HOUSE BILL REPORT

HB 1601

BYRepresentatives Wineberry, Locke, Armstrong, Anderson, Hine, Ferguson, Nutley, Ebersole, Valle and Nelson.

Authorizing local governments to require relocation assistance payments from low-income housing owners.

House Committe on Housing

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (8)

      Signed by Representatives Nutley, Chair; Leonard, Vice Chair; Armstrong, Barnes, Sanders, Todd, J. Williams and Wineberry.

House Staff:Kenny Pittman (786-7392)

AS REPORTED BY COMMITTEE ON HOUSING FEBRUARY 4, 1988

BACKGROUND:

Present statutes prohibit counties, towns, or other municipal corporations from imposing any tax or fee on the construction or improvement of buildings or the development of land, unless specifically authorized.

One possible approach to the problem of decreasing residential units for low-income persons, particularly in urban areas, is to require some form of payment from the developer.  This payment is usually assessed when development occurs that destroys or removes units occupied by low-income persons.  The municipal corporation may require relocation assistance, additional housing, or a deposit into a fund for low-income housing by the developer, in return for approval of the proposed development.

The State Supreme Court has held that an ordinance that has as its primary purpose to provide a public benefit and not to regulate is a tax.  A Seattle ordinance which required a developer to provide additional housing or pay into a fund for low income housing was held to be a tax by the State Supreme Court.

The State Supreme Court has also held that a municipal corporation has no authority to levy taxes other than when expressly granted by statute.

Counties, cities, towns, or municipal corporations that require relocation assistance to tenants, in return for development that reduces low income housing may also require expressed statutory authority.

SUMMARY:

SUBSTITUTE BILL:  The Low-Income Housing Preservation Task Force is created.  The task force shall be composed of eighteen members appointed by the Director of the Department of Community Development to consist of:  (a) six representatives of cities; (b) two representatives of counties; (c) one representative of the Seattle Master Builders; (d) one representative of the Home Builders Association; (e) two representatives of realtors; (f) two representatives of Building Owners and Managers Association: (g) two representatives of financial institutions that provide development financing; (h) one representative of the Department of Community Development, as an ex officio, nonvoting member; and (i) one representative selected by the task force to act as chairperson, and shall be a nonvoting member, except in the case of ties.

The task force is to:  (a) conduct a comprehensive examination of the loss of low-income housing caused by, but not limited to demolitions, conversion activities to different uses, and local development pressures; (b) determine strategies and methods for replacing and preserving the existing low-income housing stock including, but not limited to development fees, relocation fees to displaced tenants, replacement housing, and revisions to state property tax policies; (c) take any action related to carrying out the purpose of the task force; and (d) provide a written report to the House Committee on Housing and Senate Governmental Operations committees by September 1, 1988 that presents the findings and recommendations of the task force.

Staffing for the task force is provided through the members.

Members of the task force will receive no compensation. The task force expires July 1, 1989.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  The original bill would have provided statutory authority to allow counties, cities, towns, or municipal corporations to require that reasonable tenant relocation assistance be given by property owners who demolish or change the use of residential structures.

Fiscal Note:      Requested January 21, 1988.

House Committee ‑ Testified For:    Charles Royer, Mayor, City of Seattle; Representative Gary Locke; Representative Jesse Wineberry; and Sylvie McGee, Washington Coalition for the Homeless.

House Committee - Testified Against:      Enid Layes, Home Builders Association of Washington; Richard Chapin, Attorney; and Ron Taber, Developer.

House Committee - Testimony For:    The loss of low-income housing due to growth of the downtown is a major problem.  Huge cuts in the federal budget has hurt many areas that are trying to provide housing for low-income households. We are not asking the state for an appropriation, only the authority to keep or develop a local housing preservation ordinance that would require those that remove housing that is occupied by low-income households to replace what they remove from the existing stock.

House Committee - Testimony Against:      The requiring of impact fees to replace the loss of low-income housing is placing an unfair tax on the development community.  The fees could make a project no longer feasible, from a development standpoint.  There are other methods to the resolve the problem of low-income housing that should be explored.