Fourteen affordable housing bills, sponsored by a mix of Democrats and Republicans, have gotten, or are scheduled for, committee hearings in Olympia. Two of these bills, HB 2585 and SB 6211, have passed out of their original committees. Any bills that don’t get out of a policy committee by next Friday, February 5, are dead, barring any special procedures. Bills in the fiscal and transportation committees get until Tuesday, February 9.

Rep. Joan McBride
Rep. Joan McBride

House Bill 2395, by Rep. Joan McBride (D – Kirkland), would authorize cities to impose a fee on condominium conversions. The money collected from the fee would be deposited in a fund established by the city for affordable housing development.

The condominium conversion fee would be determined by multiplying the square footage floor area for all units in a residence by the following rates:
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For a 2 unit residence: up to $0.95 per square foot floor area;
For a 3 unit residence: up to $1.42 per square foot floor area;
For a 4 unit residence: up to $1.90 per square foot floor area;
For a 5 unit residence: up to $2.38 per square foot floor area;
For a 6 unit residence: up to $2.85 per square foot floor area;
For a 7 unit residence: up to $3.33 per square foot floor area;
For a 8 unit residence: up to $3.80 per square foot floor area;
For a 9 unit residence: up to $4.28 per square foot floor area;
For residences with 10 or more units: up to $4.75 per square foot floor area;

The fee would also apply to any condominium conversion on property owned by a city that is imposing the fee, unless it has adopted a suitable plan to develop affordable housing on the site or a suitable alternative site. Local housing authorities and local, regional, and statewide nonprofit housing organizations would be exempt from the conversion fee.

HB 2395 got a hearing on January 18 in the House Committee on Community Development, Housing & Tribal Affairs and is scheduled for committee action Monday afternoon.

HB 2397, by Rep. McBride, would authorize cities to impose a fee as a condition for a permit issued for the demolition of a residential dwelling. The demolition activity subject to the fee would be the removal or destruction of at least 90 percent of a structure or building, unless otherwise defined in the city’s building or zoning codes.

The fees collected would be deposited in an affordable housing fund established by the city and used to support affordable housing development. The fee would be limited to $5,000 per single-family residence and $2,500 per unit in a multi-family building, up to an aggregate total of $25,000.

There would be an exemption for a residence that will be replaced with a residence that is affordable to a household with an adjusted gross income of up to 120 percent of the area median income of the county, or if the residence is owner-occupied for at least five years before a demolition permit is issued and the owner will live in the replacement residence for at least five years.

The city would pay the same fee into the affordable housing fund for the demolition of any residence owned by the city, unless it has adopted a suitable plan to develop affordable housing on that property, or on a suitable alternative site. Local housing authorities and local, regional, and statewide nonprofit housing organizations would be exempt from the demolition fee.

HB 2397 was heard on January 18 in the House Committee on Community Development, Housing & Tribal Affairs and is scheduled for committee action Monday afternoon.

Rep. Sherry Appleton
Rep. Sherry Appleton

HB 2442, by Rep. Sherry Appleton (D – Poulsbo), would allow any city or county to create an Affordable Housing Incentive Zone to provide tax relief for property owners who provide affordable housing.

All property that provides affordable housing within the designated area would qualify for a 60 percent exemption in local property taxes. The exemption would apply only to the percentage of the property area that is used for affordable housing. Affordable housing would include any single-family home or multifamily unit rented to a person or family whose income is at or below 80 percent of the area median income. Rent is deemed affordable if it is not more than 30 percent of the renter’s monthly household income.

The exemption could be revoked if the property is no longer used for affordable housing, or is in violation of any health, building, fire, safety, housing, zoning, or land use codes.

HB 2442 was heard on January 19 in the House Committee on Community Development, Housing & Tribal Affairs and is not yet scheduled for committee action.

Rep. Noel Frame
Rep. Noel Frame

HB 2544, by Rep. Noel Frame (D – Ballard), would allow a city or county to create a local property tax exemption program to promote the preservation of affordable housing available for very low-income households. The tax exemption could apply for up to 15 consecutive years, but could be extended for an additional three years if the project meets certain energy standards.

The exemption would apply to certain multi-family properties if at least 25 percent of their units are rented at rates that are affordable to households with an income up to 50 percent of the median family income of the area. The threshold household income level could be lowered to serve severely low-income households, or raised up to 60 percent of the median family income in high property value areas. The affordability and occupancy requirements could be waived for up to three years for an incidental number of units occupied by over-income tenants at the time of the application. The multi family property would have to be part of a residential or mixed-use project and have a 90 percent occupancy rate. It would have to provide at least half of its space for permanent residents.

The city or county would be allowed to establish its own additional requirements, including a limit on the number of units eligible for the exemption, and designate target areas for affordable housing.

The tax exemption would be cancelled if the owner fails to meet the affordable housing requirements or intends to discontinue compliance, fails to complete a rehabilitation plan, or fails to substantially comply with any applicable building, safety, or health regulations.

HB 2544 was heard on January 19 in the House Committee on Community Development, Housing & Tribal Affairs and is scheduled for committee action Monday afternoon.

Rep. June Robinson
Rep. June Robinson

HB 2585, by Rep. June Robinson (D – Everett), would shift a portion of the state’s allowed private activity bond sales each year from student loans to the state’s Housing Finance Corporation. The student loan share would drop from 15% to 5%. The HFC’s share would increase from 32% to 42%.

A substitute version of HB 2585 passed out of the House Committee on Community Development, Housing & Tribal Affairs Thursday morning. The substitute bill changes the timing of a report. UPDATE: Substitute HB 2585 has passed out of committee and is now in the House Rules Committee, awaiting action to be scheduled for a floor vote.

Rep. Laurie Jinkins
Rep. Laurie Jinkins

HB 2647, by Rep. Laurie Jinkins (D – Tacoma), would allow cities to buy properties foreclosed on by the county for tax nonpayment, so long asŸ the city agrees to do so within 30 days of a notice of public auction, and the city then sells the property to a local housing authority or nonprofit for the same price, for the purpose of building affordable housing

HB 2647 was heard Tuesday in the House Committee on Community Development, Housing & Tribal Affairs and is scheduled for committee action Monday morning.

Rep. Jake Fey
Rep. Jake Fey

HB 2763, by Rep. Jake Fey (D – Tacoma), would push back the deadline for cities to create optional subarea plans, from 2018 to 2028. Once an optional subarea plan has gone through the State Environmental Policy Act (SEPA) process, individual developments within the subarea could not be subjected to SEPA appeals, provided the development sets aside at least 20 percent of dwelling units for sale or rental to low-income households at prices considered affordable by the city’s housing programs.

HB 2763 was heard in the House Committee on Environment Thursday and is scheduled for committee action Tuesday afternoon.
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    SENATE BILLS
King County Councilmember Jeanne Kohl-Welles
King County
Councilmember
Jeanne Kohl-Welles

SB 5378, by former Senator Jeannie Kohl-Welles (D – Belltown), would prohibit discrimination in renting or leasing property based on the applicant’s legal sources of income, and also outlaw expulsion for same. 12 states, as well as King County and Vancouver (WA) already have such a prohibition.

The bill remains alive from last session, even though the sponsor is no longer a state senator.

SB 5378 was heard on January 21 in the Senate Committee on Human Services, Mental Health & Housing, and is not yet scheduled for committee action.

Sen. Bruce Dammeier
Sen. Bruce Dammeier

SB 6211, by Sen. Bruce Dammeier (R – Puyallup), would exempt properties owned by non-profits from property taxes for the purpose of building and selling affordable housing (for households less than 80% of the median household income in that county), provided that the nonprofit entity sold at least one residence to a low-income household within ten years preceding the submission of an application for this exemption.

The exemption would expire after 8 years, or when the property is transferred. If the nonprofit believes that the title will not be transferred by the end of the sixth consecutive property tax year, the entity could claim a three-year extension by filing a notice with the Department of Revenue and providing a filing fee.

If the title has not been transferred within seven years and an extension has not been granted, the property would be disqualified from exemption, and back taxes would be collected.

SB 6211 passed out of the Senate Committee on Human Services, Mental Health & Housing on January 21 and heads next to the Senate Ways & Means Committee, where it will be heard on Tuesday, February 2, at 3:30 pm.

Sen. Joe Fain
Sen. Joe Fain

SB 6239, by Sen. Joe Fain (R – Auburn), is the companion to HB 2544.

SB 6239 was heard on January 18 in the Senate Committee on Human Services, Mental Health & Housing, and is scheduled for committee action Monday morning. UPDATE: Substitute SB 6239 passed out of committee and is headed to the Senate Ways & Means Committee, where is must get a hearing and positive committee vote by Tuesday, February 9.
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Sen. Karen Keiser
Sen. Karen Keiser

SB 6311, by Sen. Karen Keiser (D – Des Moines), “providing a property tax exemption for certain property within an affordable housing incentive zone” got its hearing on January 21, but only a proposed substitute version that has not yet been made available on the legislature’s website was discussed.

The proposed substitute bill would authorize counties to create, or allow cities in that county to create, affordable housing incentive zones.

Property within an incentive zone that provides affordable housing would be exempt from local property tax. All claims for exemption and renewal would have to be submitted by the owner of the property under penalty of perjury. Applications would include documentation that rents are affordable in each of the units for which an exemption is sought and households in those units have an annual income at or below 80 percent of the area’s median income. Rent would be considered affordable if including utilities other than telephone, the rent does not exceed 30 percent of the monthly household income of persons at 80 percent of the area median income. The affordable housing units would have to meet health, building, fire, safety, housing, zoning, and land use codes.

If a unit identified is no longer eligible for a property tax exemption, the property owner would have to notify the county assessor within 60 days of not being eligible. Upon revocation of the exemption, the county treasurer would collect all taxes that otherwise would have been paid had the exemption not been granted, along with interest.

Proposed Substitute SB 6311 is not yet scheduled for action in the Senate Committee on Human Services, Mental Health & Housing..

Sen. Jeannie Darneille
Sen. Jeannie Darneille

SB 6337, by Sen. Jeannie Darneille (D – Tacoma), is the companion to HB 2647.

SB 6337 was heard on January 21 in the Senate Committee on Human Services, Mental Health & Housing, and is scheduled for committee action Monday morning..
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Sen. Mark Miloscia
Sen. Mark Miloscia

SB 6342, by Sen. Mark Miloscia (R – Federal Way), is the companion to HB 2585.

SB 6342 was heard Wednesday afternoon in the Senate Committee on Financial Institutions & Insurance, and is not yet scheduled for committee action.

SB 6422, by Sen. Miloscia, adds a number of reporting requirements around the state’s Affordable Housing for All Account, for quality control and focus on providing housing for very-low-income households.

SB 6422 is scheduled for a hearing Monday at 10 am in the Senate Committee on Human Services, Mental Health & Housing.

14 Replies to “12 Housing Bills Face February 5 Committee Deadline”

  1. HB 2395 is interesting. I’m pretty sure that most houses demolished in Seattle are replaced by other houses. This would basically tax that. When it comes to houses being demolished for apartments, this is really a drop in the bucket. Five grand really isn’t that much. If a small apartment is being torn down for a big one, chances are very high the new apartment has a lot more units. The other action this taxes is a house (or bunch of houses) being torn down for an office building. But again, that is a small tax (relative to other costs).

    In general I’m no fan of specific taxes like this — I think we should have much broader taxes (why tax construction, one of the more middle class businesses out there?) but I don’t see this as being that bad. For the most part, this is a “monster home” tax, which is just a specialized form of a luxury tax. That sounds a lot better than most of the proposals for raising money like this.

    1. One of the more interesting things about the bill is that it creates a reasonable definition of “new”.

      The demolition activity subject to the fee would be the removal or destruction of at least 90 percent of a structure or building, unless otherwise defined in the city’s building or zoning codes.

      I like having a definition because I want to apply that definition elsewhere. One of the arguments against changing the zoning in single family neighborhoods is that you would lose a lot of homes, and thus the character of neighborhoods. I have a lot of sympathy for this argument. I think there are a lot of very nice houses in Seattle, and I would hate to lose them. I have no sympathy for the other arguments defending the status quo (loss of parking or just too many people in the neighborhood). But people who want to see old houses preserved have a point. This bill would discourage that, through taxing (whether the house is torn down for an apartment or a new house).

      But it also sets up the possibility of adding a restriction to new up zones. Imagine if every single family neighborhood was zoned multi-family, but not allowed to tear down the old house for that purpose. Get rid of the parking and other silly restrictions that exist for apartments or ADUs (whether attached or detached). Now you basically allow conversions, which is one of the cheapest ways to add density. That big house in Wallingford just gets converted to an apartment.

      You would have to have a similar “five year rule” to prevent people from taking advantage of the loophole. You don’t want a guy tearing down a house, then putting up a new “house” that is obviously an apartment, which he then “converts”. With this bill, he would have to pay the five grand (no matter what he built). But I would also restrict him from converting it for five years. His house would be zoned single family for that time.

      Personally I think this would provide a great balance between preservationists and those who want to see more density. I’m curious as to what people think.

      1. I have no sympathy for the other arguments defending the status quo (loss of parking or just too many people in the neighborhood). But people who want to see old houses preserved have a point.

        The problem is, what makes your belief that maintaining older houses any more valid than loss of parking or increased population? I, for one, don’t like the look of older houses. This isn’t just me playing devil’s advocate here; the “stately manor in Wallingford” looks ugly to me and I’d be happy to see it torn down and replaced with a modern-style building.

        I also object to the time frame for this tax. For example, from real life: I’ve owned my “quaint Craftsman” for a little over two years. Let’s say this year is really good for me at work and I get a really nice raise and a hefty bonus and can now pursue my dream of building my own modern-style house on land that I own and that meets the definition of what is allowed on it. Problem is, I’m now taxed for doing so because I dared not own my house for five years. Even if I had owned it for that long, why am I now locked into staying put for another five years, lest I be penalized $5,000 for, say, moving away to take another job and either renting or selling my house? Freezing mobility–the only way to not pay the tax would be to have a total of ten years invested in a property–isn’t good for our economy.

      2. There are three arguments here. The first is parking. If you force new only new units to have parking (and that is the way it works now), then you are essentially enacting a parking tax paid for only by renters. Not just the people who move there, but anyone who rents (because it pushes up the cost of rent). This is hardly fair.

        Likewise with a restriction on density. I hardly think it is fair to say that just because you managed to afford to live in a place, other people who want to move in can’t (or have to pay more for the privilege).

        The third argument is of course an aesthetic one. But if you look at the history of zoning and zoning changes in Seattle, you can see why people feel this way. There is no accounting for taste, but I think most people would consider the duplexes and quads built in the 80s (in Ballard for example) to be very ugly. They tend to be very boring. Boring architecture, boring landscaping (typically dominated by asphalt). It is this ugliness that drives a lot of the desire to keep single family neighborhoods the same. When they destroy houses like this: http://www.capitolhillseattle.com/2012/10/capitol-hill-house-standing-since-1890-wont-get-landmark-protection/, I think the preservationists have a point.

        These are trade-offs. I would be OK with allowing a lot more development, but I also can see why you wouldn’t want to swing the pendulum in that manner.

        Nor do I think it essential to do so. Conversions are a very cheap way to increase density. Given our city (where SF zones dominate) we would see a rapid increase in density while at least compromising on this issue. I don’t think that is necessary or even desirable with the other issues. I see no reason to have renters pay a parking tax. The opponents of density are simply arguing what a lot of people want to achieve (lower rents). Both seem unfair, but allowing density while preserving structures seems like a good compromise.

        As for your last point, that is a good point. My guess is this tax would be eased in. It would take place after five years, meaning anyone who planned on tearing down their house would know the rules when they bought it. If not, then it is still a fairly small price to pay for the tear down. I also think what you describe is rare. Almost everyone who lives in a tear down never lived on the old property. So this would simply be a $5,000 tax on the new owner. When shopping for houses, those houses would be $5,000 more. As I said, I’m not a huge fan of taxes like this, but I also don’t see that as onerous (it is just a randomly applied luxury tax).

        But the other law (what I’m proposing) is different. If could go in immediately, since it would only apply to a change that right now is illegal (converting a house to an apartment).

      3. Does the demolition tax really accomplish anything much? It seems to me it’s playing a shell game of seapping one hidden object eith snother when what is really needed is a truckload of walnuts with actual food in them.

      4. Gah. I really need to learn to never write a response on Seattle Transit Blog while actually on transit, especially transit that features speed bumps on the street, especially not while using a device with touch screen.

        seapping = swapping

      5. Glenn,

        Actually I think you’ve got a really good neologism: “seapping: p. typing on a mobile device while riding a transit vehicle down Seattle’s pothole-strewn streets. Ex: I seapped the other day and nobody could read my post!”

    1. There are apartment buildings that were built recently and are being built to become condominiums sometime in the near future. Conversion is the key word.

      My understanding is apartments don’t have the building liability issues of condos. Developers will build apartments with the goal of coverting them to condominiums once a defined legal threshold (I believe it’s 5 years) has passed. Once the threshold has been met condominium conversion can occur and the developer is not liable for the building construction.

      I think this bill has some great foresight to what the next 10 years will look like, and I think the cost per square foot could go up and not really impact the conversion and profits for developers.

      1. I hope you’re right because I’d much rather live in a 2 bedroom condo in Ballard than a SFH in the Central District. On the other hand, I suspect that it will be an academic exercise since the possibly-to-be-converted condos will be just as expensive as the handful that exist today.

      2. I saw a sign on Pine Street around 8th Avenue this weekend, “Condos, upper $400,000s”. So that seems to be the maximum baseline, given that downtown will always be the most expensive.

        My mind boggles that anybody would pay $450K+ for a condo, or for a house either.

      3. I’m thrilled that I didn’t pay anywhere near that much for mine but its appraised value for a mortgage refinance is creeping close to that number. When you have limited supply and a desirable city–and I happen to think that Seattle, all parts, is pretty dang desirable–that’s usually the result. People with the money get the residences and people without the money get the astonishing commute.

  2. Some good points Wes, about, basically, what homes are like to be around. This is a rough one. Through history, like with clothing, appreciation of building styles change. For instance, many buildings now on the historic record were loathed when first constructed as being out of scale,kitschy, and ridiculous.

    Critics demanded to know what the Greek Parthenon was doing fifty stories in the air surrounded by gargoyles and mermaids. The world demanded new, clean, spare rectangles. We’re talking,like, 1919 here. Which a few decades later demanded to be replaced by gentler forms.

    Can’t suggest architectural review board- too many examples of what these things approve. Though, like cursive handwriting (serious- shout-out to State Senator Pam Roach for trying to get this mandated in schools!) maybe mandatory art and architecture history should be taught in schools to breed better panels.

    But right now, good rule of thumb is that anything that looks like where San Jose VTA goes into Mountain View should be illegal. One wrong turn in Dupont yesterday morning left me driving around for half an hour trying to find the transit center, with Twilight Zone background music.

    If it looks like it was designed by aliens trying to blend in with humans, like in The Body Snatchers- mail plans stamped “approved” back to Zorkon, with note on envelope saying “Wrong address, return to sender.”

    Mark

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