The proposed bill aims to enhance housing affordability in Washington State by promoting the construction of "American dream homes," which are defined as owner-occupied single-family residences of 1,500 square feet or less intended for low-income households. The bill introduces several new sections to various chapters of the Revised Code of Washington (RCW), establishing criteria for obtaining permits for these homes, including limits on impact and permitting fees, and requirements for maintaining affordability for a period of seven years. Additionally, it allows for the siting of these homes outside urban growth areas under certain conditions and mandates annual reporting by cities and counties on the number of permits issued.

To incentivize the construction of American dream homes, the bill includes provisions for tax credits, property tax exemptions, and the distribution of state tax revenues to local governments. Builders can receive a tax credit of four percent of the gross selling price of each home, while the homes themselves are exempt from property taxes for seven years after construction. The legislation also outlines the process for claiming these exemptions and credits, with specific expiration dates for the various provisions. Overall, the bill seeks to facilitate the development of affordable housing options for low-income families while providing financial incentives to builders and local governments.