The paradox of downtown Seattle: A commercial engine between improved safety and tourist growth

Seattle is experiencing an exciting role reversal in its economic narrative. While the city is finally overcoming chronic challenges like crime and transportation, its traditional growth engine — the tech sector and the city’s employment — is starting to fizzle out.

The city has been a center for technology, retail and the arts for years, but the number of jobs in the city peaked in 2019 with more than 340,000 workers. Since the outbreak of the pandemic, that number has been steadily declining, hitting nearly 317,000 jobs — roughly the same as 2018’s numbers, according to a new report by the Downtown Seattle Association (DSA).

“We’re going in the wrong direction,” said Jon Scholes, president and CEO of the DSA, at the organization’s annual State of Downtown event Wednesday.

“In a time when we’ve seen a decline in jobs, we’ve seen a record increase in rents paid by employers in the city of Seattle – employers who don’t pay in Bellevue and other cities in our region,” he added. “We have become an outsider when it comes to the cost of doing business in our city.”

Those costs include the city’s JumpStart tax, which targets payments to large employers with high-wage workers, and last year’s restructuring of Seattle’s income tax that shifted the burden from small to large businesses. Also on the horizon is a new state tax on the wealthy that was recently passed by lawmakers.

Taxes bear the brunt of the blame, but other major forces are also at work. Across the country, companies are cutting headcount as AI tools replace other roles, economic uncertainty continues, and leaders move to reduce what they see as pandemic-era corporate “bloat.”

That said, elected officials on Wednesday acknowledged concerns about rising taxes and the federal budget.

“I’m very grateful that it’s not fair that our tax base has businesses that don’t fit in with the neighborhoods,” said Mayor Katie Wilson to a packed auditorium at the Seattle Convention Center.

Wilson and King County Executive Girmay Zahilay are both committed to keeping a close eye on their state’s budget. Wilson said he expects to make “significant” cuts and that Zahilay plans to build the district’s spending plans “from the ground up” rather than following the previous budget carry forward model.

The financial warning comes as the city’s public metrics rise. The 2025 DSA report highlighted several bright spots:

• Crime: Incidents and violent crime have decreased in the city since the 2021 peak.
• Residential Growth: The city’s population has reached nearly 110,000 – an 80% increase over the past 25 years.
• Guests: More than 15.3 million unique visitors came to the city – the number is from 2019, but it is lower compared to last year. People also visit often.
• Transportation: Light rail ridership at stations in the city jumped 23% over 2024.

However, that capacity to accommodate visitors has not yet translated into a full return to staff from Monday to Friday. Without back-to-office orders, daily worker footfalls are estimated at just 145,000 – still far below the 226,000 workers on average who filled the city’s streets each day in 2019, according to the DSA.

Amazon has helped bounce back, but multiple rounds of layoffs have dampened the effect.

Once Seattle’s largest employer, Amazon recently lost that crown to the University of Washington, the Seattle Times reports. The company had a peak of about 60,000 workers in the city in 2020, but that number has dropped to less than 50,000. That number could drop significantly as Amazon this spring moves out of a seven-story, 251,000-square-foot lease in downtown.

Besides the tech giants, the wider commercial space is struggling with a growing number of empty office spaces. Downtown vacancies reached a new high of 34.7% in the last quarter of 2025, according to CBRE. Before the pandemic, that number hovered around 8%.

Apart from these storms, contractions are not all. Other firms are doubling down in the city centre: Impinj recently renovated and expanded its office space in the city while DAT Solutions and Docker both took leases near the city’s seafront.

In an interview after the event, Scholes emphasized that the health of the entire economic ecosystem depends on these major pillars.

“We need big employers in the city,” he said. “I was with some small businesses earlier this week, and they said, ‘You know, our best customers are the big employers. They’re our lifeblood … If you’re a restaurant, if you’re a barber shop downtown, you rely on the people on those upper floors.’