Seattle multifamily investment guide

When we published our Minneapolis-St. Paul guide we described St. Paul as the one city in our coverage that had actually enacted rent stabilization. Washington has since done something larger in scope: it has capped residential rent increases across the entire state.

Section 59.18.700 of the Revised Code of Washington sets two limits. Under subsection (1)(a)(i), a landlord may not increase rent at all "During the first 12 months after the tenancy begins." Under (1)(a)(ii), any increase thereafter within a twelve month period may not exceed "seven percent plus the consumer price index, or 10 percent, whichever is less." Subsection (1)(c) defines that index as "the June 12-month percent change in the consumer price index for all urban consumers, all items, for the Seattle area," and the Washington State Department of Commerce publishes the resulting maximum percentage each year, so the operative number is a published figure rather than something an owner calculates.⁵

Now the provision that decides whether a specific building is affected, and it is structurally different from anything else in this series. Section 59.18.710(1)(a) exempts "A tenancy in a dwelling unit for which the first certificate of occupancy was issued 12 or less years before the date of the notice of the rent increase."⁴

Compare that with St. Paul. There, the exemption turns on a fixed calendar date: a building first occupied after December 31, 2004 is outside the cap, and it stays outside it permanently. In Washington the exemption is a rolling twelve year clock measured from the certificate of occupancy. Every exempt building ages into the cap. A property delivered in 2020 is exempt today and is not exempt in 2033.

For an owner that converts a regulatory question into a date arithmetic problem, which is a much better problem to have. You can compute, at acquisition, the exact year in which an asset moves from unregulated to capped, and you can see whether your intended hold period straddles it. A five year hold on a building with nine years of exemption left is a different asset from a ten year hold on the same building.

Section 59.18.710 also exempts dwelling units owned by a public housing authority, a public development authority or a nonprofit where maximum rents are regulated; qualified low-income housing developments allocated federal tax credits by the Washington State Housing Finance Commission; units where the tenant shares a bathroom or kitchen with an owner who maintains a principal residence on the property; a single-family owner-occupied residence where the owner rents no more than two units or bedrooms including an accessory dwelling unit; and a duplex, triplex or fourplex where the owner occupied one unit as a principal residence at the beginning of the tenancy and continues in occupancy. Conventional multifamily older than twelve years is inside the cap.⁴

One further feature is worth recording because it is unusual. Both operative sections carry the notation "Expires July 1, 2040." The scheme is written with a statutory sunset rather than as a permanent feature, which is a different posture from the ordinances and preemptions we have documented elsewhere and which an owner underwriting a long hold should be aware of in both directions.

• No rent increase at all during the first twelve months of a tenancy.
• Thereafter, seven percent plus CPI or ten percent, whichever is less.
• Newly built housing is exempt only while its certificate of occupancy is twelve or fewer years old.
• Both sections are written to expire on July 1, 2040.

St. Paul’s exemption is a fixed date and never expires. Washington’s is a twelve year clock, so every exempt building ages into the cap. Compute the year at acquisition.

The employment picture is the part of this market that has changed most, and the change is not in the direction the metro’s reputation implies.

Information, the sector that contains most of the software employment this region is known for, held 132,500 jobs in July 2026 and fell 0.6 percent over twelve months. It is 6.2 percent of metro employment on our arithmetic, which is smaller than most people assume.¹

Government fell 2.0 percent on 284,000 jobs, the largest decline of any sector here in absolute terms. Financial activities fell 2.7 percent on 98,700, construction 0.8 percent and other services 0.9.¹

What grew was leisure and hospitality at 3.5 percent, manufacturing at 2.9 percent on 168,500 jobs, education and health services at 2.6 percent on 315,500, and professional and business services at 1.5 percent on the metro’s largest sector at 387,700.¹

Manufacturing growing at 2.9 percent deserves note. Across this series manufacturing has been flat or falling in most markets, and here it is one of the faster growing sectors on a substantial base.¹

Total nonfarm employment reached 2,152,900, up 0.8 percent, on a civilian labor force of 2,296,000. Unemployment was 5.0 percent, unchanged from June, which is on the higher side of our coverage and sits oddly against the county’s income and education figures.¹²

The composition matters for an owner because the sectors that grew are broadly distributed across the metro while the ones that fell are concentrated in specific submarkets. A rent roll drawn from the Bellevue and downtown office economy is exposed differently from one drawn from the manufacturing and logistics employment in the south county.