Decreased building permits in Seattle will mean increased fees for new construction, the Seattle City Council Budget Committee decided at its 2026 budget meeting.

Among the items in the unanimously-passed budget was $349.5 million for affordable housing investments — five times the amount allocated in 2019, according to a press release.

Any celebration surrounding that record-high investment, though, was drowned out by industry outcry against the 18% hike on permit fees at the Seattle Department of Construction and Inspections. Given a 6.5% adjustment for inflation, that effectively means builders will be paying nearly 25% more than they were in years past.

The rationale behind the hike, said Economist Matthew Gardner, is that fewer large, expensive projects are being built in the city — and since SDCI relies almost entirely on permit fees for operation costs, the department will have to start cutting staff if revenue doesn’t increase.

“Although I can certainly sympathize with anyone who is faced with having to cut staff, to further increase the regulatory cost burden that all builders face is short-sighted at best,” Gardner told Seattle Agent. “I think that everyone can agree that the city is in the middle of an affordability crisis when it comes to housing — both ownership and rental. I also think that it is common knowledge that builders will pass along as much of the fees that they face to the end user in the form of higher sale prices or higher rents.”

According to one report, residential homebuilders will pay an extra $543 in permit fees for accessory dwelling units, but multifamily developers could pay an extra $50,000 for large apartment buildings.

Ultimately, though, if prices hit an unachievable level, builders are faced with no other choice than to postpone construction, Gardner said — or not to build at all.

“There is only one way to address the housing crisis that we find ourselves in, and that’s by building our way out of it. Anything that further hobbles builders’ ability to create housing will only exacerbate the most important issue that the city faces,” added Gardner.