Washington Legislative Issues for 2023

Spokane REALTORS Hill Day Olympia 2023

Washington Legislative Issues for 2023

WA REALTORS® CALLS THIS THE “YEAR OF HOUSING”

Key Victories for REALTORS®

Highlights here – scroll down for more details

Missing Middle Bill Mandates more housing types including duplex to sixplex units, townhouses, cottage houses, and other smaller housing types that fit within existing residential neighborhoods.
Condo Reform Exempts buildings with 12 or fewer units to streamline construction design process.
Increasing the Supply & Affordability of Condominiums Allows contractors a “Right to Cure” to fix construction issues before litigation.
Expanding housing options with ADUs. Eases barriers to the construction and use of accessory dwelling units.
Exempting Residential Sale/Leasebacks from Landlord-Tenant Act When Allows for rent back agreements for up to 90-days, and exempts them from Landlord-Tenant Act
Housing Project Streamline Regulations Two bills to help speed up city review processes.
Reducing local governments’ land use permitting workload – Streamlines process
Improving the state’s response to climate change Adds a climate change element to the Growth Management Act.
Converting existing buildings to residential Makes it easier to convert office buildings to residential units
Covenant Home Ownership Account – Provides downpayment assistance to those historically affected by housing discrimination
Expanding housing finance opportunities Expands ability of public housing authorities to re-benchmark median income limits.
Consumer “Right to List” Reduces “Right to List” agreements to 0nly 5-years.
Improve Consumer Protections in Real Estate Agency Law A first in the country, creates written buyer agency agreements, and dual agency agreements with clear disclosure for compensations.

Bill that have passed

Condo/Attached Buildings Reform SB5058 The bill exempts buildings with 12 or fewer units that are no more than two stories from requirements to submit a building enclosure design document to the building authority before construction, and to undergo building enclosure inspections during construction and before conveyance of a condominium unit within the building to a third party. Sponsored by Senator Mike Padden. Signed into law

Allow Middle Housing in Cities HB 1110 “Middle Housing” types are duplex to sixplex units, townhouses, cottage houses, and other smaller housing types that fit within existing residential neighborhoods. The lack of housing supply is caused by lack of building land, and antiquated city zoning that locks up over 70% of residential land solely for single-family housing. Allowing middle housing in all residential areas would still allow single-family housing, but provide more options to increase housing supply and affordable home ownership. Senate lawmakers approved the measure 35-14, with seven Republicans joining Democrats. The final version is less ambitious than earlier versions, but broadly orders cities across the state to allow duplexes to be built, with fourplexes allowed in cities with more than 75,000 people. Signed into law

Increasing the Supply & Affordability of Condominiums SB 5258 Condominiums are the most affordable type of home ownership, but the supply of new condominiums in Washington is among the worst in the country. This bill improves the condominium market by improving the process to repair condominium defects (“Right to Cure”), streamlines the process for construction of smaller condominium projects. Signed into law

Expanding housing options with ADUs. HB 1337 This bill works to ease barriers to the construction and use of accessory dwelling units. Signed into law

Exempting Residential Sale/Leasebacks from Landlord-Tenant Act HB 1070 When a house is sold, sometimes the seller is not yet ready to move out, or the buyer is not able to move in. In this situation, the buyer and seller will agree to a written “leaseback” as part of the sale so that the seller stays in the house after closing for a certain period of time. This is not a typical landlord-tenant type situation, so this bill would clarify that a sale/leaseback is exempt from the state’s landlord-tenant act. Signed into law

Streamline Regulations that Increase Housing Costs & Litigation HB 1293 Signed into law

Streamlining Project Review SB 5290 Signed into law

Reducing local governments’ land use permitting workload SB5412 – Signed into law

Improving the state’s response to climate change HB1181 would add a climate change element to the Growth Management Act. Signed into law

Converting existing buildings to residential HB1042 Concerning the use of existing buildings for residential purposes. Signed into law

Creating the covenant home ownership account and program to address the history of housing discrimination due to racially restrictive real estate covenants in Washington state. HB 1474 Establishes a covenant home ownership account and program to provide down payment and closing cost assistance to help address generations of systemic, racist, and discriminatory policies that formed barriers to home ownership. Signed into law

Expanding housing finance opportunities HB1046 Expanding housing supply by supporting the ability of public housing authorities to finance affordable housing developments by rebenchmarking area median income limits. Signed into law

Consumer “Right to List” SB5399 Providing for future listing right purchase contracts. Reduces “Right to List” agreements to 0nly 5-years. Signed into law

Landlord/Tenant Regulations

Landlord Claims documentation HB1074 Addressing documentation and processes governing landlords’ claims for damage to residential premises. There are concerns this bill would create heavy documentation requirements housing providers in order to recoup costs for damages made by tenants. Signed into law

ADU Rental Incentives SB5045 Incentivizing rental of accessory dwelling units to low-income households. Signed into law

REALTOR® Legislation

Improve Consumer Protections in Real Estate Agency Law SB 5191 Signed into law

Includes the following:

Buyer Agency Agreements
Require written buyer agency agreements, to be signed by the buyer as soon as reasonably practical after a broker commences rendering brokerage services for compensation or the expectation of compensation (the same timing used for listing agreements).

A. Buyer Agency Agreement must include broker appointment to represent the Buyer; exclusive and non-exclusive options; terms of compensation; and duration of agreement and termination provisions.
B. Buyer Agency Agreement not required to include geographic scope provisions or restatement of agency law or other statutory duties.
C. Buyer Agency Agreement would be structured to allow for additional terms and
provisions to be included in addition to the statutory requirements.

Dual Agency Relationships
Require clients to affirmatively and in writing opt-in to single agent, dual agency relationship, and include written disclosure of the limitations inherent in dual agency relationships. Include language in the agency law pamphlet to explain the dual agency relationship to consumers.

Agency Law Pamphlet
Modify the Agency Law pamphlet so that it reads in a narrative form that is easier for
consumers to understand, rather than restating statutory language. The pamphlet will
be much shorter and easier to understand.

Follow-up to the Falcon v. Bowfits decision by clarifying that the statutory duties in the
Agency Law apply between a broker and all parties in the transaction, not solely between a broker and broker’s client.

Bills that have died

Homelessness Bonds Referendum HB 1149/ SB 5202Reducing homelessness in Washington state through capital expenditures for programs that address housing insecurity. Governor’s plan that WR supports. Opposition to this bill because of the risk to the state’s bond rating. Would require a cap lid being raised. DEAD

Lot Splitting HB 1245 Increase Housing Options through lot splitting. The House version has been approved and is now with the Senate.

Limiting HOA Authority HB1054 Addressing the authority of owners’ associations in common interest communities to regulate or limit occupancy by unrelated persons. Has passed the House and now heads to the Senate

Raising the limit factor for property taxes HB 1670 – Sponsored by Spokane’s Rep. Timm Ormsby, this bill would allow cities, counties and other taxing districts to triple their annual increases in property taxes. DEAD.

Family Burial Grounds HB1037 Would allow families to bury loved ones on their own property. Spokane Co Auditor Vicki Daulton is worried that there may not be a way to make this a searchable item when disclosing documents. Has passed in the House and is now set for a vote in the Senate.

Concerning accessory dwelling units SB 5235 – It has passed the Senate and is now up for consideration in the house

Increasing the supply of affordable housing by modifying the state and local real estate excise tax HB1628 – Adds a 3/4 percent increase in a new “local option” for REET – along with a new 4-5% REET for commercial properties over $5-million. Also known as REET 3. Washington REALTORS® is opposing this bill. DEAD

Transit-Oriented Development SB5466 Allows for duplexes and triplexes near mass transportation. Washington State’s multi-billion dollar transit investments necessitate land use and zoning near transit that increases housing supply and community services for transit users. Transit-Oriented Development (“TOD”) regulations would apply in areas next to the largest transit facilities like light rail to ensure that new housing supply is commensurate with the State’s transit investments. Cities would have flexibility to allow different types of TOD near station areas. Passed the Senate 96-0, and is now set for a vote in the House. DEAD

Home for Heroes HB 1633 This would create a home ownership down payment assistance pilot program for former or current military, police and fire officers, nurses, social workers, dispatchers, etc. DEAD

Energy Standards Work Group SB5057 Creating a work group to evaluate the costs of the state energy performance standard for covered commercial buildings. DEAD

Housing Benefit Districts HB 1111 The legislature intends to establish a housing benefit district pilot program which, using a land acquisition and deployment strategy, would produce more affordable low-income and moderate income housing. DEAD

Changing the definition of Public Works SB5418 A new bill that has the City of Spokane very concerned – that redefines “Public Works.” Spokane is concerned this could put a number of incentive programs such as TIF financing, and the Multifamily Tax Exemption at risk, and add prevailing wage requirements on any project that uses public funds. DEAD

American Dream Homes SB5027 Promoting housing affordability by incentivizing the construction of American dream homes. DEAD

Design Review HB 1026 DEAD

Implementing a per mile charge on vehicle usage of public roadways HB1832 – would implement a new per mile charge on vehicle usage of public roadways. Received a hearing, but no further action taken. DEAD

Affordable Housing Exemption Program HB1596 Providing local governments with options to increase affordable housing in their communities. DEAD

State Building Council Reform SB5117 Reforming the state building code council, its operations and procedures, and its statutory authority. DEAD

Washington Future Funds Program HB1094 Creating the Washington future fund program. DEAD

Growth Management Act Reform SB5230 Improving the state’s response to climate change by updating the state’s planning framework. Also see SB5651 Concerning equity and environmental justice in the growth management act. DEAD

Concerning the sale or lease of manufactured/mobile home communities and the property on which they sit HB 1129 Would provide greater opportunities to purchase manufactured or mobile home community property. DEAD

Increasing the supply of affordable housing by modifying real estate excise tax HB1628 – would increase the cost of multifamily housing and single family homes through increases in both state and local real estate excise taxes. DEAD

LANDLORD/TENANT

Rental Registration SB 5060 Requiring the registration of rental and vacant housing units. Moved out of committee to Ways and Means DEAD

Residential Rent and Fees HB 1124 Protecting tenants from excessive rent and related fees by providing at least six months’ notice for rent increases over a certain amount, allowing tenants the right to terminate a tenancy without penalty, and limiting late fees. This bill has passed in the House, but faces a tough vote in the Senate. DEAD

Landlord Predatory Pricing Protections HB 1388 Protecting tenants by prohibiting predatory residential rent practices and by applying the consumer protection act to the residential landlord-tenant act and the manufactured/mobile home landlord-tenant act. May exempt any building built in the last 10 years, or substantially remodeled in the past 10 years. DEAD

Rent Caps based on Inflation HB 1389 /SB 5435 Concerning residential rent increases under the residential landlord-tenant act and the manufactured/mobile home landlord-tenant act. Confusing program that tries to bank credits for landlords that charge less than market rate. No guidance on what this means. DEAD

Local City Rental Caps HB 1625 Enabling local governments to plan and adopt programs to stabilize and control rents. DEAD

Landlord – Tenant District Court SB5707 A test project involving Spokane that would establish a separate District Court to tackle landlord/tenant disputes DEAD