H-1390.3
SUBSTITUTE HOUSE BILL 1709
State of Washington 68th Legislature 2023 Regular Session
By House Capital Budget (originally sponsored by Representatives
Tharinger, Macri, Alvarado, Ramel, and Reed; by request of Department
of Commerce)
READ FIRST TIME 02/24/23.
1 AN ACT Relating to housing programs administered by the
2 department of commerce; amending RCW 43.185.010, 43.185.030,
3 43.185.070, 43.185.074, 43.185.080, 43.185A.010, 43.185A.020,
4 43.185A.060, 43.185A.070, 18.85.311, 31.04.025, 39.35D.080,
5 43.63A.680, 43.79.201, 43.185C.200, 43.185C.210, 47.12.063,
6 59.24.060, 82.14.400, and 82.45.100; reenacting and amending RCW
7 43.185.050; adding new sections to chapter 43.185A RCW; adding a new
8 section to chapter 42.56 RCW; adding a new section to chapter 43.185B
9 RCW; recodifying RCW 43.185.010, 43.185.030, 43.185.050, 43.185.070,
10 43.185.074, 43.185.080, and 43.185.110; and repealing RCW 43.185.015,
11 43.185.020, 43.185.060, 43.185.076, 43.185.090, 43.185.100,
12 43.185.120, 43.185.130, 43.185.140, 43.185.910, 43.185A.030,
13 43.185A.050, 43.185A.080, 43.185A.090, 43.185A.100, 43.185A.110,
14 43.185A.120, and 43.185A.900.
15 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
16 Sec. 1. RCW 43.185.010 and 1991 c 356 s 1 are each amended to
17 read as follows:
18 The legislature finds that current economic conditions, federal
19 housing policies and declining resources at the federal, state, and
20 local level adversely affect the ability of low and very low-income
21 persons to obtain safe, decent, and affordable housing.
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 1 The legislature further finds that members of over ((one hundred
2 twenty thousand households live in housing units which are
3 overcrowded, lack plumbing, are otherwise threatening to health and
4 safety, and have rents and utility payments which exceed thirty
5 percent of their income)) 150,000 households pay more than 50 percent
6 of their income for rent and housing costs.
7 The legislature further finds that minorities, rural households,
8 and migrant farmworkers require housing assistance at a rate which
9 significantly exceeds their proportion of the general population.
10 The legislature further finds that one of the most dramatic
11 housing needs is that of persons needing special housing-related
12 services, such as ((the mentally ill)) individuals with mental
13 illness, recovering alcoholics, frail elderly persons, families with
14 members who have disabilities, and single parents. These services
15 include medical assistance, counseling, chore services, and child
16 care.
17 The legislature further finds that ((housing assistance programs
18 in the past have often failed to help those in greatest need)) state
19 investments in affordable housing, as enabled by the legislature in
20 1986, have exceeded $1,800,000,000 to provide over 55,000 units of
21 safe and affordable housing to low-income individuals.
22 ((The legislature declares that it is in the public interest to
23 establish a continuously renewable resource known as the housing
24 trust fund and housing assistance program to assist low and very low-
25 income citizens in meeting their basic housing needs, and that the
26 needs of very low-income citizens should be given priority and that
27 whenever feasible, assistance should be in the form of loans.))
28 Sec. 2. RCW 43.185.030 and 2016 sp.s. c 36 s 936 are each
29 amended to read as follows:
30 There is hereby created in the state treasury an account to be
31 known as the Washington housing trust fund. The housing trust fund
32 shall include revenue from the sources established by this chapter,
33 appropriations by the legislature, private contributions, repayment
34 of loans, and all other sources. ((During the 2015-2017 fiscal
35 biennium, the legislature may transfer from the Washington housing
36 trust fund to the home security fund account and to the state general
37 fund such amounts as reflect the excess balance in the fund.))
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 1 Sec. 3. RCW 43.185.050 and 2021 c 332 s 7032 and 2021 c 130 s 5
2 are each reenacted and amended to read as follows:
3 (1) The department must use moneys from the housing trust fund
4 and other legislative appropriations to finance in whole or in part
5 any loan((s)) or grant projects that will provide affordable housing
6 for persons and families with special housing needs and ((with
7 incomes at or below fifty percent of the median family income for the
8 county or standard metropolitan statistical area where the project is
9 located)) who are low-income households.
10 (2) At least thirty percent of these moneys used in any given
11 funding cycle must be for the benefit of projects located in rural
12 areas of the state as defined by the department. If the department
13 determines that it has not received an adequate number of suitable
14 applications for rural projects during any given funding cycle, the
15 department may allocate unused moneys for projects in nonrural areas
16 of the state.
17 (((2))) (3) The department must prioritize allocating at least,
18 but not limited to, 10 percent of these moneys used in any given
19 funding cycle to organizations that serve and are substantially
20 governed by individuals disproportionately impacted by homelessness,
21 including black, indigenous, and other people of color and, lesbian,
22 gay, bisexual, queer, transgender, and other gender-diverse
23 individuals.
24 (4) Activities eligible for assistance from the housing trust
25 fund and other legislative appropriations include, but are not
26 limited to:
27 (a) New construction, rehabilitation, or acquisition of low and
28 very low-income housing units;
29 (b) ((Rent subsidies;
30 (c) Matching funds for social services directly related to
31 providing housing for special-need tenants in assisted projects;
32 (d) Technical)) Preconstruction technical assistance, design and
33 finance services and consultation, and administrative costs for
34 eligible nonprofit community or neighborhood-based organizations;
35 (((e))) (c) Administrative costs for housing assistance groups or
36 organizations when such grant or loan will substantially increase the
37 recipient's access to housing funds other than those available under
38 this chapter;
39 (((f))) (d) Shelters ((and related services)) for the homeless,
40 including emergency shelters and overnight youth shelters;
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 1 (((g) Mortgage subsidies, including temporary rental and mortgage
2 payment subsidies to prevent homelessness;
3 (h) Mortgage insurance guarantee or payments for eligible
4 projects;
5 (i) Down payment or closing cost assistance for eligible first-
6 time home buyers;
7 (j))) (e) Down payment or closing costs assistance for low-income
8 first-time home buyers;
9 (f) Acquisition of housing units for the purpose of preservation
10 as low-income ((or very low-income)) housing;
11 (((k))) (g) Projects making affordable housing projects more
12 accessible to ((families)) low-income households with members who
13 have disabilities; and
14 (((l))) (h) Remodeling and improvements as required to meet
15 building code, licensing requirements, or legal operations to
16 residential properties owned and operated by an entity eligible under
17 RCW 43.185A.040, which were transferred as described in RCW
18 82.45.010(3)(t) by the parent of a child with developmental
19 disabilities.
20 (((3) Preference must be given for projects that include an early
21 learning facility, as defined in RCW 43.31.565.
22 (4)))(5)(a) Legislative appropriations from capital bond proceeds
23 may be used ((only)) for the costs of projects authorized under
24 subsection (((2)(a), (i), and (j))) (4) of this section, ((and not
25 for the administrative costs of the department,)) except ((that
26 during the 2021-2023 fiscal biennium, the)) for costs of subsection
27 (4)(c) of this section.
28 (b) The department may use up to three percent of the
29 appropriations from capital bond proceeds or other new appropriations
30 for affordable housing investments for administrative costs
31 associated with application, distribution, and project development
32 activities of the affordable housing ((assistance)) program.
33 (c) Reappropriations must not be included in the calculation of
34 the annual funds available for determining the administrative costs.
35 (((5)))(6)(a) Moneys received from repayment of housing trust
36 fund loans ((from appropriations from capital bond proceeds)) or
37 other affordable housing appropriations may be used for all
38 activities necessary for the proper functioning of the affordable
39 housing ((assistance)) program ((except for activities authorized
40 under subsection (2)(b) and (c) of this section)), including, but not
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 1 limited to, providing preservation funding, as provided in section 12
2 of this act, and preconstruction technical assistance as provided in
3 RCW 43.185.080 (as recodified by this act).
4 (((6) Administrative costs associated with application,
5 distribution, and project development activities of the department
6 may not exceed three percent of the annual funds available for the
7 housing assistance program. Reappropriations must not be included in
8 the calculation of the annual funds available for determining the
9 administrative costs.
10 (7))) (b) Administrative costs associated with compliance and
11 monitoring activities of the department may not exceed ((one-
12 quarter)) four-tenths of one percent annually of the contracted
13 amount of state investment in ((the housing assistance program))
14 affordable housing programs.
15 Sec. 4. RCW 43.185.070 and 2019 c 325 s 5013 are each amended to
16 read as follows:
17 (1) During each calendar year in which funds from the housing
18 trust fund or other legislative appropriations are available for use
19 by the department for the affordable housing ((assistance)) program,
20 the department must announce to all known interested parties, and
21 ((through major media throughout the state)) on its website, a grant
22 and loan application period of at least ((ninety)) 60 days' duration.
23 This announcement must be made as often as the director deems
24 appropriate for proper utilization of resources. The department must
25 then promptly grant as many applications as will utilize available
26 funds less appropriate administrative costs of the department as
27 provided in RCW 43.185.050 (as recodified by this act).
28 (2) In awarding funds under this chapter, the department must:
29 (a) Provide for a geographic distribution on a statewide basis;
30 and
31 (b) ((Until June 30, 2013, consider)) Consider the total cost and
32 per-unit cost of each project for which an application is submitted
33 for funding ((under RCW 43.185.050(2) (a) and (j))), as compared to
34 similar housing projects constructed or renovated within the same
35 geographic area.
36 (3) ((The department, with advice and input from the affordable
37 housing advisory board established in RCW 43.185B.020, or a
38 subcommittee of the affordable housing advisory board, must report
39 recommendations for awarding funds in a cost-effective manner. The
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 1 report must include an implementation plan, timeline, and any other
2 items the department identifies as important to consider to the
3 legislature by December 1, 2012.
4 (4))) The department must give first priority to applications for
5 projects and activities ((which utilize existing privately owned
6 housing stock including privately owned housing stock purchased by
7 nonprofit public development authorities and public housing
8 authorities as created in chapter 35.82 RCW. As used in this
9 subsection, privately owned housing stock includes housing that is
10 acquired by a federal agency through a default on the mortgage by the
11 private owner. Such projects and activities must be evaluated under
12 subsection (5) of this section. Second priority must be given to
13 activities and projects which utilize existing publicly owned housing
14 stock)) that increase the total number of units of affordable housing
15 in the state. All projects and activities must be evaluated by some
16 or all of the criteria under subsection (((5))) (6) of this section,
17 and similar projects and activities shall be evaluated under the same
18 criteria.
19 (4) The department must use a separate application form for
20 applications to provide homeownership opportunities and evaluate
21 homeownership project applications as allowed under chapter 43.185A
22 RCW.
23 (5) The department must collaborate with public entities that
24 finance affordable housing, including the housing finance commission,
25 cities, and counties, in determining the criteria for evaluating
26 applications.
27 (6) The department must give preference for applications based on
28 some or all of the criteria under this subsection, and similar
29 projects and activities must be evaluated under the same criteria:
30 (a) The degree of leveraging of other funds that will occur;
31 (b) The degree of commitment from programs to provide necessary
32 habilitation and support services for projects focusing on special
33 needs populations;
34 (c) Recipient contributions to total project costs, including
35 allied contributions from other sources such as professional, craft
36 and trade services, and lender interest rate subsidies;
37 (d) Local government project contributions in the form of
38 infrastructure improvements, and others;
39 (e) Projects that encourage ownership, management, and other
40 project-related responsibility opportunities;
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 1 (f) Projects that demonstrate a strong probability of serving the
2 original target group or income level for a period of at least
3 ((twenty-five)) 40 years;
4 (g) The applicant has the demonstrated ability, stability and
5 resources to implement the project;
6 (h) Projects which demonstrate serving the greatest need;
7 (i) Projects that provide housing for persons and families with
8 the lowest incomes;
9 (j) Projects serving special needs populations which ((are
10 under)) fulfill statutory mandates to develop community housing;
11 (k) Project location and access to employment centers in the
12 region or area;
13 (l) Projects that provide employment and training opportunities
14 for disadvantaged youth under a youthbuild or youthbuild-type program
15 as defined in RCW 50.72.020;
16 (m) Project location and access to available public
17 transportation services; ((and))
18 (n) Projects involving collaborative partnerships between local
19 school districts and either public housing authorities or nonprofit
20 housing providers, that help children of low-income families succeed
21 in school. To receive this preference, the local school district must
22 provide an opportunity for community members to offer input on the
23 proposed project at the first scheduled school board meeting
24 following submission of the grant application to the department;
25 (o) The degree of funding that has already been committed to the
26 project by nonstate entities; and
27 (p) Projects that demonstrate a strong readiness to proceed to
28 construction.
29 (7) Once the department has determined the prioritization of
30 applications, the department must award funding to the ranked
31 projects at a sufficient level to complete the financing package
32 necessary for an applicant to move forward with the affordable
33 housing project.
34 (8) The department may not establish a maximum per-applicant
35 award.
36 Sec. 5. RCW 43.185.074 and 1987 c 513 s 11 are each amended to
37 read as follows:
38 The director shall designate grant and loan applications for
39 approval and for funding under the revenue from remittances made
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1 pursuant to RCW ((18.85.310. These applications shall then be
2 reviewed for final approval by the broker's trust account board
3 created by RCW 18.85.500.
4 The director shall submit to the broker's trust account board
5 within any fiscal year only such applications which in their
6 aggregate total funding requirements do not exceed the revenue to the
7 housing trust found [fund] from remittances made pursuant to RCW
8 18.85.310 for the previous fiscal year)) 18.85.285.
9 Sec. 6. RCW 43.185.080 and 1991 c 356 s 6 are each amended to
10 read as follows:
11 (1) The department may use moneys from the housing trust fund and
12 other legislative appropriations, ((but not appropriations from
13 capital bond proceeds,)) to provide preconstruction technical
14 assistance to eligible recipients seeking to construct, rehabilitate,
15 or finance housing-related services for very low and low-income
16 persons. The department shall emphasiz