2025 Regular Session

BySenators Orwall, Alvarado, Frame, Hasegawa, Lovelett, Nobles, Ramos, Saldaña, Shewmake, Trudeau, Valdez, and C. Wilson

Read first time 01/30/25.Referred to Committee on Housing.

AN ACT Relating to the registration of certain corporations and trusts that own single-family homes and condominium units; reenacting and amending RCW 43.79A.040 and 43.79A.040; adding a new chapter to Title 19 RCW; providing effective dates; and providing an expiration date.

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

NEW SECTION. Sec. 1. The legislature finds that the acquisition of single-family homes and condominiums by private equity firms, real estate investment trusts, and other corporate entities is rapidly increasing in Washington, accounting for 22 percent of single-family home purchases in Washington in 2022, a 102 percent increase from 2020. The legislature further finds that corporate buyers often target lower-priced starter homes, typically located in neighborhoods with higher concentrations of families of color, working individuals, and single parent families. Leveraging significant financial advantages, such as purchasing homes with cash, these entities outcompete individual buyers and remove homes from the market, reducing opportunities for homeownership and increasing the risk of neighborhood displacement and gentrification. Once acquired, these properties are often converted into rental units or sold in bulk to other entities, permanently reducing the supply of affordable housing available for individual ownership.

This trend is making a profound impact on Washington's housing market with rapidly rising housing costs, diminishing affordability, and increasing challenges for first-time and lower-income buyers disproportionately impacting working-class families and communities of color.

The legislature finds that transparency is essential to understanding the dynamics of Washington's housing market and responding effectively to its challenges. While progress has been made through local rental registries, there remains a critical gap in tracking and analyzing the scale, nature, and impact of corporate and institutional ownership, particularly in the single-family housing sector. Currently, no centralized system exists to monitor these ownership patterns statewide.

To address this gap, the legislature intends to establish a corporate homeowner registration program within the office of the secretary of state. This program will require corporate entities to report ownership structures, property uses, and other basic information, ensuring accurate and timely data collection. This data will provide policymakers, local governments, and the public with the tools needed to make informed, evidence-based decisions to preserve housing affordability, equity, and accessibility across the state.

This act constitutes an exercise of the state's responsibility to protect and promote the health, safety, and welfare of Washington's residents. As such, it is intended to foster fairness and transparency in the housing market, mitigate the negative impacts of monopolistic ownership, and support measures to close the racial wealth gap and housing affordability crisis.

NEW SECTION. Sec. 2. The corporate homeowner registration program is established at the office of the secretary of state.

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

(1) "Applicable housing unit" means a single-family residence or a condominium unit.

(2) "Condominium" means real property, portions of which are designated for separate ownership and the remainder of which is designated for common ownership solely by the owners of those portions. Real property is not a condominium unless the undivided interests in the common elements are vested in the unit owners, and unless a declaration and a survey map and plans have been recorded pursuant to chapter 64.34 RCW.

(3) "Corporation" or "domestic corporation" means a corporation for profit, including a social purpose corporation, which is not a foreign corporation, incorporated under or subject to the provisions of Title 23B RCW.

(4) "Entity" means a foreign or domestic corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, governmental subdivision, agency, or instrumentality.

(5) "Foreign corporation" means a corporation for profit incorporated under a law other than the laws of this state.

(6) "Program" means the corporate homeowner registration program.

(7) "Real estate investment trust" means an entity that owns or finances income-producing real estate as defined in 26 U.S.C Sec. 856.

(8) "Secretary" means the secretary of state, or their designee.

(9) "Single-family residence" means a structure maintained and used as a single dwelling unit. Notwithstanding that a dwelling unit shares one or more walls with another dwelling unit, a dwelling unit is a single-family residence if it has direct access to a street and shares neither heating facilities nor hot water equipment, nor any other essential facility or service, with any other dwelling unit.

NEW SECTION. Sec. 4. (1) Entities with an ownership interest in 20 or more applicable housing units in the state of Washington shall register with the program and report the following information:

(a) Contact information for the entity including, but not limited to, the following information:

(i) Name of the entity seeking registration;

(ii) Names under which the entity conducts business in the state of Washington;

(iii) Business address;

(iv) Phone contact information;

(v) Electronic mail information;

(vi) Description of the ownership structure for the entity; and

(vii) Name, physical address of the entity's primary place of business, and contact information for any corporation, partnership, or other business entity that owns 10 percent or more of the entity;

(b) Number of applicable housing units owned in Washington state;

(d) The end use for each applicable housing unit, which may include, but is not limited to, the following:

(i) Rental property;

(ii) Lease-purchase agreement, as defined in chapter 63.19 RCW; or

(e) Purchase price for each applicable housing unit; and

(f) A list of states and countries that the entity does business in.

(2) The secretary shall determine the registration fee by rule. The fee revenue must be deposited into the corporate homeowner transparency account created in section 5 of this act.

(3)(a) The entity's registration must be updated within 60 days after the sale is closed on any of the entity's applicable housing units.

(b) Any change in information contained in an initial or renewal registration application must be updated within 60 days.

(4) The following entities are exempt from subsection (1) of this section:

(a) Banks and financial institutions that have acquired applicable housing units through foreclosure and possessed the applicable housing units for less than 12 months; and

(b) Build to rent units.

NEW SECTION. Sec. 5. The corporate homeowner transparency account is created in the custody of the state treasurer. All receipts from section 4(2) of this act must be deposited into the account. Expenditures from the account may be used only to administer the registration of entities that own or are divesting applicable housing units. The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.

NEW SECTION. Sec. 6. The secretary may adopt any rules necessary to implement this chapter.

Sec. 7. RCW 43.79A.040 and 2024 c 327 s 16 and 2024 c 168 s 10 are each reenacted and amended to read as follows:

(1) Money in the treasurer's trust fund may be deposited, invested, and reinvested by the state treasurer in accordance with RCW 43.84.080 in the same manner and to the same extent as if the money were in the state treasury, and may be commingled with moneys in the state treasury for cash management and cash balance purposes.

(2) All income received from investment of the treasurer's trust fund must be set aside in an account in the treasury trust fund to be known as the investment income account.

(3) The investment income account may be utilized for the payment of purchased banking services on behalf of treasurer's trust funds including, but not limited to, depository, safekeeping, and disbursement functions for the state treasurer or affected state agencies. The investment income account is subject in all respects to chapter 43.88 RCW, but no appropriation is required for payments to financial institutions. Payments must occur prior to distribution of earnings set forth in subsection (4) of this section.

(4)(a) Monthly, the state treasurer must distribute the earnings credited to the investment income account to the state general fund except under (b), (c), and (d) of this subsection.

(b) The following accounts and funds must receive their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The 24/7 sobriety account, the Washington promise scholarship account, the Gina Grant Bull memorial legislative page scholarship account, the Rosa Franklin legislative internship program scholarship account, the Washington advanced college tuition payment program account, the Washington college savings program account, the accessible communities account, the Washington achieving a better life experience program account, the Washington career and college pathways innovation challenge program account, the community and technical college innovation account, the agricultural local fund, the American Indian scholarship endowment fund, the behavioral health loan repayment and scholarship program account, the Billy Frank Jr. national statuary hall collection fund, the foster care scholarship endowment fund, the foster care endowed scholarship trust fund, the contract harvesting revolving account, the Washington state combined fund drive account, the commemorative works account, the county 911 excise tax account, the corporate homeowner transparency account, the county road administration board emergency loan account, the toll collection account, the developmental disabilities endowment trust fund, the energy account, the energy facility site evaluation council account, the fair fund, the family and medical leave insurance account, the Fern Lodge maintenance account, the fish and wildlife federal lands revolving account, the natural resources federal lands revolving account, the food animal veterinarian conditional scholarship account, the forest health revolving account, the fruit and vegetable inspection account, the educator conditional scholarship account, the game farm alternative account, the GET ready for math and science scholarship account, the Washington global health technologies and product development account, the grain inspection revolving fund, the Washington history day account, the industrial insurance rainy day fund, the juvenile accountability incentive account, the law enforcement officers' and firefighters' plan 2 expense fund, the local tourism promotion account, the low-income home rehabilitation account, the medication for people living with HIV rebate revenue account, the homeowner recovery account, the multiagency permitting team account, the northeast Washington wolf-livestock management account, the pollution liability insurance program trust account, the produce railcar pool account, the public use general aviation airport loan revolving account, the regional transportation investment district account, the rural rehabilitation account, the Washington sexual assault kit account, the stadium and exhibition center account, the youth athletic facility account, the self-insurance revolving fund, the children's trust fund, the Washington horse racing commission Washington bred owners' bonus fund and breeder awards account, the Washington horse racing commission class C purse fund account, the individual development account program account, the Washington horse racing commission operating account, the life sciences discovery fund, the Washington state library-archives building account, the reduced cigarette ignition propensity account, the center for deaf and hard of hearing youth account, the school for the blind account, the Millersylvania park trust fund, the public employees' and retirees' insurance reserve fund, the school employees' benefits board insurance reserve fund, the public employees' and retirees' insurance account, the school employees' insurance account, the long-term services and supports trust account, the radiation perpetual maintenance fund, the Indian health improvement reinvestment account, the department of licensing tuition recovery trust fund, the student achievement council tuition recovery trust fund, the tuition recovery trust fund, the industrial insurance premium refund account, the mobile home park relocation fund, the natural resources deposit fund, the Washington state health insurance pool account, the federal forest revolving account, the Washington saves administrative treasury trust account, and the library operations account.

(c) The following accounts and funds must receive 80 percent of their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The advance right-of-way revolving fund, the advanced environmental mitigation revolving account, the federal narcotics asset forfeitures account, the high occupancy vehicle account, the local rail service assistance account, and the miscellaneous transportation programs account.

(d) Any state agency that has independent authority over accounts or funds not statutorily required to be held in the custody of the state treasurer that deposits funds into a fund or account in the custody of the state treasurer pursuant to an agreement with the office of the state treasurer shall receive its proportionate share of earnings based upon each account's or fund's average daily balance for the period.

(5) In conformance with Article II, section 37 of the state Constitution, no trust accounts or funds shall be allocated earnings without the specific affirmative directive of this section.

Sec. 8. RCW 43.79A.040 and 2024 c 327 s 17 and 2024 c 168 s 11 are each reenacted and amended to read as follows:

(2) All income received from investment of the treasurer's trust fund must be set aside in an account in the treasury trust fund to be known as the investment income account.

(4)(a) Monthly, the state treasurer must distribute the earnings credited to the investment income account to the state general fund except under (b), (c), and (d) of this subsection.

(b) The following accounts and funds must receive their proportionate share of earnings based upon each account's or fund's average daily balance for the period: The 24/7 sobriety account, the Washington promise scholarship account, the Gina Grant Bull memorial legislative page scholarship account, the Rosa Franklin legislative internship program scholarship account, the Washington advanced college tuition payment program account, the Washington college savings program account, the accessible communities account, the Washington achieving a better life experience program account, the Washington career and college pathways innovation challenge program account, the community and technical college innovation account, the agricultural local fund, the American Indian scholarship endowment fund, the behavioral health loan repayment and scholarship program account, the Billy Frank Jr. national statuary hall collection fund, the foster care scholarship endowment fund, the foster care endowed scholarship trust fund, the contract harvesting revolving account, the Washington state combined fund drive account, the commemorative works account, the county 911 excise tax account, the corporate homeowner transparency account, the county road administration board emergency loan account, the toll collection account, the developmental disabilities endowment trust fund, the energy account, the energy facility site evaluation council account, the fair fund, the family and medical leave insurance account, the Fern Lodge maintenance account, the fish and wildlife federal lands revolving account, the natural resources federal lands revolving account, the food animal veterinarian conditional scholarship account, the forest health revolving account, the fruit and vegetable inspection account, the educator conditional scholarship account, the game farm alternative account, the GET ready for math and science scholarship account, the Washington global health technologies and product development account, the grain inspection revolving fund, the Washington history day account, the industrial insurance rainy day fund, the juvenile accountability incentive account, the law enforcement officers' and firefighters' plan 2 expense fund, the local tourism promotion account, the low-income home rehabilitation account, the medication for people living with HIV rebate revenue account, the homeowner recovery account, the multiagency permitting team account, the northeast Washington wolf-livestock management account, the produce railcar pool account, the public use general aviation airport loan revolving account, the regional transportation investment district account, the rural rehabilitation account, the Washington sexual assault kit account, the stadium and exhibition center account, the youth athletic facility account, the self-insurance revolving fund, the children's trust fund, the Washington horse racing commission Washington bred owners' bonus fund and breeder awards account, the Washington horse racing commission class C purse fund account, the individual development account program account, the Washington horse racing commission operating account, the life sciences discovery fund, the Washington state library-archives building account, the reduced cigarette ignition propensity account, the center for deaf and hard of hearing youth account, the school for the blind account, the Millersylvania park trust fund, the public employees' and retirees' insurance reserve fund, the school employees' benefits board insurance reserve fund, the public employees' and retirees' insurance account, the school employees' insurance account, the long-term services and supports trust account, the radiation perpetual maintenance fund, the Indian health improvement reinvestment account, the department of licensing tuition recovery trust fund, the student achievement council tuition recovery trust fund, the tuition recovery trust fund, the industrial insurance premium refund account, the mobile home park relocation fund, the natural resources deposit fund, the Washington state health insurance pool account, the federal forest revolving account, the Washington saves administrative treasury trust account, and the library operations account.

(5) In conformance with Article II, section 37 of the state Constitution, no trust accounts or funds shall be allocated earnings without the specific affirmative directive of this section.

NEW SECTION. Sec. 9. Section 4 of this act takes effect January 1, 2026.

NEW SECTION. Sec. 10. Section 7 of this act expires July 1, 2030.

NEW SECTION. Sec. 11. Section 8 of this act takes effect July 1, 2030.

NEW SECTION. Sec. 12. Sections 1 through 6 of this act constitute a new chapter in Title 19 RCW.