development in commercial and mixed-use zones and increasing the amount of available land where housing can be built (in cities with at least 30,000 residents).   
  • HB 2418 – Permitting Reform: This bill addresses several barriers to the timely issuance of permits, including a reduction in time and cost. If these policy changes are successful, these reforms will remove one of the largest delays in housing delivery.   
  • HB 2304 – Condo Liability Reform: This bill updates condo liability rules for stacked flat condos, unlocking a key “missing middle” ownership option traditionally suppressed by litigation risk.   
  • HB 2266 – Removing Zoning Barriers to Permanent Supportive Housing: This bill preempts local zoning restrictions to ensure Permanent Supportive Housing (PSH) and emergency housing cannot be treated differently than other housing types.   
  • HB 1974 – Coordinated Land Banking: This bill will help land move more quickly to entities ready to build, by reducing one of the largest supply bottlenecks—site control.   

 

City-Level Progress: Unlocking New Building Capacity  

Seattle is amid the most significant land use update in decades. At the end of last year, Seattle leaders passed the “phase one legislation” updating the city’s Comprehensive Plan. This update, done once every decade, marked the largest increase in building capacity in our city’s history. This update also aligned Seattle with HB 1110 by allowing middle housing citywide—duplexes, townhomes, stacked flats, and cottage housing—with a minimum of four units on all residential lots and six near transit.  

This year, Mayor Wilson will have a chance to make her mark on the Comprehensive plan as her administration takes up phase 2; the Centers and Corridors legislation. Mayor Wilson’s zoning package (introduced in January), proposed 30 new Neighborhood Centers, expanded Urban Centers, and allowed more housing to be built near transit, retail, and essential services. This directly increases the capacity for multi-family housing (much needed throughout the region) and mixed-use development. Your Seattle Metro Chamber staff will continue to work with the Complete Communities Coalition and the Wilson Administration to find ways to unlock additional housing capacity.   

Mayor Wilson has also been bullish on expanding temporary shelter capacity to get people off the street. On January 15, Wilson issued Executive Order 2026-02 to accelerate the development of emergency housing and shelter across Seattle. The order created a Housing & Shelter Accelerator, an interdepartmental team tasked with identifying financial incentives, permitting changes, and policy adjustments, as well as evaluating city-owned and underutilized land for housing and shelter development.  

On March 4, the mayor transmitted a package of legislation to City Council aimed at rapidly expanding shelter capacity, intending to open 500 new shelter and emergency housing units this year, and another 1,000 by the end of 2027. Her proposal focuses on reducing development timelines through:  

  • Streamlining site acquisition: Allowing faster lease agreements for new shelter locations 
  • Expanding capacity: Increasing limits from 100 to 150 people per site, with flexibility for one larger site per district 
  • Deploying existing resources: Allocating approximately $4.8 million in underutilized city funds to support shelter expansion and wraparound services. Together, these actions are intended to bring more people indoors faster, while reducing administrative delays in opening new shelter sites. 

The city and state have made meaningful progress in expanding the land, tools, and flexibility needed to build more homes, and the Seattle Metro Chamber applauds policymakers who have advanced reforms that support our region’s economic health and help employers attract and retain talent.  

Despite progress made, the picture is not unambiguously positive - several state and local policies continue to impede housing delivery. Implementation delays, local regulatory discretion, rural ADU limits, and policies affecting affordable housing providers continue to create pressure points that could blunt the impact of recent reforms.  

Washington’s 2025 Annual Housing Progress Report shows housing permits declined in 2023–2024 due to rising construction costs and high interest rates—an ongoing headwind even as policies are passed attempting to accelerate supply. For the employer community, workforce planners, and employers across the region, the next year will be decisive. Ensuring that policymakers stay focused on enabling production—and removing barriers —will be essential to meeting the region’s housing needs and supporting a thriving economic climate.   

Why This Matters for Seattle’s Business Community  

Housing availability continues to play a significant role in the region’s economic outlook. Limited supply contributes to higher housing costs, which can affect workforce availability, business expansion decisions, and long-term competitiveness. It remains one of the biggest economic challenges facing employers and workers in our region.   

Recent policy changes at both the city and state levels reflect a continued focus on increasing housing supply and reducing barriers to development. As these policies are implemented, the pace, predictability, and cost of development will be key factors in determining how quickly new housing can be delivered.  

The Seattle Metro Chamber will continue to collaborate with policymakers, employers, and community partners to advocate for meaningful increases in housing options throughout the region.