Vancouver’s housing construction not keeping pace with city’s expected growth

By 2045, the population of Vancouver, Washington, is expected to grow by more than 80,000 new residents — a roughly 40% increase.

According to Vancouver’s 2025 Housing Report, the city will need to develop 2,500 new units a year to meet housing demand. But the city is falling well short of that goal for both market-rate and affordable housing projects, as OPB recently reported.

City officials point to a range of factors for the slowdown. That includes rising construction costs, high interest rates, the ongoing effects of tariffs and the difficulty of accessing state funds to develop multifamily, affordable housing units.

Meanwhile, Vancouver is close to finalizing a new comprehensive plan to guide the city’s growth over the next 20 years. The draft calls for updating zoning codes to ease higher-density housing development in neighborhoods, for example, which would align with new state requirements to boost housing development.

OPB’s Southwest Washington Bureau Chief Erik Neumann joins us for more details.

Note: The following transcript was transcribed digitally and validated for accuracy, readability and formatting by an OPB volunteer.

Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. Vancouver’s population is expected to grow about 40% in the next 20 years. That’s more than 80,000 new residents who are going to have to live somewhere. If that’s going to be in Vancouver itself, the city estimates it needs to build 2,500 new units every year, but it’s falling well short of that goal.

OPB’s Southwest Washington Bureau Chief Erik Neumann has been covering this story and he joins us now. It’s great to have you back on the show.

Erik Neumann: Thanks for having me.

Miller: So can you give us a sense for how much the city of Vancouver is falling short right now in terms of that goal I mentioned?

Neumann: Sure, so the city’s in the process of finishing their comprehensive plan, which is this 20-year growth plan that they’ve been working on. As you said, they’re expecting 81,000 people to move here over that 20-year period. So they’re saying like, well, we need to steadily build houses in order to create places for all these people to live. Planners have set this target of around 2,000 to 2,500 houses or units needing to be built each year. And the city is building far below that.

So, there’s a few different ways that they measure that. The big one is permits for new residential units that have been applied for. And so in 2025, the last year that they were measuring it, the city was 50% of the six-year average. So if you look at the past six years, it’s only 50%. That’s even below this goal of 2,000. If you look at this goal of 2,000, it’s only like a third of trying to reach that point.

Miller: Wow. So what would it look like in Vancouver if they were actually meeting the goal? I’m trying to figure out the scale of development that the analysts say is necessary.

Neumann: Yeah, so this was presented at the city council meeting on Monday and the visual that was used then was that they’re going to need a new waterfront development built every year in the city of Vancouver. So for people that are familiar with the city, that’s kind of this fancy newish neighborhood along the Columbia River, right near the I-5 Bridge. It’s about 2,400 units, if everything that’s permitted is fully built. So they’re not necessarily saying there needs to be a whole bunch of tall condo complexes built in different neighborhoods around the city…

Miller: But that number of units’ equivalent?

Neumann: Yeah, spread across the city.

Miller: How does Vancouver compare to other cities in Clark County right now in terms of housing?

Neumann: So it’s a little bit of a tricky comparison to make because Vancouver is really the population center of Clark County. The other cities are quite a bit smaller. There are other cities that are growing pretty fast. Ridgefield, I think, is growing faster than any other city in Clark County. Most of what it is building are single-family homes.

In comparison, Vancouver is really where all the affordable housing is being built in Clark County. So I kind of put that question to planners and they said it’s a little bit of an apples and oranges comparison. And also, there’s a lot more renters in Vancouver. There’s very little renting in the rest of the county.

Miller: Often when we talk about shortages in terms of housing production or challenges in building new housing, we hear builders complaining about things like zoning and permitting. Is that the case in Vancouver right now?

Neumann: Interestingly not, at least from what I heard from both the Building Industry Association of Clark County and the Vancouver Housing Authority. And that first organization, they do market rate housing. They represent all the builders. The other one, the Vancouver Housing Authority does all the affordable housing in Vancouver. So they both said basically that the city is doing everything that it can in its power to juice the system and get more houses built. So they had all these different examples of how they’re trying to reform zoning, change codes, and be flexible, and work with builders and stuff. And they basically just said a lot of these actual challenges out there are just outside of the city’s control.

Miller: OK, I understand one of those is the higher cost of construction. What’s driving those costs right now?

Neumann: It’s a combination of mostly national costs, I would say. So things that people are familiar with: high interest rates, labor shortages, increased insurance costs, tariffs on things like wood and steel. That’s sort of these headwinds that are coming from the national level. And then at the state level, there’s just not enough investment from the state’s Housing Trust Fund, which is this big bucket of money that lawmakers have created to pay for affordable housing in Washington state.

Miller: I want to hear more about affordable housing in a little bit, but one thing I noticed in your reporting is that rent levels are flat, which is welcome news for people who are renting. But what does that mean for developers and their interest in building new developments?

Neumann: Well, I should clarify, rent is not flat. I think probably most renters would maybe take issue with that. The issue is that inflation is going up faster than rent. So, rent levels are increasing, inflation is surpassing that. And if you put yourself in the mind of a builder, they say, “Well, I can’t make as much money because the costs of inflation are going up faster than my rent increases.” So that’s a disincentive for builders to build more. It’s kind of yet another one of these factors that’s just slowing down the progress to building more units.

Miller: What did you hear about the question of buildable land, places where new units could actually go?

Neumann: That’s a point that came up from the Building Industry Association and the short answer is they want more of it. So they argue that it’s expensive to do in-fill buildings within the city boundaries, it’s slower, there’s more environmental regulations, more permitting and things like that. So they want to have more raw land outside of the city to build on. The city argues there is enough room within city boundaries to meet these housing goals that they want. So they’re going to try and do it through adding density in Vancouver.

Miller: And some of the builders are saying we want to annex more land, to bring it into the city.

Neumann: That’s sort of the argument, which is this big argument about, do you encourage sprawl or do you try to focus on density? I think that’s not a part of the comprehensive plan goal right now. So those boundaries are gonna pretty much stay intact.

Miller: Is the shortage of development that we’re talking about expected to hit both affordable and market rate units?

Neumann: Yep, both affordable and market rate, and also commercial construction is decreasing, compared to previous years.

Miller: What are the specific challenges that affordable housing developers are facing right now?

Neumann: So I mentioned it before, but it’s this big bucket of money in Washington state called the Housing Trust Fund. And basically, lawmakers have put a lot of money into this in the past, in recent years, but it’s not keeping up with the demand for housing in Washington state. So, during this presentation on Monday, they had this big map of Washington state that showed where all these different affordable housing projects have been funded. A lot of it’s in the Puget Sound area. Some of it’s in other parts of the state, but the argument that city planners had was basically, for Vancouver’s population, we’re getting about half the number of grants that we should for affordable housing projects. So a lot of them are just kind of sitting, waiting for funding.

Miller: It’s striking that a lot of the issues that you’ve been talking about – inflation, tariffs, interest rates, all federal things or state support for affordable housing – these are all things that it seems a local government like the city of Vancouver just does not have that much influence over. There’s only so much Vancouver City Council or the mayor can do about tariffs, for example, or interest rates.

So what did you hear from folks about what policies they actually want to see at the city level, what they want city leaders to do?

Neumann: They really didn’t offer that many suggestions or requests beyond keeping going with what the city is actually doing right now, so continuing to have this flexibility in terms of building, working with builders. Affordable housing developers were saying, we just have opportunities for affordable projects to get a leg up to help them secure the space that might otherwise go to other projects.

And then one of these planners did lead with this idea, that one of the big tools right now is this big kind of wonky comprehensive plan that the city is finishing because that will overhaul land use in the city. And it could open up lots of parts of the city for new housing production. They’re hoping to finish that up in June.

Miller: Erik, thanks very much.

Neumann: Thank you.

Miller: Erik Neumann is OPB’s Southwest Washington bureau chief. He wrote recently about housing production in Vancouver.

“Think Out Loud®” broadcasts live at noon every day and rebroadcasts at 8 p.m.

If you’d like to comment on any of the topics in this show or suggest a topic of your own, please get in touch with us on Facebook, send an email to thinkoutloud@opb.org, or you can leave a voicemail for us at 503-293-1983.