We are seeing a lot of duplicate idea bills this year, and the issue of transit-oriented development (TOD) is no exception. This area, however, is especially confounding given the Legislature is expending public dollars to determine what is the best path forward on state intervention of city regulation of transit-oriented development – if any. That study will conclude in June.

In the meantime, Sen. Marko Liias (D–Edmonds), is sponsoring a new version of a transit-oriented development bill – SB 5604. In a rarity this session, however, the bill is not focused on the Growth Management Act (GMA) or the land use authority of local government. Instead, it’s focused on providing a property tax exemption for certain affordable housing development in major transit areas, administered by local jurisdictions. It appears to amend the Multi-Family Housing Property Tax Exemption (MFTE) statutes, adding new sections for TOD areas within a jurisdiction. Cities with a “station area” defined by the bill would have to implement this new program, but cities with “major transit stops” could choose to.

Please let us know what you think of this new approach, especially as property taxes are often used by cities to fund police and fire services.

In the other chamber, HB 1491 continues to pursue the GMA approach and is scheduled for a committee vote.

Date to remember

HB 1491 will be heard in the House Housing Committee on Tuesday, February 11 at 4 pm.

SB 5604 will be heard in the Senate Housing Committee on Wednesday, February 12 at 10:30 am.

Transit-oriented development bill is back despite TOD study

January 24, 2025

The Legislature has focused on transit-oriented development (TOD) for a few years and this year is no exception. The timing this year, however, is interesting because the Legislature funded a third-party TOD study last session that is underway and will report out its findings and recommendations this summer. The number one takeaway so far was to avoid one-size-fits-all legislation. The other key takeaways point to why:

• The real estate market, displacement risk, and infrastructure availability vary across the state, as well as within cities and metro regions.
• Rent-restricted units require direct subsidy or tax exemptions to pencil and must be calibrated to local economic conditions.
• Land value is a major obstacle to TOD site development.

HB 1491, sponsored again by Rep. Julia Reed (D–Seattle), would affect 33 cities in the state with high-capacity rail and bus rapid transit infrastructure and services. This year’s bill makes a few changes including adding a workforce housing requirements and increasing the affordability requirements of development near high-capacity transit.

The following are the key components of the bill:

• Requires that all residential and mixed-use development in a “station area” meet the following density in floor area ratio (FAR):
  • Average of at least 3.5 FAR with ½ mile walking to rail-based stop
  • Average of 2.5 FAR within ¼ mile walking to BRT stop or at least average of 3.0 floor area ratio if city exempts 25% of station areas
  • FAR bonus of 1.5 for affordable or workforce housing developments – all units for 50 years or dedicated permanent supportive housing.

• Prohibits a maximum density in station area
• Defines station area as all lots fully with the UGA and either ½ mile walking distance to train/light rail/commuter rail /fixed guideway station or stop or ¼ mile walking distance to BRT stop. Stop includes existing stops and those funded and planned for in six-year transit development plan
• Areas in multifamily housing that include at least three bedrooms are not counted toward FAR; although, a city may require affordability to be eligible for this exclusion
• Buildings in station area must maintain 10% of all units as affordable housing or 20% workforce housing for at least 50 years unless it was authorized prior to 2025 and:
  • Meets or exceeds FAR;
  • Has a lower-income threshold or greater amount of affordable housing; or
  • Has or expands a program under RCW 36.70A.540
• Can still use MFTE program but must meet affordability requirements of 10% affordable and 20% workforce
• Provides, but does not fund, for a capital grant program for infrastructure to accommodate TOD densities
• Parking restrictions
• SEPA categorical exemption for TOD projects

AWC appreciates the infrastructure grant program the bill includes as TOD grant application requests far exceed available funding. AWC requests further legislative action is held until the TOD study is complete.

Date to remember

HB 1491 will be heard in the House Housing Committee on Tuesday, January 28 at 4 pm.