The bill seeks to enhance the multifamily property tax exemption in Washington State to promote the development of long-term affordable housing. Key amendments include a redefinition of "city" to include all cities and towns, and the introduction of new terms such as "conversion," which pertains to transforming existing buildings into multiple-unit housing. The legislation specifies that affordable housing should not exceed 30% of a household's monthly income and establishes requirements for property owners to commit a percentage of units as affordable housing for low and moderate-income households. It also outlines varying tax exemption durations based on the level of commitment to affordable housing, with provisions for tenant relocation assistance when the exemption period concludes.

Additionally, the bill introduces amendments to existing tax exemption laws, ensuring that at least 25% of units are sold to qualified nonprofits or local governments for permanent affordable homeownership. It mandates local jurisdictions to assess the risk of displacement in designated residential targeted areas and requires annual reporting on compliance with affordable housing requirements. The bill also establishes audit processes for compliance, with penalties for substantial noncompliance, and allows the Department of Commerce to impose fees for audits while providing guidance to local governments on managing tax exemption programs. Overall, the legislation aims to increase affordable housing availability while ensuring accountability and compliance within the housing market.

Statutes affected:
Original Bill: 84.14.010, 84.14.020, 84.14.021
Substitute Bill: 84.14.010, 84.14.020, 84.14.021, 84.14.040, 84.14.100, 84.14.110