As we have shared, the 2023 legislative session has seen an incredible amount of action in the housing and land use arena. With the four legislative caucuses prioritizing affordable housing, it was hard to keep up with all proposals at times. One guiding light that AWC used to advocate collectively on these bills was the AWC Housing Solutions Group (HSG) proposal that was introduced prior to session.

As the session concludes, we’d like to revisit the proposal and update you on elements that were enacted, and a few unfortunate ones that were not.

Zoning and density

Passed – AWC ultimately shifted to support one of the biggest policy proposals of the year, Rep. Bateman’s (D–Olympia) middle housing bill, HB 1110. Although there were some key differences, especially in the units per lot requirement for cities over 75,000 in population, the two proposals are mostly aligned. While AWC proposed three units, the requirement for the largest cities is four units per lot. For smaller cities, the Legislature adopted a unit count that was less than the AWC proposal, only requiring two units per lot unless there are affordability provisions or proximity to transit. For alternative compliance, both AWC’s proposal and HB 1110 include an option for cities to choose the upzone to apply to 75% of single-family residential lots.

Did not pass – We worked hard to find agreement on the transit-oriented development bill from Sen. Liias (D–Edmonds), SB 5466. The bill was close to the AWC proposal of no maximum densities around light rail if the development provided affordable housing. A big sticking point was the implications of the floor area ratio concept, and especially the ramifications of having to allow that much square footage on every lot proximate to bus rapid transit. We hope there is continued refinement if this proposal moves forward in the future.

Regulatory streamlining

The HSG advanced a significant platform of regulatory reforms that were almost all adopted. Below are the planks and the bills that passed to implement them.

Passed:

• SB 5412 – Exempts all residential development from SEPA if the development intensity is consistent with what is planned for in the comprehensive plan and an environmental analysis has been prepared for the impacted area, including multimodal transportation impacts.
• HB 1293 – Eliminate external design review boards and only allow administrative review of design standards. External design review boards include community volunteer based advisory boards.
• SB 5290 – Provide state funding assistance for voluntary code audits and to develop more online and streamlined permitting systems.
• SB 5491 – Support changes to the state building code to facilitate middle housing. SB 5491 will lead to authorization single-stairwell apartments.

Did not pass:

• HB 1167 – Apply the residential building code up to six units. Unfortunately, HB 1167, which would have addressed the building code application to multiplexes, did not advance.

Infrastructure to support housing

Two major areas of the HSG infrastructure plank were also adopted.

• Restore revenues to the Public Works Assistance Account to ensure infrastructure funding for capacity increases. The Capital Budget restored the diverted revenues from the PWAA which allows an appropriation of $400 million for infrastructure.
• Continue and enhance the Connecting Housing and Infrastructure Program. The final budget appropriated $60 million for this program.

Direct investment in affordable housing

Part of this HSG plank may be the most disappointing as session concludes. The good news is there were very strong capital budgets in the housing space, including HB 1474, creating homebuyer assistance resources for those who have been harmed by racially restrictive covenants. The bad news is that a landmark proposal to provide state and local resources from a new real estate excise tax (REET), that would have created the first dedicated revenue stream for the Housing Trust Fund, failed to advance in the final days of session.

Passed – Increase funding for cities to plan for housing and density increases.

Did not pass:

• Increase funding for low-income housing by at least $1 billion per year. Although the state did not hit this mark, very significant investments in housing were made. Unfortunately, we were not able to secure support for a sustainable funding source.
• Provide a new .25% councilmanic local option REET that could be used to fund affordable rentals, affordable home ownership, and infrastructure to support housing; Allow cities to convert local REET taxes to “progressive tiers” mirroring the state.
• Provide additional flexibility for use of lodging taxes for affordable housing.