Washington’s housing crisis worsens as budget cuts choke water infrastructure
Washington state’s housing crisis has deepened as repeated budget cuts to a key infrastructure fund stall new developments. Over 1,600 homebuilding projects in Seattle alone were blocked between 2017 and 2023 due to water shortages linked to underfunded systems. Now, further diversions from the Public Works Assistance Account (PWAA) threaten to worsen delays across the state.
The PWAA was created to finance essential local projects like roads, bridges, and water connections—all critical for new housing. Since the early 2000s, however, the Legislature has repeatedly redirected its funds to plug gaps in the state’s operating budget. Between 1985 and 2017, lawmakers took $2.2 billion from the account while still funding $3.3 billion in infrastructure.
Recent cuts have grown sharper. For the 2025–2027 period, $288 million was diverted, with Governor Bob Ferguson’s latest proposal adding another $75 million for 2027. These reductions create uncertainty for builders and local governments, who may hesitate to apply for permits if water and sewage systems remain unreliable.
The impact extends beyond stalled construction. A 2023 study by the National Association of Home Builders showed that 14,348 single-family and 32,368 multifamily homes in Washington generated nearly $4 billion in taxes and fees for state and local budgets. Fewer homes mean less revenue for schools, roads, and services.
Industry groups have raised alarms. The Master Builders Association of King and Snohomish Counties warned that continued raids on the PWAA could undermine recent housing laws. Without stable funding, cities may struggle to meet growing demand, leaving thousands of planned homes unbuilt.
The Legislature’s latest diversions bring the total taken from the PWAA to billions over decades. With fewer infrastructure projects approved, water shortages and permit denials are likely to persist. State officials and builders now face the challenge of balancing budgets without further delaying housing that communities urgently need.
