The bill aims to enhance housing affordability in Washington by providing tax incentives for the conversion of existing commercial buildings into affordable housing units. It establishes a new chapter in Title 82 RCW, which includes provisions for a sales and use tax deferral for cities that meet specific criteria. The legislation emphasizes the importance of repurposing existing structures to quickly address housing needs, particularly for households earning between 50 to 80 percent of the area median income, thereby reducing competition for lower-income households. The bill outlines the requirements for property owners to qualify for tax deferrals, including maintaining affordable housing units for a minimum of ten years and adhering to specific affordability standards.

Key provisions include the establishment of definitions for "affordable housing," "low-income household," and "multiunit residential building," as well as the process for applying for tax deferrals. The bill mandates that at least 20 percent of the residential units in a converted building must be designated as affordable housing for low-income households. Additionally, it requires annual reporting on tenant income and occupancy to ensure compliance with affordability requirements. The legislation also includes stipulations for notifying tenants and local authorities if the owner intends to discontinue compliance with the affordable housing requirements, ensuring that tax deferrals are contingent upon maintaining these standards.