The 2023 legislative session drew to a close in April, marking the end of a session that has been billed by some as the ‘Year of Housing’ for Washington State. A remarkable 1,776 bills were introduced, and a staggering number of those bills pertained to housing, development, and commercial real estate.
NAIOP Washington State, a nonpartisan organization committed to creating a favorable political and regulatory environment for the commercial real estate industry, engaged deeply with lawmakers to advise on these bills and advocate for our industry. Lawmakers engaged NAIOPWA’s Government Affairs Committee leadership before session, requesting input on proposed bills and assistance in authoring bills, and continued to engage with NAIOPWA throughout the legislative session.
Lawmakers in Olympia understood the importance of quickly adding housing supply to ameliorate our housing affordability crisis. The legislature passed a series of bills that will streamline entitlement and permitting processes and expand developable capacity.
Entitlement Timelines (SB 5290): Requires jurisdictions adhere to specified review timeframes for project permit applications – which include land use permits, environmental review permits, building permits, and others. Should jurisdictions fail to meet the specified timeframes, jurisdictions must refund a portion of the application fee to the applicant and may jeopardize their eligibility for state grants; however, jurisdictions can avoid the rebate if they implement some defined reforms in their permitting process
SEPA Categorical Exemptions for Housing (SB 5412): Exempts all projects building one or more housing unit(s) in urban growth areas from project-level SEPA review, provided that the project is consistent with the comprehensive plan and development regulations already adopted by the jurisdiction. For all jurisdictions except Seattle, the bill does still require local jurisdictions to notice affected tribes and state agencies and address any probable adverse impacts. For Seattle, this exemption went into effect on July 23, 2023.
Design Review Reform (HB 1293): Stipulates that jurisdictions that require design review may only apply “clear and objective development regulations” for design review and that design review “may not result in a reduction in density, height, bulk, or scale below the generally applicable development regulation for development proposals in the applicable zone”. Jurisdictions have until 6 months after their next major comp plan update to implement the required changes.
Adaptive Reuse (HB 1042): Limits jurisdictions’ authority to impose density restrictions, parking requirements, and design standards on adaptive reuse of commercial or mixed use buildings for residential. Exempts this type of adaptive reuse from traffic concurrency and SEPA review. Jurisdictions have until 6 months after their next major comp plan update to implement the required changes.
Middle Housing (HB 1110): Requires jurisdictions to increase the number of housing units permitted per lot in residential zones. Requires a minimum of four units per lot in most locations in most cities.
While our industry saw tremendous victories, we also faced significant threats, namely with the proposed increase to the real estate excise tax (“REET”) and rent control proposals. NAIOPWA actively engaged on both of these threats – engaging a second contract lobbyist to represent our industry in Olympia and meeting early and often with lawmakers to ensure that they understood the potential economic consequences of these policy decisions. NAIOPWA authored eleven op-eds on the impact of a potential REET increase and was the leading organizer of the Coalition Against Higher Real Estate Taxes, which patched through nearly 1,500 phone calls from voters to lawmakers urging opposition to the REET increase. The prime sponsors of two rent control bills proactively engaged NAIOPWA to understand potential economic impacts and amended both bills following discussion with NAIOPWA’s Government Affairs leadership. NAIOPWA was a leading organizer of the Partnership for Affordable Housing (“PAH”), a nonprofit organized around opposition to rent control and support of research-based policy changes that increase housing affordability. PAH, with NAIOPWA’s input and assistance, engaged a public affairs firm that ran nearly 1.5 million advertisements opposing rent control and called more than 6,000 voters to patch calls through to lawmakers. NAIOPWA believes that this engagement in Olympia was instrumental towards ensuring that neither of these bills became law.
Looking ahead to 2024, the NAIOPWA Government Affairs leadership team is engaging with lawmakers and other stakeholders during the off-season to position our industry for success during the next legislative session. NAIOPWA has secured two seats on a funded workgroup convened to advise on energy efficiency standards for existing buildings. NAIOPWA is also working with a coalition of other industry groups and businesses to advance a transit-oriented development bill that passed the Senate but failed in the House during the 2023 session. The bill, as proposed in 2023, would significantly increase allowable density for residential and commercial uses near high-capacity transit stops. NAIOPWA remains actively engaged with PAH and is preparing for the potential that rent control may be proposed again in 2024.
NAIOPWA congratulates state lawmakers for a successful session aimed at making Washington State a more affordable and livable community and a more vibrant economic hub.