The creative proposal by Rep. Jessica Bateman (D–Olympia) that would authorize cities to create a real estate excise tax (REET) density incentive zone is back from the dead and on the move. This zombie is one to run towards and lend your support!
The mandates in the previous version of HB 1157 have been stripped and the bill now sets out a voluntary path
that provides a funding source for affordable housing planning and infrastructure.
Under the proposal that passed the House, cities may designate one or more REET density incentive zones. Zones must at least allow single-family dwellings at a net density of six dwelling units per acre and allow specific types of missing middle housing,
including ADUs. Dwelling units that are constructed within the zone that exceed what could have been built under prior regulations count as a “qualified residential unit.” HB 1157 also sets restrictions on short-term rental
use for a unit to be eligible.
Eligible qualified residential units provide for a remittance to the city of a share of the state REET on the sale of the unit. The amounts distributed to a city may only be used for:
- Implementation of the housing element of the comprehensive plan under the GMA;
- Costs for infrastructure, construction, and service support for moderate, low, very low, and extremely low-income housing;
- Construction of capital facilities that promote livable and walkable neighborhoods; or
- Creation of permanently affordable homeownership.
The bill is in the Senate Ways and Means Committee and has until April 11 to pass the Senate.