If you thought that regional growth might be petering out, you’d be wrong. Recent data from the Puget Sound Regional Council (PSRC) shows that job growth remains strong throughout the Sound. In January, 4,500 new jobs were added to the employment rolls at a pace of about 145 new jobs per day. Regional employment growth has been relatively consistent and healthy since 2010, leading the unemployment rate to drop from a high of 9.1% to the current low of 4.9%.

In the six-year timeframe from January 2010 to January 2016, the PSRC found that the regional economy had netted 269,600 jobs, with the lion’s share of those going to locations in King County and Snohomish County. The added jobs have led the region from a low of 1.74 million to a new high of 2 million jobs. The PSRC also took a look at two snapshots in time between January 2014 and January 2016, and what they found was accelerating job growth. In the January 2014 to January 2015 time period, 54,600 jobs were added while in the January 2015 to January 2016 time period, 58,000 jobs were added — a rate increase of 3,400 more jobs and 6% higher than the year prior. According to the PSRC, the 2015-2016 time period saw an overall annual job growth rate of 3% and a monthly employment rate of more than 4,800 jobs.

A snapshot of regional employment from January 2010 to January 2016. (Puget Sound Regional Council)
A snapshot of regional employment from January 2010 to January 2016. (Puget Sound Regional Council)

New jobs are undoubtedly a good thing. As people become employed, they are better able to support their lifestyles, feel personal satisfaction, and contribute to their communities. But new jobs also create new demands of their own; perhaps the biggest of those are on transportation systems and housing. Fortunately, many of the newly employed within the region are choosing active transportation and transit over driving, alleviating some congestion that might otherwise end up on local roads. On the housing side of things, the local economy is delivering a substantial number of new units every month, but the data suggests that the building industry isn’t entirely keeping up with demand. And that’s not exactly surprising.

Based upon permit issuance data from the US Census Bureau, 25,885 dwelling units, of varying types, were approved for construction in the region during the 2015 calendar year. This suggests that about 2,150 dwelling units were being permitted monthly over the course of 2015. The numbers do deserve some scrutiny since they only account for building permits issued for privately-owned structures, not finaled building permits and constructed units. And, they do not discount the demolition and removal of existing housing stock from the annual counts. Unfortunately, more precise and current data from the PSRC is not available, but based upon comparison of prior years, the two data sources only appear to disagree by plus or minus 2,000 units annually — admittedly, not an inconsequential difference. But regardless, this pace of home-building — or home-permitting as it were — does matter in concert with employment growth.

Jobs to housing ratios for the years from 2002 to 2009 in the Puget Sound. (King County)
Jobs-to-housing ratios for the years from 2002 to 2009 in the Puget Sound. (King County)

Historic data from the 2000s suggests that the region has traditionally had a jobs-to-housing ratio of about 1.14. In King County, that ratio is substantially higher at 1.39, due in large part for its remarkable draw for talent and business to its very large and active employment centers. This ratio matters because as employment grows, so does the demand for housing — almost in parallel with each other. And what’s particularly interesting about the ratio is that it really hasn’t changed over time, even through boom times.

All things being equal, a rough calculation would suggest that we should be producing at least 4,200 dwelling units monthly to keep up with the pace of added employment. We aren’t seeing that, regionally-speaking, which likely means that demand for housing will continue to outpace the supply. For renters and homeowners alike, that likely means low inventories of available units will persist and prices will remain relatively high.

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Stephen is an urban planner with a passion for promoting sustainable, livable, and diverse cities. He advocates for smart policies, regulations, and implementation programs that enhance urban environments by committing to quality design, accommodating growth, providing a diversity of housing choices, and adequately providing public services. Stephen primarily writes about land use and transportation issues.

6 COMMENTS

  1. 4500 jobs doesn’t necessarily equal 4500 housing units. An average housing unit is home to three people. But, of course, about a third of the population doesn’t work, kids, students, seniors, housespouses, etc. It’s complicated, but 2100 units per month for 4500 jobs isn’t necessarily a shortage.

    • You’re right that there are a lot of factors at play that could dictate what the real monthly production rate should be. But I’m basing my analysis off of historic trends on the ratio of jobs to housing, which is a very good indicator of housing needed. The ratio can go up and down over time, but it really doesn’t appear to fluctuate fast or even all that much remarkably in general. In a way, it largely smooths out the things that you note above.

      I suspect the jobs-to-housing ratio number may be increasing in some places and falling in others — that’s something I’ll follow-up on in a future post. But regardless, I was being conservative with my estimates. It’s conceivable that the monthly output doesn’t need to be 4,200 units, but I wouldn’t bank on it being more than a few hundred less, especially given that most of employment and newcomers are being dumped into the Seattle proper market where there is increasingly smaller nuclear households being formed. The relationships of dual-income households or partnerships has also seen a rapid and tenuous decline or change in tradition (couples living apart). But a counterpoint could be made that certain demographics are choosing alternative nuclear household formations (e.g., more people living with roommates, parents moving back in with their children, youth delaying their departure from, and others). Those factors, of course, can impact how we see a “normal” jobs-to-housing ratio and they differ greatly based upon locale as seen in the graph above.

      Anyway, I’ll leave it there.

      • You made the best choices available regarding variables and data sets. This is a timely and very useful post; thank you.

  2. Jobs in King Co also does not mean every one of those people live in King Co, it also doesn’t have to mean that all new housing has to be developed in King Co.

    Each Sounder SB train (7 cars) can seat a total of 1000 people, there are 9 trains in the morning, and 9 out in the afternoon. I transit into Seattle from Puyallup and back each day, and easily half of all riders transit into and out of Seattle from Pierce county.

    Perhaps a solution to King Co’s woes is to operate more and faster transit to other areas, and better scheduling of local bus services around the sounder stations for that “last mile” to/from home.

    Not everyone wants to live in shoebox apartments, and thats why I chose a longer commute to buy a real house somewhere affordable.

    • The post and author’s analysis around jobs and housing is about the region, which he (and the Census Bureau) define as the sum of Pierce+King+Snohomish counties.

      I totally agree that transit service needs to be upgraded. My admin at work lives in Poulsbo, and takes transit – Kitsap Transit, the Bainbridge ferry, and Link light rail – to our SODO office. In time Everett and Federal Way (as examples) will be better connected to Seattle.

      Rent and mortgages in those places and Puyallup will be rising faster than the overall cost of living, though unless more housing region-wide is built.

    • The problem there is that those other areas are the ones voting against transit dollars. However, they might be keener on it if things were being developed that benefited their communities.

Comments are closed.