Housing affordability and supply continues to be a focus, but are we focusing on the right parts of the problem?

The 2025 legislative session replicated many themes of recent sessions as it relates to promoting and supporting housing availability and affordability. That is to say, an extremely narrow focus on local development regulations and planning, with relatively sparse progress on increasing resources available to cities to support housing that won’t be constructed without public investment.

We saw bills on lot splitting and unit lot subdivision processes pass. Also advancing were another round of tweaks to laws promoting conversion of existing buildings to housing purposes, new laws restricting city authority to regulate exterior siding materials, and multiple forms of restrictions on city authority to require parking on-site as a condition of development. Bills were introduced to have the state oversee and approve housing regulations before they go into effect, to ensure cities follow the new laws the state has been passing. The final form of that housing accountability proposal ultimately became a voluntary option for cities to seek state approval, with follow-up audits based on housing production performance. These well-meaning proposals focus on the theory that by making marginal increases in development capacity or loosening regulatory measures, those savings will spur a boon of housing construction and cost savings will pass to the new occupants.

Conversely, for the more than 500,000 units the state has asked local governments to plan for in order to accommodate people making less than half of the area median income, action has been much more difficult to achieve. Nearly everyone agrees that these homes cannot be built by the private market as sale and rental rates at those income levels cannot recover the current costs of land and construction. Despite that, proposals to provide a local option short term rental tax and a proposal to close the tax loopholes enjoyed by the self-storage industry and to dedicate resources towards affordable housing did not make it through the Legislature. A small measure of progress was made by eliminating the sunset on the use of local real estate excise taxes (REET) on affordable housing purposes. Despite the lack of new dedicated revenues, the state capital budget continued recent trends of significant investments in the Housing Trust Fund.

Unfortunately, until the pendulum swings more heavily towards the direction of figuring out how we will generate the resources necessary to invest in housing affordable to our lower income neighbors, we may continue to see proposals that tinker around the margins that will never be truly sufficient to dig ourselves out of thehousing crisis.

*Implementation dates are based on Growth Management Act comprehensive planning timelines and vary between bills and planning jurisdictions.