AWC appreciates legislative interest in proposing bills that intend to incentivize low-income housing. One bill is especially promising as it addresses part of the affordable housing issue in our vacation destination communities.

SB 5334, introduced by Sen. Liz Lovelett (D–Anacortes), provides a new local option revenue opportunity for cities in the form of authorizing an optional special excise tax on the sale or rental of short-term vacation rentals. The tax may be levied at either 1% or 2%. The revenue must be used exclusively for the operating and capital costs of affordable housing programs including, but not limited to, homeless housing assistance, temporary shelters, and other related services.

The stated purpose of HB 1343 is to give communities a local option to preserve and increase healthy, high quality, and affordable rental housing for very low-income households in areas that have insufficient affordable housing opportunities available. To do that, the bill, sponsored by Rep. Shelley Kloba (D–Kirkland), proposes the following:

• Authorizes cities and counties to create a prescriptive affordable housing incentive program to preserve very low-income rental housing (50% and below) whose occupants are at-risk of displacement
• Only applies to multifamily residential buildings that are at least 25 years old
• The property must have at minimum of 25% of units rented at no more than 30% of the income of households at 50% or below AMI
• Must have 90% occupancy rate at time of exemption application
• Must provide a minimum of 50% of the building space for permanent residential units
• Provide property tax exemption for eligible property owners for 6 years, with one renewal based on amount of total square footage that is dedicated to qualifying units
• Requires government inspection

The bill has pages of more specific requirements for both the property owner and the regulating local jurisdiction. Please provide feedback that can streamline this proposal yet still achieve the desired intent.

HB 1350, sponsored by Rep. Amy Walen (D–Kirkland), would expand the 12-year multifamily tax exemption program (MFTE) to include converting existing multifamily units in buildings that were built no more than 15 years ago. Unfortunately, this opportunity is only available in Clark, King, Pierce, Snohomish, Spokane, and Thurston counties. Further, to use this expansion a city must designate a “low-income conversion target area” as detailed in the bill.

Dates to remember

HB 1343 and HB 1350 will both be heard in the House Housing Committee on Tuesday, January 31 at 4 pm.

SB 5334 will be heard in the Senate Local Government, Land Use & Tribal Affairs Committee on Tuesday, January 31 at 8 am.