August 18, 2023

Will the 2023 Washington legislative action help solve the state housing deficit?


Washington State urban centers, like most growing communities in the United States, are facing a significant housing crisis. Recent polling shows that housing costs and homelessness are the two most important issues on Washingtonians’ minds. Governor Jay Inslee speaks regularly about the crisis and his recent proposed budget highlighted the fact that the state’s overall housing construction deficit falls somewhere between 80,000-140,000 units, making Washington the fifth worst in the nation for the under-production of housing. To tackle the housing crisis, the legislature recently passed a bevy of bills to promote housing production. We discuss several of them below, each of which could provide meaningful relief to the development community and help spur construction statewide.

Adaptive Reuse

House Bill 1042 requires local jurisdictions to update their zoning codes and remove a host of poison pills that otherwise stymie the conversion of commercial buildings into housing. The bill allows up to a 50 percent density bonus, prohibits requiring greater parking than is already onsite, does away with many of the discretionary land use approvals that can cause development delays, and limits the type of structural and energy upgrades that a jurisdiction can require as part of a conversion. HB 1042 should greatly ease the regulatory burdens associated with adaptive reuse and unlock the potential of a great number of older, underutilized commercial buildings.

Clear and Objective Standards

Taking inspiration from an Oregon needed-housing statute, House Bill 1293 requires local jurisdictions to apply only clear and objective regulations to the exterior design of new developments, except in the case of designated landmarks or projects located in historic districts. The bill requires housing-related regulations (i.e. zoning codes, development codes, comprehensive plans, etc.) to include only readily ascertainable guidelines, standards, and criteria. This bill could greatly reduce the uncertainty associated with housing development and ensure that project applicants are better able to navigate and manage local regulatory timelines. Oregon builders have used the state needed-housing statute to great success, and our firm has won several high profile cases with the help of the statute.

Project-Specific Environmental Review

Long the boon of Washington Builders, the state environmental regulations, or SEPA, can add significant cost – in the form of both time and money – to housing developments. Senate Bill 5412 helps ease SEPA review and provides categorical exemptions for most residential infill developments. The bill applies to all projects that include residential units within the incorporated areas of an urban growth area or middle housing within the unincorporated areas of an urban growth area. While SB 5412 does require local jurisdictions to stay up to date on their own environmental review, once implemented, the bill could help new projects avoid significant uncertainty and risk.

Transit-Oriented Development

While still working its way through the legislative process, Senate Bill 5466 could dramatically reshape the housing market in Washington. Similar to regulations currently in place in Los Angeles, the bill would require local jurisdictions to allow for significantly greater density and developable floor area near high-frequency public transit stops. The bill seeks to better align public transportation with density. While final language is still uncertain, SB 5466, or a similar bill in the future, could greatly increase development rights in most major cores throughout the state.

Tags: Construction, Real Estate and Land Use, Construction and Development, Homebuilding

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