AN ACT Relating to affordable housing; adding a new chapter to Title 43 RCW; making an appropriation; and providing an effective date.

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

NEW SECTION. Sec. 1. This chapter may be known and cited as the self-help housing act.

NEW SECTION. Sec. 2. The legislature finds that the lack of affordable housing has become a growing problem, especially for low-income Washington households; that the rise in housing costs has a disproportionate and unfair effect on families with children and young adults trying to purchase a first home; that in the period from 1983 to 1987, national home ownership rates for persons twenty-five to thirty-four years old have declined, and that high housing costs, reflected in large downpayment requirements and substantial monthly payments, is the major barrier to home ownership for low-income households.

The legislature further finds that home ownership opportunities for low-income households can be increased through the use of a variety of "self-help" housing techniques whereby a person or household provides all or a substantial amount of the labor necessary to build or rehabilitate a unit that will be the principal residence of that person or household. A significant number of low-income households are capable of building or rehabilitating their homes, in whole or in part, with considerable savings to themselves and benefits to the public.

NEW SECTION. Sec. 3. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Department" means the department of community development.

(2) "Director" means the director of community development.

(3) "Low-income household" means a person or household whose adjusted income is at or below eighty percent of the median household income, adjusted annually by the United States department of housing and urban development, for the county or standard metropolitan statistical area where the project is located.

(4) "Owner-builder" means any person or household who provides all, or a substantial amount as determined by the department, of the labor necessary to build a housing unit that will be the principal residence of that person or household.

(5) "Owner-building" means the process engaged in by owner-builders in the construction of their own housing.

(6) "Self-help rehabilitator" means any person or household who provides all, or a substantial amount as determined by the department, of the labor necessary to rehabilitate, renovate, or improve that person's or household's principal residence.

(7) "Self-help rehabilitation" means the process engaged in by the self-help rehabilitators in the rehabilitation, renovation, or improvement of their principal residences.

NEW SECTION. Sec. 4. The department shall:

(1) Encourage and facilitate the collective construction or rehabilitation of housing using various self-help techniques by making grants to nonprofit organizations for the purpose of assisting low-income self-help rehabilitators or owner-builders. Activities eligible for assistance include, but are not limited to:

(a) New construction, rehabilitation, or acquisition and rehabilitation of housing units for low-income households;

(b) Land acquisition for the purpose of new construction of housing units for low-income households;

(d) Technical assistance, design, and finance services and consultation: PROVIDED, That the grant award shall not be used for administrative costs of the nonprofit organization.

(2) Select local owner-building and self-help rehabilitation projects for the purpose of this chapter. In selecting projects, the department shall consider:

(a) The project manager's capacity to manage the activities required in a self-help housing project;

(b) Financial resources necessary to complete the project in a timely fashion; and

(3) In selecting projects for funding, the department shall give priority to:

(a) Projects that are located in areas not eligible for assistance through programs of the United States farmers home administration; and

(b) Projects that, to the greatest extent feasible, assist households with incomes at or below fifty percent of median income, adjusted annually by the United States department of housing and urban development, for the county or standard metropolitan statistical area where the self-help housing project is located.

NEW SECTION. Sec. 5. The department may receive such gifts, grants, and endowments from public and private sources as may be made from time to time, in trust or otherwise, for the use and benefit of the purposes of this chapter and expend the same or any income therefrom according to the terms of the gifts, grants, or endowments.

NEW SECTION. Sec. 6. The director shall report to the governor and the legislature on the results of the self-help housing project by November 1, 1990. The report shall include, but not be limited to the results of the individual projects funded, number of persons served, and recommendations for improvement or continuation of the self-help housing program.

NEW SECTION. Sec. 7. The department may adopt rules to implement this chapter.

NEW SECTION. Sec. 8. The sum of five hundred thousand dollars, or so much thereof as may be necessary, is appropriated for the biennium ending June 30, 1991, from the state general fund to the department of community development for the purpose of making grants to eligible organizations and for other costs administering the self-help housing program.

NEW SECTION. Sec. 9. Sections 1 through 7 of this act shall constitute a new chapter in Title 43 RCW.

NEW SECTION. Sec. 10. This act shall take effect July 1, 1989. The director of community development may immediately take such steps as are necessary to ensure that this act is implemented on its effective date.