Washington governor signs 10 housing bills, including rent and property tax provisions

But as the state’s housing situation has grown more complex — particularly as localities wrestle with losses of federal funding — the legislature has aimed to address some key issues around costs, regulations and property taxes.

Rent cap bill spurs vigorous debate

The most contentious bill that Ferguson signed into law was a state-level mandate to cap rent increases. H.B. 1217 was the source of vigorous debate across the aisle, with Democratic sponsors arguing that rent hikes have become unsustainable for working people and require intervention.

Critics of the bill contend it will further constrain supply and the construction of additional units, arguing that the estimated 1 million unit shortage in the state could be exacerbated. In regard to rents, they argue it could push landlords to compensate by raising prices for currently or soon-to-be vacant units.

The rent-cap bill that was signed by Ferguson serves as a compromise, according to reporting last month by The Seattle Times. Initially, rent increases would have been capped at 7% annually. This was changed to 10% plus increases in the consumer price index (CPI). The bill will sunset after 15 years.

A separate provision also permanently caps rent increases at 5% per year for residents who live in manufactured homes. The bill did not have any Republican support in either the House or Senate.

Overview of other bills

But that was not the case for all of the measures.

H.B. 1106 is focused on veterans. Starting in 2027, it phases down disability rating requirements from 80% to 40% to “ensure more disabled veterans are eligible for property tax relief,” the bill stated. This aims to allow more veterans to qualify for the state’s property tax exemption program for seniors and disabled people.

Meanwhile, S.B. 5184 seeks to streamline the development of new housing units by changing minimum parking requirements. It was based on a judgment that “predetermined on-site parking requirements needlessly drive up the cost of development, particularly housing.”

Cities and counties will be prohibited from requiring “more than half of a parking space per residential dwelling unit or one full parking space per single-family home,” the Times reported.

Other bills signed by Ferguson aim to create speedier construction of condominiums and to address insurance challenges related to them. There will also be new requirements for localities to better address commercial-to-residential conversions and to exempt these projects from some state environmental rules.

Another bill requires owners of manufactured housing communities to notify state and local authorities for a potential bid on the land if they intend to sell. Yet another bolsters a list of restricted items that landlords can include in rental agreements.

The state will expand its accessory dwelling unit (ADU) property tax exemption to an additional county. And a final bill, which was passed unanimously, reduces housing permitting timelines between developers and local governments.

Ferguson held a signing ceremony for the bills on Wednesday at Blake House, an affordable high-rise apartment complex in Seattle.

The governor said that affordable housing was the most common issue he heard about last year on the campaign trail, acknowledging that the work is far from over.

“I think what you’ll see today from the bills is strong bipartisan support from the Legislature to get these bills to my desk, which reflects the fact that this is a statewide problem of great concern,” Ferguson said.

After the signings were concluded, Ferguson was asked by reporters about imposing state requirements on local governments. He said the crisis requires a statewide response.

Ferguson and the sponsor lawmakers went on to say that they believe the final rent-cap level strikes a “balance” between the affordability concerns of tenants and the needs of landlords.

“I’m confident that this legislation is going to work for everybody in our state,” Ferguson said. “And what we need to have is a balanced approach. We need more housing, we need folks to construct [and] rent that housing. But we also [hear] that too many folks are getting priced out, and we can’t have that. That’s not an option.”