BILL REQ. #:  H-3987.1 

Read first time 01/17/2006.   Referred to Committee on Local Government.

     AN ACT Relating to affordable housing incentive programs; amending RCW 82.02.020; adding a new section to chapter 36.70A RCW; and creating new sections.

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

NEW SECTION.  Sec. 1   The legislature finds that as new market rate housing developments are constructed and housing costs rise, there is a significant and growing number of low-income households that cannot afford market rate housing in Washington state. The legislature finds that assistance to low-income households that cannot afford market rate housing requires a broad variety of tools to address this serious, statewide problem. The legislature further finds that absent any incentives to provide low-income housing, market conditions will result in housing developments in many areas that lack units affordable to low-income households, which can cause adverse socioeconomic effects. The legislature encourages cities, towns, and counties to enact or expand affordable housing incentive programs, including density bonuses and other incentives, to increase the availability of low-income housing for renter and owner occupancy located in largely market rate housing developments throughout the community consistent with local needs and adopted comprehensive plans. While this act provides minimum standards for those cities, towns, and counties choosing to implement or expand upon an affordable housing incentive program, cities, towns, and counties are encouraged to enact programs that address local circumstances and conditions while contributing to the statewide need for additional low-income housing.

NEW SECTION.  Sec. 2   A new section is added to chapter 36.70A RCW to read as follows:
     (1) Any city or county planning under RCW 36.70A.040 may enact or expand affordable housing incentive programs that encourage or require the development of low-income housing units through development regulations. An affordable housing incentive program may include, but is not limited to, density bonuses within the urban growth area, height bonuses, conditions on permits for commercial, mixed-use, or multifamily developments, fee waivers or exemptions, parking reductions, exemptions from development regulations, or expedited permitting, conditioned on provision of low-income housing units. The city or county may enact or expand such programs whether or not the programs may impose a tax, fee, or charge on the development or construction of property.
     (2) Affordable housing incentive programs that are enacted or expanded after the effective date of this act shall comply with the following:
     (a) The incentives or bonuses shall encourage or require the construction of low-income housing units;
     (b) Jurisdictions shall set requirements for low-income renter or owner occupancy housing, including income guidelines consistent with local housing needs, with the intent of assisting low-income households that cannot afford market rate housing. Low-income households are defined for renter and owner occupancy program purposes as follows: Rental housing units to be developed shall be affordable to and occupied by households with an income of no more than fifty percent of the county median family income adjusted for family size; and owner occupancy housing units shall be affordable to and occupied by households with an income of no more than eighty percent of the county median family income adjusted for family size. A jurisdiction's legislative body, after holding a public hearing, may set lower income levels. A jurisdiction's legislative body after holding a public hearing may also set higher income levels for rental housing, up to eighty percent of the county area median family income, or for owner occupancy housing, up to one hundred percent of the county area median family income, upon finding that higher income levels are needed to address local housing market conditions;
     (c) The jurisdiction shall set a maximum rent level or sales price for each low-income housing unit developed under the terms of a program, which may provide for adjustment based on the average size of the household expected to occupy the unit. For renter-occupied housing units, the total housing costs, including basic utilities as determined by the jurisdiction, shall not exceed thirty percent of the income limit for the low-income housing unit;
     (d) Low-income housing units shall be of comparable quality to the other units in the housing projects developed under a program;
     (e) The low-income housing units developed under an affordable housing incentive program shall be committed to continuing affordability for at least fifty years; however, a local government may accept payments in lieu of continuing affordability. The program shall include measures to enforce continuing affordability and income standards, which may include, but are not limited to, covenants, options, or other agreements to be executed and recorded by owners and developers, which shall be enforceable by the local government and shall run with the land and bind successors in interest, notwithstanding common law requirements for running covenants and common law rules respecting restraints on alienation;
     (f) Programs authorized under subsection (1) of this section may cover part or all of a jurisdiction and different requirements may apply to different parts of a jurisdiction. Programs authorized by this section may be tailored to meet local needs and include provisions or requirements not expressly provided in this act; and
     (g) Required low-income housing units are encouraged to be provided within market rate housing developments for which a bonus or incentive is provided; however, programs may allow payments in lieu of low-income housing units, as long as the payment amounts to approximately the cost of developing the same number and quality of housing units that would otherwise be developed. Any city or county may use such funds to support the development of low-income housing, including support through loans or grants to public or private owners or developers of housing.

Sec. 3   RCW 82.02.020 and 2005 c 502 s 5 are each amended to read as follows:
     Except only as expressly provided in chapters 67.28 and 82.14 RCW, the state preempts the field of imposing taxes upon retail sales of tangible personal property, the use of tangible personal property, parimutuel wagering authorized pursuant to RCW 67.16.060, conveyances, and cigarettes, and no county, town, or other municipal subdivision shall have the right to impose taxes of that nature. Except as provided in RCW 82.02.050 through 82.02.090, no county, city, town, or other municipal corporation shall impose any tax, fee, or charge, either direct or indirect, on the construction or reconstruction of residential buildings, commercial buildings, industrial buildings, or on any other building or building space or appurtenance thereto, or on the development, subdivision, classification, or reclassification of land. However, this section does not preclude dedications of land or easements within the proposed development or plat which the county, city, town, or other municipal corporation can demonstrate are reasonably necessary as a direct result of the proposed development or plat to which the dedication of land or easement is to apply.
     This section does not prohibit voluntary agreements with counties, cities, towns, or other municipal corporations that allow a payment in lieu of a dedication of land or to mitigate a direct impact that has been identified as a consequence of a proposed development, subdivision, or plat. A local government shall not use such voluntary agreements for local off-site transportation improvements within the geographic boundaries of the area or areas covered by an adopted transportation program authorized by chapter 39.92 RCW. Any such voluntary agreement is subject to the following provisions:
     (1) The payment shall be held in a reserve account and may only be expended to fund a capital improvement agreed upon by the parties to mitigate the identified, direct impact;
     (2) The payment shall be expended in all cases within five years of collection; and
     (3) Any payment not so expended shall be refunded with interest to be calculated from the original date the deposit was received by the county and at the same rate applied to tax refunds pursuant to RCW 84.69.100; however, if the payment is not expended within five years due to delay attributable to the developer, the payment shall be refunded without interest.
     No county, city, town, or other municipal corporation shall require any payment as part of such a voluntary agreement which the county, city, town, or other municipal corporation cannot establish is reasonably necessary as a direct result of the proposed development or plat.
     Nothing in this section prohibits cities, towns, counties, or other municipal corporations from collecting reasonable fees from an applicant for a permit or other governmental approval to cover the cost to the city, town, county, or other municipal corporation of processing applications, inspecting and reviewing plans, or preparing detailed statements required by chapter 43.21C RCW.
     This section does not limit the existing authority of any county, city, town, or other municipal corporation to impose special assessments on property specifically benefitted thereby in the manner prescribed by law.
     Nothing in this section prohibits counties, cities, or towns from imposing or permits counties, cities, or towns to impose water, sewer, natural gas, drainage utility, and drainage system charges: PROVIDED, That no such charge shall exceed the proportionate share of such utility or system's capital costs which the county, city, or town can demonstrate are attributable to the property being charged: PROVIDED FURTHER, That these provisions shall not be interpreted to expand or contract any existing authority of counties, cities, or towns to impose such charges.
     Nothing in this section prohibits a transportation benefit district from imposing fees or charges authorized in RCW 36.73.120 nor prohibits the legislative authority of a county, city, or town from approving the imposition of such fees within a transportation benefit district.
     Nothing in this section prohibits counties, cities, or towns from imposing transportation impact fees authorized pursuant to chapter 39.92 RCW.
     Nothing in this section prohibits counties, cities, or towns from requiring property owners to provide relocation assistance to tenants under RCW 59.18.440 and 59.18.450.
     Nothing in this section limits the authority of counties, cities, or towns to implement programs consistent with section 2 of this act, nor to enforce agreements made pursuant to such programs.
     This section does not apply to special purpose districts formed and acting pursuant to Titles 54, 57, or 87 RCW, nor is the authority conferred by these titles affected.

NEW SECTION.  Sec. 4   The powers granted in this act are supplemental and additional to the powers otherwise held by local governments, and nothing in this act shall be construed as a limit on such powers.