BILL REQ. #:  S-3481.1 

Read first time 01/14/2004.   Referred to Committee on Land Use & Planning.

     AN ACT Relating to restoring the American Dream by eliminating impact fees in counties and cities in counties where the first time home buyer housing affordability index shows that housing is not affordable; amending RCW 82.02.100; adding new sections to chapter 82.02 RCW; and creating a new section.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   The legislature finds that first time home buyers in Washington state have been priced out of the housing market in many counties. The legislature finds that many organizations, including local governments, have recognized the affordable housing crisis for first time home buyers. The legislature finds that, for example, as reported in King county's benchmark growth report, "buying a first home remains extremely difficult for those under 120% of median income." The legislature further finds that impact fees contribute to the high cost of housing in many Washington counties, and that eliminating these fees will reduce housing prices. The legislature intends to make housing more affordable for first time home buyers in counties where housing is currently not affordable for first time home buyers. The legislature intends to do this by eliminating impact fees in counties where the "first time buyer housing affordability index" demonstrates that housing is not affordable for first time home buyers.

NEW SECTION.  Sec. 2   A new section is added to chapter 82.02 RCW to read as follows:
     (1) As used in this chapter, the "first time buyer housing affordability index" means the index determined by the Washington center for real estate research that measures the ability of a typical renter household to afford the purchase of a typical starter home by assuming: (a) The household will purchase a home priced at eighty-five percent of area median with a ten percent down payment; (b) the home mortgage loan is for a term of thirty years at the prevailing average fixed rate of interest; (c) the potential first time home buyer earns seventy percent of the area median household income and twenty-five percent of household income can be used for principal and interest payments.
     (2) For purposes of this chapter, a "first time buyer housing affordability index" of: (a) One hundred indicates that a household of the defined income can afford a home of the defined price; (b) less than one hundred indicates that a household of the defined income cannot afford a home of the defined price without spending more than twenty-five percent of their income on mortgage payments; and (c) greater than one hundred indicates that a household of the defined income can afford a home of the defined price while spending less than twenty-five percent of their income on mortgage payments.

NEW SECTION.  Sec. 3   A new section is added to chapter 82.02 RCW to read as follows:
     (1) In any county in which the first time buyer housing affordability index, as defined in section 2 of this act and as determined by the Washington center for real estate research at Washington State University, is less than one hundred for three-quarters in any given year, the county and cities located within the county shall not collect impact fees under this chapter for the following two years.
     (2) The year-long period measured by the Washington center for real estate research under subsection (1) of this section shall begin and end in the third quarter of the calendar year. The time period for which the ability to collect impact fees under this chapter is suspended under subsection (1) of this section shall begin January 1 of the year following the determination by the Washington center for real estate research.

Sec. 4   RCW 82.02.100 and 1992 c 219 s 2 are each amended to read as follows:
     (1) A person required to pay a fee pursuant to RCW 43.21C.060 for system improvements shall not be required to pay an impact fee under RCW 82.02.050 through 82.02.090 for those same system improvements.
     (2) A county prohibited from imposing a fee for system improvements under section 3 of this act may not impose a fee under RCW 43.21C.060 for those same system improvements.
     (3) A county prohibited from imposing a fee for system improvements under section 3 of this act may not require a dedication of land under RCW 58.17.110 for those same system improvements.