The proposed bill establishes land banking authorities in Washington State to tackle the housing crisis by facilitating the acquisition and management of land designated for affordable housing development. It empowers these authorities to operate regionally, with responsibilities that include acquiring, holding, and managing properties while prioritizing equity and displacement prevention. The bill mandates that at least 50% of the properties leased or sold must remain affordable for a minimum of 30 years. Additionally, it streamlines the process for transferring tax-foreclosed properties to land bank authorities, allowing them to operate tax-exempt and focus on affordable housing initiatives. Nonprofit entities acting as land banks will also be exempt from property taxation if they meet specific criteria.

Furthermore, the bill introduces new provisions regarding real estate excise tax exemptions for transactions involving land bank authorities and certain low-income housing developments. It clarifies the definition of "sale" to encompass various property transfer methods while excluding gifts or inheritance from being classified as sales for tax purposes. The legislation emphasizes the importance of maintaining the intended use of properties transferred under these exemptions, imposing penalties for non-compliance. A tax preference performance statement will evaluate the effectiveness of these tax exemptions in achieving public policy goals, with a review by the joint legislative audit and review committee to assess their impact on reducing land costs for housing development. If the objectives are not met, the legislature may consider repealing these tax preferences.

Statutes affected:
Original Bill: 39.33.015, 36.35.150, 35.21.755
Substitute bill: 36.35.150, 35.21.755, 82.45.010