Governor Inslee vetoed a number of bills in recognition of the coming budget challenges from the economic slowdown caused by the COVID-19 emergency. Among these, unfortunately, were two housing bills that AWC was tracking.

The first is HB 2797, our priority bill to fix technical errors in HB 1406, related to sales and use tax for affordable housing. This bill would have cleaned up several errors in the underlying statute, including a particularly concerning one in which a city wanting to participate would lose the revenue sharing if the county does not opt into the program. AWC will be watching to see if this comes to pass, but if this is a situation your city faces, please let us know so we can prepare to ask the Legislature to fix this next session.

Another element of this proposal that may be less likely to come back, unfortunately, is the proposed extension of time for cities to adopt qualifying local housing levies to benefit from a greater degree of revenue sharing. Because of timelines and the need for all parties to move forward, it’s possible that policy does not come back next year. We will be exploring whether it is possible to bring back this provision in the coming months.

HB 2634 was also vetoed. This bill would have given an exemption for Real Estate Excise Tax when property that is used for rental housing for low-income individuals is sold.

In both cases, the bills were vetoed due to concerns about obligating the state to new spending when the budget situation is so uncertain. Unfortunately, in the case of HB 2797, it appears that a confusing fiscal note that made the impact to the state seem larger than it was may have contributed to the veto.