BILL REQ. #:  H-4725.2 

Read first time 01/24/08.   Referred to Committee on Local Government.

     AN ACT Relating to clarifying the authority of local governments to use incentives for commercial and industrial development to promote production and preservation of affordable housing; amending RCW 82.02.020; adding a new section to chapter 36.70A RCW; creating new sections; and providing an effective date.

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

NEW SECTION.  Sec. 1   The legislature finds that the affordable housing shortage constitutes a danger to the health, safety, and welfare of all residents of the state, and is a barrier to sound growth and sustainable economic development for the cities and counties. As new commercial and industrial development generates new jobs, it also creates demand for low and moderate-income housing not met by market rate housing development in many parts of Washington state.
     Therefore, the legislature finds that if local jurisdictions provide zoning incentives to commercial and industrial development to provide low and moderate-income housing, more jobs can be created in areas that will have units affordable to low and moderate-income households and more employees can live closer to their jobs. The growth management act encourages innovative land use management techniques such as density bonuses. Enacting more specific authorization for zoning incentives for commercial and industrial development to provide affordable housing will encourage greater use of such incentives to achieve the purposes of the growth management act.

NEW SECTION.  Sec. 2   A new section is added to chapter 36.70A RCW to read as follows:
     (1) A city or county planning under RCW 36.70A.040 may use incentive zoning for commercial or industrial development to increase the availability of affordable housing, or to preserve affordable housing, or both, within the jurisdiction.
     (2) For the purposes of this section, "incentive zoning" means any development regulations, conditional rezones, or development approvals that allow greater building height, more development capacity, different uses, or more relaxed development standards, than otherwise would apply to a commercial or industrial development, or that grant other incentives to such a development, on the condition that affordable housing be provided or preserved, either on or off of the development site, or on condition that the developer provide money or property to be used for affordable housing.
     (3) Incentive zoning used under the authority of this section must comply with the following:
     (a) Housing units developed, preserved, or acquired pursuant to incentive zoning must be affordable to, and occupied by, households with income levels determined by the city or county, subject to the limits in this subsection (3)(a), as follows:
     (i) Rental housing units must be affordable to, and occupied by, households with incomes not exceeding: (A) Eighty percent of the median income, if located outside high-cost areas; or (B) the median income, if located in high-cost areas.
     (ii) Housing units for owner-occupancy must be affordable to, and occupied by, households with incomes not exceeding: (A) One hundred fifteen percent of the median income, if located outside high-cost areas; or (B) one hundred fifty percent of the median income, if located in high-cost areas.
     (iii) "High-cost area" means a county where the third quarter median house price for the previous year as reported by the Washington center for real estate research at Washington State University is equal to or greater than one hundred thirty percent of the statewide median house price published during the same time period.
     (b) Housing units created, acquired, or preserved pursuant to incentive zoning must be committed to remain as affordable housing for at least fifty years. A city or county may establish or agree to terms on which a commitment may be reduced or terminated based on provision of substitute affordable housing or a payment to be used for affordable housing.
     (4) A city or county may enact or expand incentive zoning for commercial or industrial development whether or not the program may impose a tax, fee, or charge on the development or construction of property. A local jurisdiction may collect reasonable fees from an applicant for an incentive zoning program to cover the cost to the city, town, county, or other municipal corporation of administering the incentive zoning program.
     (5) If an applicant for a permit or development approval chooses not to seek any benefits of an incentive program enacted pursuant to this section, a city, county, or town may not condition, deny, or delay the issuance of a permit or development approval for failure to participate in such program, provided the permit application or development project is consistent with zoning and development standards on the subject property.

Sec. 3   RCW 82.02.020 and 2006 c 149 s 3 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 incentive zoning consistent with section 2 of this act, nor to enforce agreements made pursuant to such incentive zoning.
     Nothing in this section limits the authority of counties, cities, or towns to implement programs consistent with RCW 36.70A.540, 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. The authority granted in this act extends to any incentive zoning adopted by a local government through an ordinance or resolution prior to the effective date of this act.

NEW SECTION.  Sec. 5   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION.  Sec. 6   This act takes effect July 31, 2008.