The Building Industry Association of Washington (BIAW) and the Washington Center for Housing Studies have released a report shedding light on the rising home construction costs in the state, blaming burdensome government regulations for contributing to the higher prices.

The report, “Cost of Constructing New Homes in Washington State (2024),” paints a concerning picture of the state’s housing market. According to the findings, the average cost to build a single-family detached home in Washington is $309 per square foot, significantly higher than the national average of $428,215 for a similar home. The median sales price for a 2,505-square-foot home in Washington is $690,701, which reflects the higher construction expenses in the state.

The report highlights the costs of building townhomes, which average $404 per square foot with a median sales price of $592,195. Furthermore, the average cost of raw land in key counties is $286,996 per lot. Regulatory costs, imposed by local, state, and federal governments, contribute a substantial 23.8% to the final price of a home—amounting to approximately $164,386.

“Washington families are struggling to afford homeownership due to rising construction costs and burdensome regulations,” said Kent Arola, President of BIAW. “We need smart policies that encourage housing development while keeping costs manageable.”

The report urges the passage of several housing affordability bills, including Senate Bill 5184, which seeks to modernize parking regulations, and House Bill 1096, which aims to facilitate administrative lot splitting to create more buildable land. Additionally, Senate Bill 5729 proposes allowing a licensed design professional to submit a complete permit application, streamlining permit approval timelines.

BIAW’s findings align with the challenges faced by both the private and public sectors regarding the housing crisis in Washington. The National Low Income Housing Coalition reports a shortage of nearly 172,000 affordable and available rental homes for extremely low-income renters in the state. Additionally, the Washington State Department of Commerce forecasts the need to add 1.1 million homes over the next 20 years, with more than half of those needing to be affordable for the lowest-income residents.

As costs continue to rise, addressing these regulatory challenges and enacting effective housing policies will be crucial in ensuring that Washington’s families can afford to own homes.

Key Findings

• The average cost to build a single-family home in Washington is $309 per square foot.
• Townhomes cost an average of $404 per square foot.
• Regulatory costs account for 23.8% of the total price, or $164,386 per home.
• Legislative action is needed to pass housing affordability bills and streamline the construction process.

The State’s Housing Shortage

• Washington needs 1.1 million homes in the next 20 years.
• Over half of those need to be affordable for the lowest-income residents.
• A shortage of 172,000 affordable rental homes exists for extremely low-income renters.

‍Washington’s housing market is being severely impacted by rising construction costs and extensive regulations. Immediate legislative action is needed to address these challenges and provide affordable housing options for residents across the state.

Originally reported by Brett Davis in MSN.