Flames were seen burning on the second and the third levels of the View Ridge Park Villa Apartments and heavy plumes of smoke were seen pouring out of the 24-unit structure.
The fire damaged about six apartments, but nobody was allowed to return inside because the power is still out.
Neighbor TJ Hardin saw flames shooting out of the building and ran to help.
"They were panicked, scared, confused didn't know what to do," he said. "My adrenaline was rushing. My first concern was anybody inside -- children, elderly people like that."
Metro Transit buses were called to shelter the dozens of residents displaced by the fire. The Red Cross is now working to find a place for the residents to stay overnight.
"Their immediate concerns are just like anyone else -- food, lodging care, comfort in knowing in the future things are going to be okay," said Mat McBride of the American Red Cross.
First reports out of the area indicated the fire was gas fueled, but Dorothy Bracken of Puget Sound Energy later determined the company does not supply gas to the apartments.
Investigators said Monday night the fire was likely caused by a failed base board heater on the second floor.
There were no immediate reports of injuries.