SB 5366 — Expanding the property tax exemption for new and rehabilitated multiple-unit dwellings in urban centers.

S-2443.3SUBSTITUTES-0358.1SENATE SENATE BILL 5366State of Washington66th Legislature2019 Regular SessionBySenateSessionBySenators Ways & Means (originally sponsored by Senators Wagoner, Mullet, Rivers, Palumbo, Rolfes, Brown, Honeyford, Wilson, L., and Zeiger)READZeigerRead FIRSTfirst TIMEtime 03/01/19.AN01/18/19.Referred to Committee on Housing Stability & Affordability.AN ACT Relating to expanding the property tax exemption for new and rehabilitated multiple-unit dwellings in urban centers;

amending RCW 84.14.01084.14.010; and 84.14.040;

and creating a new sections.BEsection.BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:NEW SECTION.  Sec.

This section is the tax preference performance statement for the tax preferencespreference contained in sectionssection 22, and 3, chapter .

., Laws of 2019 (sections(section 2 and 3 of this act).

This performance statement is only intended to be used for subsequent evaluation of the tax preferences.preference.

It is not intended to create a private right of action by any party or be used to determine eligibility for preferential tax treatment.(1) The legislature categorizes thesethis tax preferencespreference as onesone intended to induce certain designated behavior by taxpayers, as indicated in RCW 82.32.808(2)(a).(2) It is the legislature's specific public policy objective to incentivize developers to construct new multifamily housing thereby increasing the number of affordable housing units for low to moderate-income residents in certain urban growth areas.(3) The legislature intends to extend the expiration date of the tax preference in this act, if a review finds that at least twenty percent of the new housing is developed and occupied by households earning:(a) At or below eighty percent of the area median income, at the time of occupancy, adjusted for family size for the county in which the project is located;

or(b) When the housing is intended exclusively for owner occupancy, up to one hundred fifteen percent of the area median income, at the time of sale, adjusted for family size for the county in which the project is located.(4) In order to obtain the data necessary to perform the review in subsection (3) of this section, the joint legislative audit and review committee may refer to data provided by cities or towns in which persons are utilizing thesethis tax preferences,preference, the office of financial management, the department of commerce, the United States department of housing and urban development, and any other data sources, as needed by the joint legislative audit and review committee.Sec.

For the purposes of housing intended for owner occupancy, "affordable housing" means residential housing that is within the means of low or moderate-income households.(2) "Campus facilities master plan" means the area that is defined by the University of Washington as necessary for the future growth and development of its campus facilities for campuses authorized under RCW 28B.45.020.(3)28B.45.020.(3)(a) "City"Until means either (a) a city or town with a population of at least fifteen thousand, (b) the largest city or town, if there is no city or town with a population of at least fifteen thousand, located in a county planning under the growth management act, or (c) a city or town with a population of at least five thousand located in a county subject to the provisions of RCW 36.70A.215 and (d) from July 1, 2022, to July 1, 2025, "city" includesmeans any city or towntown. that does not otherwise qualify under (a) through (c) of this subsection.

The date in this subsection (3)(d)(3)(a) applies to applications submitted under this chapter on or before the date provided in this subsection (3)(d).(4)(a)(3)(a).(b) ExceptBeginning asJuly provided1, 2022, "city" means either (((a)))(i) a city or town with a population of at least fifteen thousand, (((b)))(ii) the largest city or town, if there is no city or town with a population of at least fifteen thousand, located in (b)a county planning under the growth management act, or (((c)))(iii) a city or town with a population of thisat subsection,least "county"five thousand located in a county subject to the provisions of RCW 36.70A.215.(4) "County" means a county with an unincorporated population of at least three hundred fifty thousand.(b)thousand.(5) From"Governing Julyauthority" 1,means 2022,the throughlocal Julylegislative 1,authority 2025,of "county"a city or a county having jurisdiction over the property for which an exemption may be applied for under this chapter.(6) "Growth management act" means anychapter county.36.70A RCW.(7) "High cost area" means a county where the third quarter median house price for the previous year as reported by the Washington center for real estate research at Washington State University is equal to or greater than one hundred thirty percent of the statewide median house price published during the same time period.(8) "Household" means a single person, family, or unrelated persons living together.(9) "Low-income household" means a single person, family, or unrelated persons living together whose adjusted income is at or below eighty percent of the median family income adjusted for family size, for the county where the project is located, as reported by the United States department of housing and urban development.

The date in this subsection (4)(b) applies to applications submitted under this chapter on or before the date provided in this subsection (4)(b).(5) "Governing authority" means the local legislative authority of a city or a county having jurisdiction over the property for which an exemption may be applied for under this chapter.(6) "Growth management act" means chapter 36.70A RCW.(7) "High cost area" means a county where the third quarter median house price for the previous year as reported by the Washington center for real estate research at Washington State University is equal to or greater than one hundred thirty percent of the statewide median house price published during the same time period.(8) "Household" means a single person, family, or unrelated persons living together.(9) "Low-income household" means a single person, family, or unrelated persons living together whose adjusted income is at or below eighty percent of the median family income adjusted for family size, for the county where the project is located, as reported by the United States department of housing and urban development.

and(c) A mixture of uses and activities that may include housing, recreation, and cultural activities in association with either commercial or office, or both, use.Sec.use.--- END ---

3.

RCW 84.14.040 and 2014 c 96 s 4 are each amended to read as follows:(1) The following criteria must be met before an area may be designated as a residential targeted area:(a) The area must be within an urban center, as determined by the governing authority;(b) The area must lack, as determined by the governing authority, sufficient available, desirable, and convenient residential housing, including affordable housing, to meet the needs of the public who would be likely to live in the urban center, if the affordable, desirable, attractive, and livable places to live were available;(c) The providing of additional housing opportunity, including affordable housing, in the area, as determined by the governing authority, will assist in achieving one or more of the stated purposes of this chapter;

and(d) If the residential targeted area is designated by a county, the area must be located in an unincorporated area of the county that is within an urban growth area under RCW 36.70A.110 and ((the area must be)):

(i) The area must be in a rural county, served by a sewer system and designated by a county prior to January 1, 2013;

((or)) (ii) the area must be in a county that includes a campus of an institution of higher education, as defined in RCW 28B.92.030, where at least one thousand two hundred students live on campus during the academic year;

or (iii) from July 1, 2022, through July 1, 2025, the area includes any part of the county that does not otherwise qualify under (d)(i) or (ii) of this subsection (1).(2) For the purpose of designating a residential targeted area or areas, the governing authority may adopt a resolution of intention to so designate an area as generally described in the resolution.

The resolution must state the time and place of a hearing to be held by the governing authority to consider the designation of the area and may include such other information pertaining to the designation of the area as the governing authority determines to be appropriate to apprise the public of the action intended.(3) The governing authority must give notice of a hearing held under this chapter by publication of the notice once each week for two consecutive weeks, not less than seven days, nor more than thirty days before the date of the hearing in a paper having a general circulation in the city or county where the proposed residential targeted area is located.

The notice must state the time, date, place, and purpose of the hearing and generally identify the area proposed to be designated as a residential targeted area.(4) Following the hearing, or a continuance of the hearing, the governing authority may designate all or a portion of the area described in the resolution of intent as a residential targeted area if it finds, in its sole discretion, that the criteria in subsections (1) through (3) of this section have been met.(5) After designation of a residential targeted area, the governing authority must adopt and implement standards and guidelines to be utilized in considering applications and making the determinations required under RCW 84.14.060.

The standards and guidelines must establish basic requirements for both new construction and rehabilitation, which must include:(a) Application process and procedures;(b) Requirements that address demolition of existing structures and site utilization;

and(c) Building requirements that may include elements addressing parking, height, density, environmental impact, and compatibility with the existing surrounding property and such other amenities as will attract and keep permanent residents and that will properly enhance the livability of the residential targeted area in which they are to be located.(6) The governing authority may adopt and implement, either as conditions to eight-year exemptions or as conditions to an extended exemption period under RCW 84.14.020(1)(a)(ii)(B), or both, more stringent income eligibility, rent, or sale price limits, including limits that apply to a higher percentage of units, than the minimum conditions for an extended exemption period under RCW 84.14.020(1)(a)(ii)(B).

For any multiunit housing located in an unincorporated area of a county, a property owner seeking tax incentives under this chapter must commit to renting or selling at least twenty percent of the multifamily housing units as affordable housing units to low and moderate-income households.

In the case of multiunit housing intended exclusively for owner occupancy, the minimum requirement of this subsection (6) may be satisfied solely through housing affordable to moderate-income households.NEW SECTION.  Sec.

4.

The exemption in this act applies to taxes levied for collection in 2022 and thereafter.--- END ---