HOUSE BILL REPORT

HB 2684

BYRepresentatives Phillips, Locke, Leonard, O'Brien and Wineberry

Providing for relocation assistance for low-income tenants.

House Committe on Housing

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (6)

      Signed by Representatives Nutley, Chair; Leonard, Vice Chair; Winsley, Ranking Republican Member; Anderson, Rector and Todd.

Minority Report:  Do not pass.  (3)

      Signed by Representatives Ballard, Inslee and Padden.

House Staff:Kenny Pittman (786-7392)

AS REPORTED BY COMMITTEE ON HOUSING FEBRUARY 1, 1990

BACKGROUND:

The loss of low-income housing through development pressures has become a problem in areas of the state that are experiencing rapid growth.  The loss of this housing through demolition, conversion to higher income residential use, or change of use of residential property places a burden on the low-income tenants who must try to find affordable replacement housing.

Some cities have tried to address this problem by requiring owners that change the use of low-income housing to provide replacement housing or relocation assistance.  This is accomplished through either a tax or fee, in return for approval of the development that reduces the amount of available low-income housing.

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

Present statutes prohibit counties, cities, and 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.

SUMMARY:

SUBSTITUTE BILL:  Counties, cities, towns, or municipal corporations (governmental bodies), are authorized to require property owners to pay relocation assistance to low-income tenants.  The relocation assistance would be required when owners demolish, substantially rehabilitate whether due to code enforcement or any other reason, or change the use of residential structures including the filing of a condominium declaration, or upon the removal of use restrictions in an assisted-housing development.  The requirement for relocation assistance payments applies only to low-income tenants except in the case of a condominium conversion.

Low-income tenants are defined as tenants with a total household income at or below 80 percent of the county median income, adjusted for household size.

Assisted housing development is defined as a multifamily housing development that receives either federal, state, or local government assistance in order to make the units affordable to low-income tenants.

The state Department of Community Development is responsible for determining county median incomes.

Counties, cities, towns, or municipal corporations are required to provide reasonable notice to the public and hold a public hearing on the proposed demolition, substantial rehabilitation, or change of use of the residential structure or upon the removal of use restrictions in an assisted housing development.

The amount of relocation assistance provided to the tenant is based on reasonable expenses including, but not limited to:  (a) actual physical moving costs, (b) first and last month's rent and security deposits for a new residence, (c) utility connection fees and deposits, and (d) the difference between the existing rent and utilities and the new rent and utilities for a one year period.

The maximum relocation assistance payment to a low-income tenant is limited to $3,000 for each household displaced by actions of the property owner.  Adjustments can be made to the maximum amount of relocation assistance to reflect changes in the cost of living as indicated by the Consumer Price Index for the area.

Low-income tenants may be eligible for temporary or permanent relocation assistance.  The relocation would be required if the substantial rehabilitation will require the tenant to relocate from the building and the rent will increase more than 20 percent after the rehabilitation.

Tenants moving into a dwelling unit after proper notification has been given by the property owner that tenants will have to move due to demolition, substantial rehabilitation, or change of use of residential property, are not eligible for relocation assistance.

Counties, cities, towns, or municipal corporations that require relocation assistance must adopt policies, procedures, or regulations regarding relocation assistance. This must include provisions for administrative hearings within 30 days, to resolve relocation assistance related disputes between tenants and property owners.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  The substitute bill places a limit on the maximum relocation assistance payment to a low-income tenant to $3,000, with adjustments to reflect increases in the Consumer Price Index for the area.

Fiscal Note:      Available.

House Committee ‑ Testified For:    Representative Larry Phillips (Sponsor); Mike Ryherd, Low-Income Housing Congress; Andrea Dahl, Association of Washington Cities; David Moseley, City of Seattle; Mike Piper, Department of Community Development; Steve Fredrickson, Evergreen Legal Services (with concern); Ken Katahira, Seattle Housing Development Consortium; and Larry Faulk, Martin Luther King Ecumenical Center.

House Committee - Testified Against:      Fred Brune and John Woodring, Washington Mobile Park Owners Association; Tom Sante, Building Owners and Managers Association; Carroll Duval, Apartment Association of Seattle/King County; Pam Barrett and Jeff Powell, Washington Association of Realtors.

House Committee - Testimony For:    The displacement issue is a problem in Seattle and other parts of the state.  Local governments are doing what they can, but they need enabling legislation to address this issue at the local level.  Requiring a relocation assistance payment would help displaced tenants find new suitable housing.  Relocation payments should be considered a cost of development of the property just like site preparation.

House Committee - Testimony Against:      This is a societal problem that needs a societal solution.  Requiring relocation assistance from property owners is penalizing those in the business of providing housing.  It appears that a single industry is being singled out to address a broad based problem.  However, any solution to this problem must be statewide and not left to local option.