Many housing-related bills of all flavors are up for hearings this week in both chambers.

Housing incentive week

Several, mostly incentive-based, approaches to encourage cities to adopt new policies on housing-related land use are up for hearings. AWC would appreciate your feedback regarding which of the policies provide the most useful incentives and are most appealing to your city.

AWC would appreciate your feedback regarding which of the policies provide the most useful incentives and are most appealing to your city.

HB 1157, from Rep. Jessica Bateman (D–Olympia), contains a mixture of mandates and incentives. It amends the Housing Element of the Growth Management Act to direct cities to plan for missing middle housing types (duplexes, triplexes, fourplexes, courtyard apartments, townhomes and accessory dwelling units (ADUs)), to consider housing locations in relation to employment locations, and to include regional housing issues in the countywide plans. It also requires cities to allow a minimum net density of six units per acre in residential areas, with several exceptions.

Regarding incentives, according to the proposed bill cities may designate one or more real estate excise tax (REET) density incentive zones. Zones must newly authorize missing middle housing, including ADUs, or have done so since January 2017. Dwelling units that are constructed within the zone provide for a remittance to the city of a share of the state REET on the unit. The funds can be spent on long range planning, GMA and development regulation adoption, and other costs associated with GMA comprehensive plans.

SB 5269, from Sen. Mona Das (D–Kent), is a property tax-based housing incentive proposal. First, note that the bill was introduced with a significant drafting error that inadvertently turned an optional incentive into a mandate. We understand that a substitute bill is already underway to make the correction. With this in light, please share feedback as if the bill were optional.

Cities that permit duplexes on all parcels, triplexes through sixplexes, townhomes, and cottage clusters on a range of 50-80% of parcels, and make several changes to parking and design standards, would get access to a three-year property tax incentive. It appears that the goal is to allow cities to establish a zone where these standards would be met – and the incentive received—rather than across the city. However, this point is not entirely clear in the language of the bill.

The incentive provides that for a period of three years within such a zone, the 1% property tax limit does not apply to any increase in value within the zone. The incentive effectively allows a city to increase its property tax base by the value growth of new development in the zone over the span of three years.

SB 5312, from Sen. Mark Mullet (D–Issaquah), is aimed at providing competitive grant funding for cities to support a variety of pre-development environmental analyses. The upfront review and cost—borne by the state—is intended to provide an incentive to, and facilitate, housing development by saving developers time and money and increasing certainty.

Grant awards must prioritize applications that facilitate transit-oriented development, the total number of housing units authorized, proximity and quality of transit access, building height allowance, parking requirements, and other features. Unique to this bill is that transit access includes walkable access to park-and-ride lots as well as the more traditional light rail and high frequency bus service.

Multifamily tax exemption bill emerges

SB 5287 has been introduced by Sen. Mona Das (D–Kent). The bill is this year’s attempt to make significant changes to the optional Multifamily Tax Exemption (MFTE) program. Many cities are already directly engaged with us on this policy. If your city offers—or desires to offer—the MFTE program, please review this bill and provide feedback by the end of the day on Monday, January 25.

There are too many changes to detail here, but highlights include:

• All cities and towns would be eligible to offer the program
• New affordability requirements in the 8-year program (15% of units must meet certain income thresholds);
• New affordability requirements in the 12-year program (25% of units must meet certain income thresholds);
• New 20-year program for permanently affordable home ownership;
• Temporary exemption from these provisions for the first two projects permitted after either the effective date of the new law or when a three-year rolling average of vacancy rates shows a vacancy at or below 1.5% (Note: There appears to be a drafting error in this section);
• Authority to offer a second 12-year exemption with income requirements;
• Requirements for tenants of income-restricted units that expire from the program to be provided with either continued rent reductions, relocation assistance, rent increase limitations, or for the unit to be converted to a condominium and sold as affordable housing;
• Density requirements for areas where MFTE is authorized;
• Profitability assessments required; and
• Expires in 2032 with a workgroup to recommend whether extension is justified.

Expanded authority for the optional 1/10 cent sales tax for affordable housing

HB 1070, from Rep. Cindy Ryu (D–Shoreline), provides for authority for the use of the optional housing sales tax to acquire affordable housing in addition to previous authority to construct such housing. It also provides that that housing can be geared towards homeless individuals as an expansion from a focus on homeless families with children.

“Streamlining” approval of engineered plans

SB 5243, sponsored by Sen. Chris Gildon (R–Puyallup), provides that cities may not impose substantial modifications or conditions on building permit submittals prepared, stamped, and signed by a licensed architect, landscape architect, soils engineer, civil engineer, or structural engineer. The building department may review for compliance with zoning and other land use control ordinances.  AWC needs feedback from cities on whether this measure is acceptable.

It would not be a housing update without a few mandatory and preemptory bills

SB 5235, sponsored by Sen. Marko Liias (D–Lynwood), addresses two different occupancy topics. It prohibits cities from requiring any housing unit on the same lot as an ADU to be occupied by the owner, unless that owner owns more than five ADUs within the same city. It also restricts the use of occupant limits on housing by cities that regulate or limit the number of unrelated persons who can occupy a household.

HB 1220, sponsored by Rep. Strom Peterson (D–Edmonds), requires cities to conduct an inventory of available housing stock at a variety of income levels, and prohibits cities from banning emergency housing, permanent supportive housing, or emergency shelters in multifamily, commercial, mixed use, or form-based zones where short-term rentals are allowed. Finally, it also requires a review of local policies, zoning, and ordinances that may have racially disparate impacts or displacement effects and then identify and implement strategies to correct them.

Dates to remember

HB 1070 is scheduled for public hearing in the House Finance Committee on Monday, January 25 at 10 am and is scheduled for a committee vote on Thursday at 8 am.

HB 1157 and HB 1220 will be heard in the House Committee on Local Government Committee on Wednesday, January 27 at 10 am.

SB 5235, SB 5243, and SB 5287 will be heard in the Senate Housing & Local Government Committee on Tuesday, January 26 at 8 am.

SB 5269 and SB 5312 are scheduled for public hearing in the Senate Committee on Housing & Local Government Committee on Wednesday, January 27 at 10:30 am.