Who Actually Owns Washington State Homes?

Gaze down at our fair state from cyberspace and the numbers begin to paint a curious picture of who owns Washington real estate. Fewer landowners may vote (or live) here than you might think. A bill written up this session to fence off your neighborhood from Wall Street begged the expensive question of just how many people live in what they own.

That bill in question from Sen. Emily Alvarado aimed to cap the number of houses private equity firms could put under their belts. The Seattle Democrat’s proposal was inspired in large part by the Emerald City’s allure to investors. As much as nine percent of its single-family rental homes were owned in 2022 by real-estate players with more than 1,000 houses in their pockets, per federal data. That’s in the neighborhood of 15,000 houses.

Washington is many thousands of homes short of its goal to meet mid-century demand of a million more homes. Wall Street money is alleged to drive up home prices, dry up housing stock, and elbow would-be home buyers out of the market. In that scenario, hot housing markets like Seattle’s could boil over.

The crux of this story is hard data on the above — or rather, lack thereof. Private equity is private, after all. Still, the concentration of out-of-state homeowners can give us an inkling of what’s catching their eye. You can thank Alex Alsup and Matthew Klovski over at Regrid who map out the matter in part below using street addresses, land-use classifications, and mailing addresses for property-tax bills. 

Based on their findings, some 5 percent of American homes are owned by someone out-of-state in 2023. Those someones could include any number of local landlords, non-profits, hedge funds, and heirs to grandma’s house.

Keep in mind plenty of owners can use law firms or offices for their mailing addresses, possibly understating true out-of-state ownership, so consider the following numbers conservative.

Unsurprisingly, the picturesque shores of the San Juan Islands were the top locale in Washington for out-of-state homeowners, who are likely sitting on a wealth of vacation rentals. Said homeowners owned some 17 percent of San Juan County real estate, where 22 percent was not owner-occupied, per Regrid.

It might—or might not—surprise Seattleites to see that absentees own a large chunk of the city’s core. That includes the University District, South Lake Union, the Westlake area, and thereabouts. The lion’s share of those abodes are likely the kind of small rentals sprinkling Seattle.

Nailing down who these out-of-state homeowners are is a part of the equation Regrid and lawmakers will both be interested in cracking, especially as the issue catches fire in the other Washington.

Meanwhile in this one, the Attorney General is going after a cadre of alleged slumlords from out of state. Among the accused are California-based property management company, FPI Management, Inc., and a suite of landlords behind five Western Washington apartment complexes catering to low-income seniors. (The property owners in question are Vintage Housing Holdings LLC; Amcal Multi-Housing LLC; Vintage at Everett 2, LP; Amwa Cedar Pointe Fund, LP; Vintage at Sequim, LP; and Vintage at Tacoma, LLC.)

The AG’s office alleges FPI and crew charged higher-than-advertised rents based on area median income rather than personal income. (The former tends to be the higher of the two.) Also, the state alleges tenants were set up in homes with black mold and torn flooring, while promised amenities like pools and computer rooms were either closed or nonexistent. The company’s so-called “luxury” complexes were also targets for theft and vandalism, per the AG’s complaint.

The AG’s office alleges the above defied the state’s Consumer Protection Act and is looking for north of $12,000 per violation plus restitution for tenants and court costs. The proverbial ball is now in Snohomish County’s Superior Court.

This story also appeared in the author’s website, The Washington Observer.