Housing Planning Goal. The Growth Management Act (GMA) includes various planning goals to guide the development of comprehensive plans and development regulations for counties and cities that plan under the GMA. Under the housing goal, GMA jurisdictions must plan for and accommodate housing affordable to all economic segments of the population of the state, promote a variety of residential densities and housing types, and encourage preservation of existing housing stock.
The Department of Commerce (Commerce) must provide an inventory and analysis of existing and projected housing needs that identifies the number of housing units necessary to manage projected growth as required in the housing element of the comprehensive plan, including units for moderate-, low-, very low-, and extremely low-income households as well as emergency housing, emergency shelters, and permanent supportive housing.
Project Permit Process. Before developing land, a developer must obtain permits from the county, city, or town allowing the development. These permits can include land use permits, environmental permits, building permits, and others, and are referred to as project permits. When a county or city planning under the growth management act is reviewing a project, decisions on permit applications are based on adopted development regulations, or the comprehensive plan in the absence of development regulations.
Real Estate Excise Tax. Most real estate sales are subject to state and local real estate excise taxes (REET). The tax is usually collected by the treasurer of the county within which the property is located, or in some circumstances by the Department of Revenue. The county treasurer remits collections of state REET moneys to the state treasurer. For real estate transactions where the state collects REET directly, the local portion of the tax is deposited with the state treasurer in a local REET account. On a monthly basis, the state treasurer distributes from the local REET account to the counties, cities, and towns, the amount of tax collected on behalf of each taxing authority as well as all earnings of investments of balances in the local REET account.
Commerce must establish the proportional share of Washington's total housing shortage for each county, city, and town using the best available data no later than April 1, 2024, and report the number of new homes that must be created in each county, city, and town through 2033, to eliminate Washington's housing shortage. Commerce must post the information to its public website by May 1, 2024.
Every county, city, and town that has authority to approve or deny permits or similar approvals necessary for the construction of new homes must:
The state treasurer may not distribute the earnings of investments of balances in the local real estate excise tax account to any county, city, or town that does not comply with the conditions and requirements.
Commerce must regularly forward any reports made by counties, cities, or towns to the Governor, Lieutenant Governor, Chief Clerk of the House of Representatives, and Secretary of the Senate.
The committee recommended a different version of the bill than what was heard. PRO: Washington is 50th in the nation in number of housing units per family which shows the housing ladder is fundamentally broken. This by itself will not solve the housing shortage but the goal is to recognize the scale of the problem and timeframes necessary to get after the problem. It is not realistic that the problem will be solved in one year so this bill looks at a 10 year period to provide short term goals by municipality because we each need to have a process in place to get a minimum amount of permits through annually to cover the growth or expected growth in the population. There are a lot of housing bills on the table and this is a unique approach to tell local governments to start permitting housing. It will force them to take a look at development regulations that may be preventing builders from building and also let the state know what is preventing housing units from being built as well.
CON: The planning elements of the bill make a lot of sense and are largely reflected in the housing element that was passed a few years ago. The 5 year check-in on the comprehensive plan included in that legislation is the first time we will be able to measure if jurisdictions are meeting their goals and if there are not updates required. This is outside of the GMA process and so it may be confusing which statute should be used if there is a conflict. The largest concern is the mechanism that requires permitting the number of houses calculated because there are many communities that are not seeing applications. If you are unable to get enough permits you should not lose resources.
OTHER: The GMA framework contains a lot of these ideas and Commerce is working with local governments to help them implement and meet these new requirements. We are concerned that the bill applies to all cities and counties in the state the same way, even those who don't plan under GMA and that there will be a second, duplicative framework with a new set of targets established by Commerce. If the housing targets are going to be binding requirements we would need more time to establish those requirements, 5 months is not enough.
PRO: This bill accelerates growth in the housing market and holds municipalities accountable to reach their current housing need, ensuring that housing is being built. We are not currently moving fast enough to make sure we have the planning and permitting process in place to build the amount of housing we need. The easiest way to solve a housing crisis is to address the supply issue. There is data recorded on permitting for each jurisdiction and it should be used to aid in this process.
CON: If permit activity is not coming in it isn't fair to punish a city for not having the proportionate share of the housing. Cities don't build housing. Changes to zoning and permitting has significant cost for cities.