Washington 2025-2026 Regular Session Status: Passed Senate 7 D cosponsors

SB 5884 — Expanding the limited sales and use tax incentive program to encourage redevelopment of underutilized property.

Last action — Public hearing in the Senate Committee on Ways & Means at 4:00 PM.

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  1. ✓
    Introduced
  2. ✓
    In Committee
  3. 3
    Passed Senate
  4. 4
    Passed House
  5. 5
    To Executive
  6. 6
    Enacted

This bill has passed the Senate. Introduced December 15, 2025. It now moves to the second chamber.

Next likely step: consideration and a floor vote in the House.

Prognosis

Advancing 38% · moderate confidence

Where this bill stands today.

Odds of enactment

Moderate

How often bills like it became law.

  • Passed Senate

    Current position in the legislative process.

  • 7 sponsors

    1 primary, 6 co-sponsors signed on.

  • Single-party support

    Sponsorship is currently within one party (7 D).

Prognosis reads this bill's own signals — stage, sponsorship breadth, committee status, recorded votes and cross-state momentum. Odds come from a model trained on which bills have become law.

Bill Text

What changed in the latest version

364 added · 374 removed

Plain-language change summary

In the latest version of Senate Bill 5884, the definition of "City" has been updated to allow cities with populations up to 275,000, increased from the previous limit of 250,000. Additionally, the term "Area of reduced affordability requirements" has been removed completely. These changes are significant because they broaden the scope of cities that can participate in the program, potentially allowing more areas to develop affordable housing options. This could help address housing shortages in larger urban areas.

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S-4042.2 SUBSTITUTE SENATE BILL 5884 State of Washington 69th Legislature 2026 Regular Session By Senate Housing (originally sponsored by Senators Riccelli, Trudeau, Conway, Frame, Lovelett, Nobles, and Shewmake) READ FIRST TIME 01/22/26.
S-3428.3 SENATE BILL 5884 State of Washington 69th Legislature 2026 Regular Session By Senators Riccelli, Trudeau, Conway, Frame, Lovelett, Nobles, and Shewmake Prefiled 12/15/25.
Read first time 01/12/26.
Referred to Committee on Housing.
adding a new section to chapter 82.92 RCW;
and adding a new section to chapter 82.92 RCW.
and creating a new section.
1 SSB 5884 Sec.
1 SB 5884 Sec.
(3) "Area of reduced affordability requirements" means an area within an urban center or urban growth area that has been designated by the governing authority as an area of reduced affordability requirements in accordance with this chapter.
(3) "Applicant" means an owner of underdeveloped property.
(4) "Applicant" means an owner of underdeveloped property.
(4) "City" means a city with a population of at least 135,000 and not more than ((250,000)) 275,000 at the time the city initially establishes the program under this section.
(((4))) (5) "City" means a city with a population of at least 135,000 and not more than ((250,000)) 275,000 at the time the city initially establishes the program under this section.
(5) "Conditional recipient" means an owner of underdeveloped land granted a conditional certificate of program approval under this chapter, which includes any successor owner of the property.
(((5))) (6) "Conditional recipient" means an owner of underdeveloped ((land)) property granted a conditional certificate of program approval under this chapter, which includes any successor owner of the property.
(6) "County median price" means the most recently published quarterly data of median home prices by the Washington center for real estate research.
(((6))) (7) "County median price" means the most recently published quarterly data of median home prices by the Washington center for real estate research.
(7) "Eligible investment project" means an investment project that is located in a city and receiving a conditional certificate of program approval.
(((7))) (8) "Eligible investment project" means an investment project that is located in a city and receiving a conditional certificate of program approval.
(8) "Fair market rent" means the estimates of 40th percentile gross rents for standard quality units within counties as published by the federal department of housing and urban development.
(((8))) (9) "Fair market rent" means the estimates of 40th percentile gross rents for standard quality units within counties as published by the federal department of housing and urban development.
(9) "Governing authority" means the local legislative authority of a city having jurisdiction over the property for which a deferral may be granted under this chapter.
(((9))) (10) "Governing authority" means the local legislative authority of a city having jurisdiction over the property for which a deferral may be granted under this chapter.
(10) "Household" means a single person, family, or unrelated persons living together.
(((10))) (11) "Household" means a single person, family, or unrelated persons living together.
(11)(a) "Initiation of construction" means the date that a building permit is issued under the building code adopted under RCW 19.27.031 for construction of the qualified building, if the underlying ownership of the building vests exclusively with the person receiving the economic benefit of the deferral.
(((11))) (12)(a) "Initiation of construction" means the date that a building permit is issued under the building code adopted under RCW p.
(b) "Initiation of construction" does not include soil testing, site clearing and grading, site preparation, or any other related p.
2 SSB 5884 19.27.031 for construction of the qualified building, if the underlying ownership of the building vests exclusively with the person receiving the economic benefit of the deferral.
2 SB 5884 activities that are initiated before the issuance of a building permit for the construction of the foundation of the building.
(b) "Initiation of construction" does not include soil testing, site clearing and grading, site preparation, or any other related activities that are initiated before the issuance of a building permit for the construction of the foundation of the building.
(((12))) (13) "Investment project" means an investment in multifamily housing, including labor, services, and materials incorporated in the planning, installation, and construction of the project.
(12) "Investment project" means an investment in multifamily housing, including labor, services, and materials incorporated in the planning, installation, and construction of the project.
(((13))) (14) "Low-income household" means a single person, family, or unrelated persons living together whose adjusted income is more than 50 percent but is at or below 80 percent of the median family income adjusted for family size, for the county, city, or metropolitan statistical area, where the project is located, as reported by the United States department of housing and urban development.
(13) "Low-income household" means a single person, family, or unrelated persons living together whose adjusted income is more than 50 percent but is at or below 80 percent of the median family income adjusted for family size, for the county, city, or metropolitan statistical area, where the project is located, as reported by the United States department of housing and urban development.
(((14))) (15) "Moderate-income household" means a single person, family, or unrelated persons living together whose adjusted income is more than 80 percent but is at or below 115 percent of the median family income adjusted for family size, for the county, city, or metropolitan statistical area, where the project is located, as reported by the United States department of housing and urban development.
(14) "Moderate-income household" means a single person, family, or unrelated persons living together whose adjusted income is more than 80 percent but is at or below 115 percent of the median family income adjusted for family size, for the county, city, or metropolitan statistical area, where the project is located, as reported by the United States department of housing and urban development.
(((15))) (16) "Multifamily housing" means a building or a group of buildings having ((two)) four or more dwelling units not designed or used as transient accommodations and not including hotels and motels.
(15) "Multifamily housing" means a building or a group of buildings having ((two)) four or more dwelling units not designed or used as transient accommodations and not including hotels and motels.
Multifamily units may result from new construction or rehabilitation or conversion of vacant, underutilized, or substandard buildings to multifamily housing.
((Multifamily units may result from new construction or rehabilitation or conversion of vacant, underutilized, or substandard buildings to multifamily housing.)) (16) "Owner" means the property owner of record.
(((16))) (17) "Owner" means the property owner of record.
(17) "Partially used land" means a parcel occupied by a use that includes enough land to be further subdivided for additional development without rezoning.
(((17))) (18) "Partially used land" means a parcel occupied by a use that includes enough land to be further subdivided for additional development without rezoning.
(18) "Residential target area" means an area within an urban center or urban growth area that has been designated by the governing authority as a residential targeted area in accordance with this chapter.
p.
(19) "Underdeveloped property" means any vacant, partially used, or underutilized land identified by the governing authority under RCW 36.70A.115 as suitable for development of affordable homeownership or p.
3 SSB 5884 (19) "Underdeveloped property" means any vacant land, partially used land, or underutilized land identified by the governing authority under RCW 36.70A.115 as suitable for development of affordable homeownership or rental housing.
3 SB 5884 rental housing.
"Underdeveloped property" does not include state-owned lands held under lease, held in trust, or that are otherwise intended for specific purposes.
"Underdeveloped property" does not include state- owned lands held under lease, held in trust, or that are otherwise intended for specific purposes.
(20) "Underutilized land" means a parcel in multifamily, mixed- use, commercial, and industrial zones that could be redeveloped to a more intensive land use than that which currently occupies the property including, but not limited to, land used as a surface parking lot for parking of motor vehicles off the street or highway, that is open to public use with or without charge((, as of June 9, 2022)).
(20) "Underutilized land" means a parcel in multifamily, mixed- use, commercial, and industrial zones that could be redeveloped to a more intensive land use than that which currently occupies the property including, but not limited to, land used as a surface parking lot for parking of motor vehicles off the street or highway, that is open to public use with or without charge, as of June 9, 2022.
The resolution must state the time and place of a hearing to be held by the governing authority to consider the creation of the tax deferral program and p.
The resolution must state the time and place of a hearing to be held by the governing authority to consider the creation of the tax deferral program and may include such other information pertaining to the creation of the deferral program as the governing authority determines to be p.
4 SSB 5884 may include such other information pertaining to the creation of the deferral program as the governing authority determines to be appropriate to apprise the public of the action intended.
4 SB 5884 appropriate to apprise the public of the action intended.
((and)) (d) Additional requirements, conditions, and obligations that must be followed postapproval of an application;
and (d) Additional requirements, conditions, and obligations that must be followed postapproval of an application;
(i) At least 50 percent of the units as affordable rental housing or affordable homeownership housing to very low, low, and moderate- income households((.
(i) At least 50 percent of the units as affordable rental housing or affordable homeownership housing to very low, low, and/or moderate-income households ((.
or (ii) 20 percent of the units as affordable rental housing or affordable homeownership housing to very low, low, and moderate- income households and the investment project is located in an area of reduced affordability requirements;
or (ii) 20 percent of the units as affordable rental housing or affordable homeownership housing to very low, low, and/or moderate- income households if the city requires it and the investment project is located in a residential target area that the governing authority has determined has adequate affordable housing;
5 SSB 5884 (c) At least 50 percent of the investment project set aside for multifamily housing units will be rented at a price at or below fair market rent for the county or sold at a price at or below county median price;
5 SB 5884 (c) At least 50 percent of the investment project set aside for multifamily housing units will be rented at a price at or below fair market rent for the county or sold at a price at or below county median price;
(1) The following criteria must be met before an area may be designated as an area of reduced affordability requirements:
(1) The following criteria must be met before an area may be designated as a residential targeted area:
(b) The area must have a high number of underdeveloped land, underutilized land, and/or vacant land;
(b) The area has a high number of underdeveloped, underutilized, and/or vacant properties;
(c) Proximate to the land, as determined by the governing authority, there must be insufficient available, desirable, and convenient residential housing, including affordable housing, to meet the needs of the public;
(c) Proximate to the land, as determined by the governing authority, there is insufficient available, desirable, and convenient residential housing, including affordable housing, to meet the needs of the public;
and p.
p.
6 SSB 5884 (e) The provision 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.
6 SB 5884 (e) The provision 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;
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(2) For the purpose of designating an area of reduced affordability requirements or areas, the governing authority may adopt a resolution of intention to so designate an area as generally described in the resolution.
and (f) The city must determine that designation of the area is in compliance with the antidisplacement requirements in RCW 36.70A.070(2).
(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.
(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 30 days before the date of the hearing in a paper having a general circulation in the city or county where the proposed area of reduced affordability requirements is located.
(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 30 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 an area of reduced affordability requirements.
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.
The governing authority must send a copy of the notice to all taxing districts in the proposed area of reduced affordability requirements.
The governing authority must send a copy of the notice to all taxing districts in the proposed 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 an area of reduced affordability requirements if it finds, in its sole discretion, that the criteria in subsections (1) through (3) of this section have been met.
(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 an area of reduced affordability requirements, the governing authority must adopt and implement standards and guidelines to be utilized in considering applications and making the determinations required under RCW 82.92.040(1)(a)(ii).
(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 82.92.040.
(6) The governing authority may adopt and implement as a contractual prerequisite to any exemption granted pursuant to RCW 82.92.040(1)(a)(ii):
(6) The governing authority may adopt and implement as a contractual prerequisite to any exemption granted pursuant to RCW 82.92.020:
7 SSB 5884 level and apprentice workers on residential and commercial construction;
7 SB 5884 level and apprentice workers on residential and commercial construction;
(7) Before changing any adopted standards, guidelines, requirements, or conditions under subsections (5) and (6) of this section, the governing authority must notify all taxing districts in the area of reduced affordability requirements of the proposed changes.
(7) Before changing any adopted standards, guidelines, requirements, or conditions under subsections (5) and (6) of this section, the governing authority must notify all taxing districts in the residential targeted area of the proposed changes.
8 SSB 5884 (3) The city must notify the conditional recipient within 30 days that a tax deferral under this chapter is denied if the city determines that:
8 SB 5884 (3) The city must notify the conditional recipient within 30 days that a tax deferral under this chapter is denied if the city determines that:
9 SSB 5884 initiation of the construction of the investment project.
9 SB 5884 initiation of the construction of the investment project.
If a recipient of a conditional certificate of program approval issued by the city submits an application for a sales and use tax deferral certificate to the department after initiation of construction of the investment project the deferral certificate only applies to applicable purchases made on or after the effective date of the deferral certificate.
(2) No certificate may be issued for an investment project that has already received a deferral under Title 82 RCW.
(2) No certificate may be issued for an investment project that has already received a deferral under chapter 82.60 RCW or this chapter.
p.
(3) The department must keep a running total of all estimated sales and use tax deferrals provided under this chapter during each fiscal biennium.
10 SSB 5884 (3) The department must keep a running total of all estimated sales and use tax deferrals provided under this chapter during each fiscal biennium.
(((3))) (4) The deferral certificate is valid during active construction of a qualified investment project and expires on the day p.
(((3))) (4) The deferral certificate is valid during active construction of a qualified investment project and expires on the day the city issues a certificate of occupancy for the investment project for which a deferral certificate was issued.
10 SB 5884 the city issues a certificate of occupancy for the investment project for which a deferral certificate was issued.
(3)(a) If, on the basis of the tax performance report under RCW 82.32.534 or other information, the city finds that an investment project is no longer an eligible investment project under this chapter at any time during the calendar year in which the investment project is certified as having been operationally completed, or at any time during any of the nine succeeding calendar years, the city must notify the department and a portion of deferred taxes are immediately due according to the following schedule:
(3)(a) If, on the basis of the tax performance report under RCW 82.32.534 or other information, the city or the department finds that an investment project is no longer an eligible investment project under RCW 82.92.010 at any time during the calendar year in which the investment project is certified as having been operationally completed, or at any time during any of the nine succeeding calendar years, a portion of deferred taxes are immediately due according to the following schedule:
Year in which use Percent of deferred taxes due 1 100 p.
Year in which use Percent of deferred taxes due 1 100 2 90 3 80 4 70 5 60 p.
11 SSB 5884 2 90 3 80 4 70 5 60 6 50 7 40 8 30 9 20 10 10 (b) The department must assess interest at the rate provided for delinquent taxes under chapter 82.32 RCW, but not penalties, retroactively to the date of deferral.
11 SB 5884 6 50 7 40 8 30 9 20 10 10 (b) The department must assess interest at the rate provided for delinquent taxes under chapter 82.32 RCW, but not penalties, retroactively to the date of deferral.
All other penalties and interest applicable to delinquent taxes may be assessed and imposed for delinquent payments under this chapter.
Transfer of ownership does not terminate the deferral.
The deferral is transferred, subject to the successor meeting the eligibility requirements of this chapter, for the remaining periods of the deferral.
The deferral is transferred subject to the successor meeting the eligibility requirements of this chapter for the remaining period of the deferral.
The deferral is transferred subject to the successor meeting the eligibility requirements of this chapter.
If the transferor fails to notify the city and the department within 60 days of the completed sale or transfer, all deferred sales and use taxes are immediately due and payable.
If the transferor fails to notify the city and the department, all deferred sales and use taxes are immediately due and payable.
All other penalties and interest applicable to delinquent taxes may be assessed and imposed for delinquent payments under this chapter.
Sec.
p.
12 SSB 5884 Sec.
(2) The legislature categorizes ((this)) these tax preferences as ones intended to induce certain designated behavior by taxpayers, as indicated in RCW 82.32.808(2)(a).
p.
12 SB 5884 (2) The legislature categorizes ((this)) these tax preferences as ones intended to induce certain designated behavior by taxpayers, as indicated in RCW 82.32.808(2)(a).
NEW SECTION.
Sec.
12.
This act applies to projects that initiate construction on or after the effective date of this section.
13 SSB 5884
13 SB 5884
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Action History

  1. Public hearing in the Senate Committee on Ways & Means at 4:00 PM.

  2. Referred to Ways & Means.

  3. Minority; without recommendation.

  4. Minority; do not pass.

  5. And refer to Ways & Means.

  6. HSG - Majority; 1st substitute bill be substituted, do pass.

  7. Executive action taken in the Senate Committee on Housing at 10:30 AM.

  8. Public hearing in the Senate Committee on Housing at 10:30 AM.

  9. First reading, referred to Housing.

  10. Prefiled for introduction.

Sponsors

Sponsorship breakdown

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1 sponsors · 6 co-sponsors · 144 not signed on

Sponsors (1)

Co-sponsors (6)

Not signed on (144)

144 members have not signed on to this bill.

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"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

Subjects

taxation housing
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Frequently asked questions

Who sponsors SB 5884?
SB 5884 is sponsored by Sharon Shewmake (Democrat), T'wina Nobles (Democrat), Liz Lovelett (Democrat), Noel Frame (Democrat), Steve Conway (Democrat), Yasmin Trudeau (Democrat), and Marcus Riccelli (Democrat).
What is the current status of SB 5884?
This bill has passed the Senate. Introduced December 15, 2025. It now moves to the second chamber.
Where can I track SB 5884?
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