"Workforce housing" is one of those phrases that gets used a lot and defined very little. Developers use it, city councils use it, and real estate sponsors use it, sometimes to mean quite different things. If you are an investor trying to decide whether this part of the market deserves a place in your plans, it helps to start with a clear definition and then look at what it means here in the Puget Sound.
This guide covers what workforce housing is, who lives in it, why demand for it in Washington is so persistent, and how we approach it at Veritas Equity Partners.
What workforce housing means
A working definition
The most widely cited definition comes from the Urban Land Institute. Its Terwilliger Center for Housing describes workforce households as those earning between 60 and 120 percent of area median income (AMI), adjusted for household size (ULI, "Priced Out"; see also UNC School of Government).
That range matters because it sits in between two better-known categories. Below it is subsidized affordable housing, which is often built with tax credits and comes with income limits and rent restrictions. Above it is newer, amenity-rich housing priced for higher earners. Workforce housing is the large middle: people who earn too much to qualify for most subsidies, but not enough to comfortably buy a home or rent a new luxury unit.
How it differs from "affordable housing"
The two terms are often used interchangeably, but for an investor they are different businesses. Subsidized affordable housing usually involves regulatory agreements, compliance reporting, and rents set by formula. Workforce housing, in the way most private owners use the term, is market-rate housing that happens to be priced within reach of middle-income renters. Often that is because the buildings are older, simpler, and smaller than what is being built today.
Who lives in workforce housing
The residents are the people who keep a region running. In our communities that means nurses, warehouse and logistics staff, tradespeople, and military families. Many work shifts that do not allow a long commute, so living close to work is not a luxury for them. It is how their week functions.
These are not people waiting for a market dip so they can buy. In much of the Puget Sound, the gap between renting and owning is wide enough that many middle-income households remain renters for years. We describe this simply as "renters who stay renters." That is not a judgment about anyone's choices. It is a reflection of the math in a high-cost region.
Why demand is persistent in Washington
The state is short on homes
Washington's Department of Commerce projects that the state needs to add about 1.1 million homes over the 20 years through 2044, or more than 50,000 a year, to keep pace with expected population growth (Washington State Department of Commerce, March 2, 2023). Within that projection, Commerce estimates a need for 147,844 homes for moderate-income households earning 80 to 120 percent of AMI (Washington Center for Real Estate Research, State of Washington's Housing 2024, citing Commerce). That band overlaps the upper half of the workforce range.
Renters are already stretched
The state's Office of Financial Management reports that almost half of Washington renters spend more than 30 percent of their income on housing, and about a quarter spend more than half (Washington Office of Financial Management, 2025 to 2027 budget highlights). When rent already takes that large a share of a paycheck, a well-run, reasonably priced apartment close to work is not something residents give up lightly.
New supply rarely targets this renter
New construction is expensive. Land, labor, materials, and financing costs push most new projects toward higher rents to make the numbers work. That leaves the existing stock of older apartments, many built between the 1960s and 1990s, doing most of the work of housing middle-income renters. You cannot easily replace those buildings at today's costs, which is one reason we pay close attention to them.
Why we focus on Pierce and Snohomish Counties
We are a Kirkland-based owner-operator, and we have been investing in Washington multifamily for sixteen years. Our core markets are deliberately narrow.
Snohomish County
In Snohomish County, we focus on Lynnwood, Edmonds, and Everett, along the I-5 job corridor north of Seattle. These are established communities with real employment and steady renter demand.
Pierce County
In Pierce County, we focus on Tacoma and Lakewood, anchored by Joint Base Lewis-McChord and other fixed regional employers. Military families and civilian staff need housing near the base regardless of what the stock market is doing.
What we leave out
We do not buy in Seattle or King County proper. The basis is higher, there are more bidders, and the local rules are tighter. Light rail is extending through both of our core counties, and we like that, but we never underwrite a deal on the hope of a rail-driven bump. You can read more about these choices on our strategy page.
What makes a good workforce housing investment
Workforce housing is not automatically a good investment. A poorly located building with weak demand is a problem no operator can fix. Here is how we narrow the field.
Mismanaged, not distressed
We look for solid buildings in strong locations that have been run loosely, usually by long-time owners who are tired or over their heads. Rents may sit below market, expenses may be unchecked, and units may be dated. Those are operational problems, and operational problems can be fixed. We avoid economic distress, meaning buildings that struggle because the location itself has weak or falling demand.
The right size and vintage
Our target is 30 to 100 units, built in the 1960s to 1990s, in Class B and C condition. That size sits below the scale where institutional buyers tend to compete, and older buildings can often be bought well below what it would cost to build new.
Conservative capital
We finance with long-term, fixed-rate agency or bank debt. We do not use bridge or floating-rate loans. The goal is for each property to work on its current operations, without needing interest rates to fall or rents to spike.
Operations, not market timing
Value in this kind of building comes from steady, unglamorous work: bringing rents to market gradually through turnover and renewals, rebidding vendors, and running screening, collections, and maintenance to one standard. Residents get a better-kept home, and the building gets the attention it was missing.
How this fits a long-term portfolio
For a careful investor, workforce housing can be a tangible, local way to own real assets alongside an operator who knows the buildings. It is also illiquid, and like any real estate it carries real risks, including changes in occupancy, expenses, interest rates, and local rules. It works best for people who are comfortable holding for several years and who want to understand exactly what they own.
Over sixteen years, we have closed 21 deals and acquired 468 units, and we now have about $85 million in assets under management, first with our own capital and now alongside investor partners. You can read more about the portfolio on our Portfolio page, and learn how partnering with us works on our Invest page. If you have questions about structure, accreditation, or self-directed IRAs, our FAQ is a good next stop.
Talk it through with us
If you are trying to decide whether workforce housing belongs in your plans, we are happy to walk through how we think about it, the markets we know, and what partnering with Veritas looks like. Book a Discovery Call and we will go through it together.
This website is for informational purposes only. It is not an offer to sell, or a solicitation of an offer to buy, securities. Any offering is made only through official offering documents, and only to investors who meet the requirements of that offering. Past performance does not guarantee future results. Investing in real estate involves risk, including the possible loss of capital.
Sources cited
Urban Land Institute, Terwilliger Center, "Priced Out" (definition of workforce households as 60 to 120 percent of AMI): https://americas.uli.org/wp-content/uploads/ULI-Documents/Priced-Out-San-Francisco-FINAL.pdf
UNC School of Government, "What Exactly is Workforce Housing and Why is it Important?" (July 12, 2018): https://ced.sog.unc.edu/2018/07/12/what-exactly-is-workforce-housing-and-why-is-it-important/
Washington State Department of Commerce, "Washington state will need more than 1 million homes in next 20 years" (March 2, 2023): https://www.commerce.wa.gov/washington-state-will-need-more-than-1-million-homes-in-next-20-years/
Washington Center for Real Estate Research, University of Washington, "State of Washington's Housing 2024," Table 1, citing Commerce projections: https://wcrer.be.uw.edu/wp-content/uploads/sites/60/2024/10/State-of-Washingtons-Housing-Report-2024.pdf
Washington Office of Financial Management, 2025 to 2027 proposed budget, strategic priorities (renter cost burden): https://ofm.wa.gov/budget/state-budget-2025-27/proposed-biennial/highlights/strategic-priorities/