April 2024 Government Affairs Report

Washington Realtors Spring Conference- 2024 Legislative Review

• HB 2160-Increasing Housing supply through Transit Oriented Development
  • HB 2160 would have established an increased density allowance within certain distances of major transit stops.
  • The bill would have allowed large upzones based on Floor Area Ratio in Rail, Bus Rapid Transit, and Bus Lines. Higher density near rail, lower along bus lines
  • The bill imposed strict affordability requirements to TOD construction that a majority of the development community could not support.
    • House: 56-40 / Senate: no action taken vote
• HB 2276-Creating new 1% sales tax on Real Estate over $3.025 Million
  • HB 2276 would have established a new 1% sales tax on any real estate transaction with a price over $3.025 million, with funds being dedicated to various affordable housing programs.
  • This new tax would apply most commonly to sales of apartment buildings, commercial real estate, and land sales in the development of new housing.
  • The tax would be in addition to the Real Estate Excise Tax increase in 2020, which is not dedicated to affordable housing and resulted in the highest state real estate transfer tax in the country.
    • Did not have House or Senate Floor Vote
• HB 2114-Rent “Stabilization” (Rent Control)
  • HB 2114 would have established a 7% limit on annual rent increases for residential rental properties (multifamily and single family)
  • Bill passed the House but did not pass the Senate Ways & Means Committee; earlier Senate version did not pass the Senate Housing Committee.
    • House: 54-44, Senate did not have floor vote
• SB 6175-Incentives for Conversion of Non-Residential Buildings
  • Creates new optional sales and use tax exemption program for the conversion of non-residential buildings into residential buildings, if the building provides certain levels of affordable housing.
  • Clarifies that local Multifamily Tax Exemption (MFTE) programs which provide a property tax exemption for projects that provide certain levels of affordability can apply to the conversion of non-residential buildings into residential use.
    • Senate: 48-0, House: 98-0
• SB 6120 Updating the Wildland Urban Interface (WUI) Code
  • Stipulates which portions of the International Wildland Urban Interface Code the State Building Code Council may adopt.
  • Requires the Department of Natural Resources to develop and maintain a statewide wildfire hazard map and a base-level wildfire risk map in coordination with the state fire marshal.
  • Permits cities, counties and towns to complete their own maps of areas at greatest risk from wildfire for use in applying the International Wildland Urban Interface Code.
    • Senate: 48-0, House: 96-0
• SB 5796-Concerning Common Interest Communities
  • Allows the board of an association or any unit owner to amend their governing documents to remove an unlawful restriction based on race, color, religion, national origin, sex, or other personal characteristics.
  • Adopts many of the most recent amendments to the Uniform Common Interest Ownership Act and codifies them into the Washington Uniform Common Interest Ownership Act.
  • Repeals the Horizontal Property Regimes Act, the Washington
  • Condominium Act, the Homeowners' Association Act, and the Land Development Act, effective January 1, 2028.
    • Senate: 32-17, House: 59-37
• HB 1589-Banning the Use of Natural Gas
  • Beginning January 1, 2025, no large combination utility may offer any form of rebate, incentive, or other inducement to residential gas customers to purchase any natural gas appliance or equipment. Until January 1, 2031, this requirement does not apply to:
    • electric heat pumps that include natural gas backups; or
    • commercial and industrial customers.
    • Additionally, beginning January 1, 2031, a large combination utility may not include electric heat pumps with gas backups as part of its electrification programs.Geographically targeted electrification is defined as the transition of a portion of a large combination utility's gas customers with an intent to electrify heating loads of these customers and, in conjunction, to reduce capital and operational costs of gas operations.
      • House: 52-45, Senate: 27-22

 Thurston County Board of County Commissioners-Approved/Habitat Conservation Plan Land Acquisition

• Purchase and Sale agreement for 5 acres of Tenino pocket gopher habitat (TPG). The parcel in question is undeveloped within the TPG service area and this would be the first TPG property acquisition and would provide mitigation credits for development with this service area. Adjacent properties are owned by Puget Sound Energy and as well as Washington Department of Fish and Wildlife and contains Mima mounds and prairie vegetation. The site may also provide mitigation opportunity for the Taylor’s checkerspot butterfly and Oregon vesper sparrow.
• Approved-2024-2025 Official Docket of Comprehensive Plan Amendments
  • Grand Mound West UGA Amendment, Site Specific Map Land Use Plan and Rezoning Amendment
  • Thurston 2045
  • Community-Driven Review of Agricultural Policies and Programs
  • Bar Holding LLC (Salish Landing): Tumwater UGA Sway, Site Specific Map Land Use Plan and rezoning Amendment
  • Capital Improvement Plan
  • Nisqually Subarea Plan Update
  • Martin Way: Site-Specific Map Land Use Plan and Rezoning Amendment
  • Black Lake Quarry: Site Specific Land Use and Rezoning Amendment
  • Grand Mound East UGA Amendment, Site Specific Map Land Use and Rezoning Amendment
  • Tenino UGA Analysis
• Approved-2024-2025 Official Docket of Development Code Amendments.
  • Shoreline Master Program Update
  • Lacey UGA Joint Code Update
  • Amend the Forest Lands Conversion Ordinance and Review Rural Tree Protection Stands
  • Less Restrictive Alternative (LRA) Community Housing Code Update
  • Tumwater UGA Joint Code Update
  • Olympia UGA Joint Code Update
  • Permit Review Process Annual Update
  • New Uses and Related Standards Annual Update
  • Transfer Development Rights and Purchase of Development Rights Program
  • Code Clarification and Correction Annual Update
  • Review SEPA Comment Period Timelines

City of Lacey

• 2024 Climate and Sustainability Update-Informational Only
  • Lacey, a partner in the Thurston Climate Mitigation Collaborative (TCMC), is co-project lead on the Home Energy Score Model Ordinance ready for adoption by the jurisdictions in 2025.
  • The TCMC is designing an Energy Efficiency and Electrification (E3) campaign to kick off in 2025.
  • Solar in Lacey- Lacey is committed to going solar.
    • Link: https://cityoflacey.org/sustainability/solar-in-lacey/
    • Solarize is a nonprofit-sponsored solar energy group purchasing model used to reduce costs and simplify the solar installation process. In 4 steps:
      • Assessment
      • Quote
      • Installation
      • Generation
      • Link: https://olysol.org/solarize/thurston/
    • PSE/Lacey Matching Rebate Program
      • Since August 2023, when the program started, City of Lacey has spent $80,906.10 on direct payments to Lacey residents for energy efficiency upgrades.
      • Lacey has matched 226 rebates for a total of $160,000 paid to Lacey residents from both PSE and Lacey through the matching rebate program.
      • Lacey has spent the most on Furnace upgrades ($39,000) and Heat Pump ($16,600) purchases.
      • Lacey has been awarded $700,000 total for climate planning from Commerce of which $350,000 will be used on comp plan update and the creation of these two new sub-elements:
        • GHG emissions reduction goals
        • Climate Resiliency Goals

 2024 Legislative Review-Informational

• • Comprehensive Plan Deadline
    • PASSED-HB 2296 extends the deadline by 6 months to help ensure robust public input and integration of housing and climate elements
  • Increased Funding for Housing
    • The Housing Trust Fund was increased by $127 million and the document recording fee revenue was backfilled by $62 million.
  • Certified statewide initiatives on the November General Election ballot:
    • I-2117 repealing the Climate Commitment Act
    • I-2109 repealing capital gains tax
  • Bills that failed:
    • SB 5770 would have increased the property tax revenue limit for local property taxes up to 3% in select years
    • HB 2276 would have imposed a new real estate transfer tax (REET) of 1% on the value of the selling prove over $3.025 million.
    • HB 2160 Transit Oriented Development, was passed by the House but failed to pass the Senate Ways and Means Committee
    • HB 2114/SB 5961: Rent Regulation, was passed by the House but failed to pass the Senate Ways and Means Committee
  • Bills that passed:
    • HB 1998: Co-Housing bill requires the city to allow co-living housing on any lot located within the urban growth area that allows at least six multifamily residential units.
    • HB 1589: Provides Puget Sound Energy the regulatory framework to create an Integrated Systems Plan. To reduce regulatory barriers, achieve equitable and transparent outcomes and integrate planning requirements, the UTC may consolidate a large combination utility’s planning requirements for both gas and electric operations into a single integrated system plan that is approved by the UTC.

City of Tumwater Work Session

City Council and Planning Commission Housing Tour (Informational Only)

2025 Comprehensive Plan Periodic Update-

On a ten-year cycle, the City is required to conduct a Growth Management Act periodic update of its Comprehensive Plan and related development regulations.  For the current cycle, the City of Tumwater is required to complete work on the periodic update by December 31, 2025.  Work on the periodic update started in 2022. The updated Comprehensive Plan will address diversity, equity, and inclusion throughout the Plan.

Comprehensive Plan Goal: To provide a sufficient number of single-family dwelling units, multi-family dwelling units, manufactured homes, and group housing to provide an affordable selection of housing to each economic segment of the Tumwater population.

The focus of the tour was on existing middle housing opportunities in Olympia and Tumwater, looking at what has worked and what can be improved. The following topics were discussed during the tour:

• Current City Policies and Regulations
• Design Standards for residential development
• State’s requirements for housing and middle housing

Middle Housing Typologies:

• Small-Equal to or like the size of a typical house in building footprint and size with heights up to 205 stories
  • Example:
    • Stacked or side-by-side duplex (2 units)
    • Cottage housing (3 to 10 units)
    • Triplex or fourplex (3 to 4 units)
  • Medium-slightly larger than the small middle housing with a height up to 2.5 stories
    • Example:
      • Multiplex medium (5 to 10 units)
      • Courtyard medium (6 to 16 unites)
      • Townhouse medium (1 unit)
    • Large-Taller (3 to 4 stories), wider and deeper than small/medium middle housing, still fit on larger lot sizes in residential neighborhoods, designed to fit in with smaller scale residential buildings
      • Example:
        • Multiplex large (7 to 18 units)
        • Courtyard large (20 to 28 units)
        • Townhouse large (1 unit)

Upcoming Open Houses that will be available in person with a separate online component starting the day of the open house and be active for two weeks:

• Wednesday, May 29, 2024-Housing
• Wednesday, July 31, 2024-Climate
• Wednesday, October 2, 2024-Development Code