for the construction or improvement of existing buildings to be used for affordable housing if the project is owned by, built on land owned by, or owned or built in partnership with a nonprofit religious organization.
Planning Options for Cities and Counties.
Planning enabling statutes allow cities and counties, at their option, to adopt comprehensive plans, zoning ordinances, and other official controls regulating land uses within their boundaries. Such regulations may generally include:
These regulations form parts of a comprehensive plan that must prepare for the physical and generally advantageous development of the city or county and be designed to encourage the most appropriate uses of land.
Other cities and counties are required, or have elected, to adopt comprehensive plans under the Growth Management Act (GMA). The GMA establishes land use designation and environmental protection requirements for all cities and counties. The GMA also establishes a significantly wider array of planning duties for 28 counties, and the cities within those counties, that are obligated to satisfy all planning requirements of the GMA. These jurisdictions are sometimes said to be fully planning under the GMA. The GMA directs fully planning jurisdictions to adopt internally consistent comprehensive land use plans that are generalized, coordinated land use policy statements of the governing body. Comprehensive plans are implemented through locally adopted development regulations.
Generally, a density bonus is a zoning tool used by cities and counties in which they allow a developer to build more housing units, taller buildings, or more floor space than normally allowed, in exchange for provision of a defined public benefit, such as a specified number or percentage of affordable housing units. A fully planning city or county may enact or expand an affordable housing incentive program that may include density bonuses in the urban growth area.
Density Bonus for Property Owned by a Religious Organization.
A fully planning city or county, or a city planning under the planning-enabling statutes, must allow an increased density bonus for any single-family or multifamily development located on property owned or controlled by a religious organization if:
A fully planning city or county, or a city planning under the planning-enabling statutes, may develop policies to implement the density bonus if it receives a request from a religious organization for an increased density bonus.
Sales and Use Tax.
Retail sales taxes are imposed on retail sales of most articles of tangible personal property, digital products, and some services. A retail sale is a sale to the final consumer or end user of the property, digital product, or service. If retail sales taxes are not collected when the user acquires the property, digital products, or services, then use tax applies to the value of property, digital product, or service when used in this state. The state, all counties, and all cities levy retail sales and use taxes. The state sales and use tax rate is 6.5 percent; local sales and use tax rates vary from 0.5 percent to 4.1 percent, depending on the location. Those constructing affordable housing or mixed-use affordable housing generally pay sales and use taxes on materials and labor required to construct them. Sales and use tax deferral programs are authorized for some types of affordable housing construction, including the deferral for underutilized commercial property enacted in 2024.
Density Bonus for Property Owned by a Religious Organization.
To qualify for a density bonus, affordable housing developed on property owned by a religious organization must maintain at least 50 percent of the development as affordable housing for low-income households. A planning city or county may establish policies to require a greater amount of affordable housing for a property to qualify for a density bonus.
A fully planning city or county, or a city planning under the planning-enabling statutes, must develop policies to implement a density bonus if it receives a request from a religious organization.
Sales and Use Tax Exemption.
The construction, repair, decoration, or improvement of existing buildings or structures for an affordable housing project is exempt from sales and use tax if:
The exemption does not apply to any nonhousing-related buildings, structures, or facilities, such as retail space, office space, churches, or commercial space.
The exemption expires on January 1, 2036.
The substitute bill increases the amount of affordable units required to qualify for a density bonus from 20 percent to 50 percent of housing units.
The substitute bill removes provisions allowing an entity leasing a property owned by a religious organization to qualify for the sales and use tax deferral for a conversion of commercial buildings for affordable housing. It establishes a new sales and use tax exemption for the construction or improvement of existing buildings or structures to be used for affordable housing that:
(In support) The state needs more than one million housing units in the next 20 years. This bill addresses one of the most critical needs, which is housing supply. According to a report by the Public Religion Research Institute, church congregations have shrunk significantly in the last two decades. At the same time, faith communities across the state own underutilized land, especially large parking lots and open spaces. Churches want to use this land to provide affordable housing, but it just does not pencil out. Development efforts are hampered by the high cost of construction and zoning regulations. This bill will empower faith communities to build more affordable housing on their land and gives local governments flexibility to set a threshold of affordability that works for that community.
(Opposed) None.
(Other) Affordable housing is a top priority for counties. We appreciate having the ability to offer a density bonus to religious organizations. However, one section of the bill creates an unfunded mandate for county planning departments. Development regulations are typically updated during the comprehensive updates, but this bill would require an update whenever a qualifying organization makes a request. County planning departments are already resource constrained, and this bill will take additional staff time and resources. Counties want to do this work but ask the state to pay for it.
(In support) Representative Osman Salahuddin, prime sponsor; Kristin Ang, Faith Action Network; Brian Grow, Proclaim Liberty; and Aya Samman, Muslim Association of Puget Sound.