The proposed bill seeks to alleviate Washington's housing shortage by promoting the conversion of underutilized commercial properties into residential or mixed-use developments that incorporate affordable housing. It establishes a framework for the Department of Commerce to engage property owners and developers, targeting projects that can generate at least 250 new housing units. The bill sets forth criteria for eligible properties, emphasizing their location, current land uses, and necessary infrastructure improvements. It also prioritizes public benefits, such as job training and collaboration with local school districts, in the evaluation of applications. Additionally, the bill introduces a property tax exemption for qualifying projects that commit to providing at least 20% of units as affordable for low-income households for a minimum of 50 years, while including a sunset provision that prohibits new exemptions after June 30, 2027.

Further amendments to existing laws regarding multifamily housing tax exemptions clarify the conditions for approval of applications, including the requirement that existing multifamily vacant housing must have been vacant for at least 12 months. The bill mandates that new construction and rehabilitation projects be completed within three years of application approval, with provisions for extensions. It also requires annual reporting by property owners on occupancy and compliance with affordable housing standards, introduces penalties for noncompliance, and establishes an appeal process for tax exemption eligibility decisions. The bill enhances definitions related to affordable housing and investment projects, ensuring that "affordable housing" includes both homeownership and rental options for low-income households, with costs not exceeding 30% of their income. Overall, the bill aims to improve accountability and align tax exemptions with affordable housing objectives.

Statutes affected:
Original Bill: 84.14.010, 84.14.030, 84.14.060, 84.14.070, 84.14.090, 84.14.100, 84.14.110, 82.59.010