diff --git a/colaflow-api/src/ColaFlow.API/Program.cs b/colaflow-api/src/ColaFlow.API/Program.cs
index a742d60..b4d4ffe 100644
--- a/colaflow-api/src/ColaFlow.API/Program.cs
+++ b/colaflow-api/src/ColaFlow.API/Program.cs
@@ -5,7 +5,10 @@ using ColaFlow.API.Middleware;
 using ColaFlow.API.Services;
 using ColaFlow.Modules.Identity.Application;
 using ColaFlow.Modules.Identity.Infrastructure;
+using ColaFlow.Modules.Identity.Infrastructure.Persistence;
+using ColaFlow.Modules.ProjectManagement.Infrastructure.Persistence;
 using Microsoft.AspNetCore.Authentication.JwtBearer;
+using Microsoft.EntityFrameworkCore;
 using Microsoft.IdentityModel.Tokens;
 using Scalar.AspNetCore;
 using System.Text;
@@ -198,6 +201,52 @@ app.MapHealthChecks("/health");
 app.MapHub<ProjectHub>("/hubs/project");
 app.MapHub<NotificationHub>("/hubs/notification");
 
+// ============================================
+// Auto-migrate databases in development
+// ============================================
+if (app.Environment.IsDevelopment())
+{
+    app.Logger.LogInformation("Running in Development mode, applying database migrations...");
+
+    using (var scope = app.Services.CreateScope())
+    {
+        var services = scope.ServiceProvider;
+
+        try
+        {
+            // Migrate Identity module
+            var identityDbContext = services.GetRequiredService<IdentityDbContext>();
+            await identityDbContext.Database.MigrateAsync();
+            app.Logger.LogInformation("✅ Identity module migrations applied successfully");
+
+            // Migrate ProjectManagement module
+            var pmDbContext = services.GetRequiredService<PMDbContext>();
+            await pmDbContext.Database.MigrateAsync();
+            app.Logger.LogInformation("✅ ProjectManagement module migrations applied successfully");
+
+            // Migrate IssueManagement module (if exists)
+            try
+            {
+                var issueDbContext = services.GetRequiredService<ColaFlow.Modules.IssueManagement.Infrastructure.Persistence.IssueManagementDbContext>();
+                await issueDbContext.Database.MigrateAsync();
+                app.Logger.LogInformation("✅ IssueManagement module migrations applied successfully");
+            }
+            catch (InvalidOperationException)
+            {
+                // IssueManagement module may not exist yet or not registered
+                app.Logger.LogWarning("⚠️ IssueManagement module not found, skipping migrations");
+            }
+
+            app.Logger.LogInformation("🎉 All database migrations completed successfully!");
+        }
+        catch (Exception ex)
+        {
+            app.Logger.LogError(ex, "❌ Error occurred while applying migrations");
+            throw; // Re-throw to prevent app from starting with broken database
+        }
+    }
+}
+
 app.Run();
 
 // Make the implicit Program class public for integration tests
diff --git a/scripts/seed-data.sql b/scripts/seed-data.sql
index b1b42a8..8c5f5b9 100644
--- a/scripts/seed-data.sql
+++ b/scripts/seed-data.sql
@@ -70,8 +70,8 @@ BEGIN
         v_owner_user_id,
         v_tenant_id,
         'owner@demo.com',
-        -- BCrypt hash for 'Demo@123456'
-        '$2a$11$ZqX5Z5Z5Z5Z5Z5Z5Z5Z5ZuZqX5Z5Z5Z5Z5Z5Z5Z5Z5Z5Z5Z5Z5Z5Z5',
+        -- BCrypt hash for 'Demo@123456' (workFactor=11)
+        '$2a$11$VkcKFpWpEurtrkrEJzd1lOaDEa/KAXiOZzOUE94mfMFlqBNkANxSK',
         'John Owner',
         'Active',
         'local',
@@ -94,8 +94,8 @@ BEGIN
         v_developer_user_id,
         v_tenant_id,
         'developer@demo.com',
-        -- BCrypt hash for 'Demo@123456'
-        '$2a$11$ZqX5Z5Z5Z5Z5Z5Z5Z5Z5ZuZqX5Z5Z5Z5Z5Z5Z5Z5Z5Z5Z5Z5Z5Z5Z5',
+        -- BCrypt hash for 'Demo@123456' (workFactor=11)
+        '$2a$11$VkcKFpWpEurtrkrEJzd1lOaDEa/KAXiOZzOUE94mfMFlqBNkANxSK',
         'Jane Developer',
         'Active',
         'local',