As AWC and other stakeholders working to increase affordable housing in the state have shown, it’s going to take significant new revenue to address half of our underproduced housing need—housing that requires public subsidy. While we are hopeful that the Governor’s bold $4 billion bonding bill gains the traction it deserves, we are also supporting another proposal that aligns with the direct funding pillar of AWC’s Housing Solutions Group proposal – using new real estate excise tax (REET) dollars to fund housing.

In brief, HB 1628, provides two new REET sources:

1. Local – Creates a new .25% councilmanic local option REET (REET 3) that can be used to fund affordable rentals, affordable home ownership, and infrastructure to support housing.
2. State – Creates a new state REET tier, increasing the current tax for the portions of property value exceeding $5 million from 3% to 4%. That provision is projected to raise $200 million per year for state housing programs.

An amended version passed out of the policy committee and contains the following improvements that AWC advocated for:

• Allows revenue from REET 3 to be used for infrastructure costs associated with eligible affordable housing and facilities.
• Allows counties that are not required to plan under the GMA, but that have chosen to do so, and the cities within those counties, to impose REET 3 with councilmanic authority, rather than with voter approval.
• Allows revenue from REET 2 to be used for any capital project for which REET 1 could be used and vice versa, including for facilities for those experiencing homelessness and affordable housing projects.
• Removes differences in allowed uses of REET 1 based on the size and GMA planning-status of the county or city.
• Repeals the December 31, 2023, deadline and spending caps for maintenance, operation, or service support of existing capital projects, including the provision of services to residents of affordable housing or shelter units.

If you haven’t already shared what this would mean for your city with your legislative delegation, now is the time! To sign in support of the bill without testifying, go to this page and submit no later than one hour before the hearing starts.

Date to remember

HB 1628 will be heard on Tuesday, February 21 at 8 am in the House Finance Committee.