The proposed bill aims to enhance housing affordability in Washington by incentivizing the construction of "American dream homes," which are defined as owner-occupied single-family detached dwellings of 1,700 square feet or less for low-income households. The bill introduces several provisions, including a permit process for these homes that exempts them from impact fees, limits cumulative permitting fees to $1,250, and requires covenants to ensure they remain affordable for low-income families. Additionally, the bill allows for the extension of public facilities to serve these homes and permits their construction outside urban growth areas.

To further support the construction of American dream homes, the bill establishes tax exemptions and credits. Cities and counties can receive distributions of state taxes related to the construction of these homes, and builders are allowed a tax credit of four percent of the gross selling price. The value of American dream homes is also exempt from property taxation for 12 years after construction. The bill includes expiration dates for various provisions, with most set to expire on July 1, 2034, and it takes effect on July 1, 2023.