Surveying the dozens of towering cranes growing into Seattle's skyline, one might wonder if there's a housing boom that will eventually crash as it did in the last Seattle real estate downturn. It's a reasonable reaction for an untrained observer, but it's also a dangerous one for the region's ability to plan for accommodating smart growth.

Seattle was recently cited as the top U.S. city for construction cranes, with twice as many in action as New York or San Francisco. Viscerally, it feels like a building boom that could outstrip demand.

The problem is that, by and large, the city isn't building housing. Of the 16 new high-rise towers being built in Seattle, just two of them are condominiums. Between Seattle's three new condo buildings, the city is adding about 1,000 housing units. New apartment buildings are only bringing online around 2,000 new units in the short term. Meanwhile, King County issued 71,000 new driver's licenses to people from out of state in 2015. Most of these people will work in the metropolitan core. The numbers aren't adding up.

Seattle's rate of housing construction continues to fall behind the region's population growth. The demand for housing comes from a changing local environment. An ever-increasing population of technology, health-care, science and other workers are relocating to the area for its booming employment market.

In the current environment, with robust job growth and a nationwide spotlight, Seattle is experiencing rapid price appreciation. Double-digit gains have become the norm, squeezing the ability of the average resident to live in the core. This creates great stress on the transportation system as residents move further out and commute back in to the city.

Seattle's growth isn't a new story, but defining its size and impact is often difficult. Companies are often tight-lipped about hiring numbers. Based on multiple reports, though, just four local companies are planning on hiring an additional 10,000 employees in the coming year. There's phenomenal job growth throughout the region across dozens of large organizations, but by simply focusing on Amazon AMZN, -1.68% , Google, GOOG, -1.66% Facebook FB, -0.16% , and Microsoft MSFT, -1.12% the region needs to build an additional 10,000 housing units within a reasonable commute distance to keep our housing situation from becoming more constricted.

What about that forest of cranes? It seems that most of Seattle's construction is focused on offices for the workday employees as opposed to homes to house them within close proximity. Amazon is nothing less than a phenomenon. It occupies 10 million square feet of commercial space in Seattle, and it seems to announce plans to build a new tower every other month. The company is hiring as quickly as it is building offices.

Many of these new residents will want to buy homes. While the growing city requires greater density of housing, condo construction lags far behind population growth. There are a scarce few condo construction projects coming to market, and few in the planning phase. Between Insignia, Gridiron, and Luma projects opening between 2015 and 2017, less than 1,000 new condos will be available to purchase.

Developers blame the lack of condo construction on onerous regulations that put tremendous liability on the builders of condos. The costs of construction, and the virtual guarantee of being sued in the current environment, render most Seattle real estate projects unworthy of condo development.

Smart growth requires the region to encourage density in the locations where employment exists. Local officials need to embrace the links between housing supply, development costs and the ability to provide affordable housing and reliable transportation for citizens at all income levels. The price of housing has always affected the ability of the entire spectrum of residents to live in a healthy environment and have a reasonable work commute.

Seattle needs more housing. It needs higher-end housing that's in demand by our new residents to slow the rapid price increases due to constricted supply. It needs moderately priced housing to keep its long-time citizens within reasonable distances from their employment and ease transportation issues. It needs affordable housing to keep our residents who are being stretched to their limits in safe environments where they can continue to work and grow without the fear of losing everything.

It's time for Seattle to talk seriously about what will ultimately decide our fate — supply and demand. There is no band-aid or legislative work-around that negates the laws of economics.

The conversation starts with supply. Everything else is a game of musical chairs.