As prospects appear to dim for Governor Inslee’s $4 billion housing referendum proposal, the long-awaited introduction of an alternative proposal to provide significant new revenues for both the state and local governments for affordable housing purposes is very welcome.

HB 1628 from Rep. Frank Chopp (D–Seattle) has two primary components:

• Creates a new tier of real estate excise tax (REET) collected by the state, increasing the current tax for the portions of property value exceeding $5,000,000 from 3% to 4%. That provision is projected to raise $200 million per year, with the bill allocating those funds to the Housing Trust Fund, the Apple Homes and Health Program, housing for those with developmental disabilities, and for operations & maintenance of permanent supportive housing facilities.
• Authorizes cities and counties to levy a new .25% local REET by council vote. At least 50% of funds must be used on capital construction or acquisition of new affordable housing units, and up to 50% can be used for operations and maintenance and services directly tied to permanent affordable housing purposes, and not for transitional, temporary or shelter services. Look at this spreadsheet to see projections from the Department of Revenue on how much this option could raise for your city.
• The income limits are projects serving 60% or less of the area median income (AMI) for rental housing, and 80% AMI for ownership housing.

We are also working to include authorization for some of these dollars to be used on infrastructure to support housing, and to harmonize the slightly different authorities with the underlying local REET eligible uses.

We know that we need to increase housing supply across the board; but without additional revenue for housing for the very low income, this type of housing will not be built by the private sector. And that is half our housing need.

Please sign in favorably on this bill before the hearing at 10:30 am on Tuesday, February 7. Please also share your support with your House members.

Dates to remember

HB 1628 is scheduled for public hearing in the House Local Government Committee on Tuesday, February 7 at 10:30 am.