Multiple-unit dwellings/tax

AN ACT Relating to the property tax exemptions for new and 1
rehabilitated multiple-unit dwellings in urban centers without 2
extending the expiration date of the exemptions or expanding the 3
exemptions to conversions of market rate residential buildings to 4
affordable housing; and amending RCW 84.14.010, 84.14.020, 84.14.021, 5
84.14.040, 84.14.060, 84.14.070, 84.14.100, and 84.14.110.6
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:7
Sec. 1. RCW 84.14.010 and 2024 c 332 s 17 are each amended to 8
read as follows: 9
The definitions in this section apply throughout this chapter 10
unless the context clearly requires otherwise. 11
(1) "Affordable housing" means residential housing ((that is 12
rented by a person or household whose )) with monthly ((housing)) 13
costs, including utilities other than telephone, that do not exceed 14
((thirty)) 30 percent of the ((household's)) monthly income of a low-15
income or moderate-income household . ((For the purposes of housing 16
intended for owner occupancy, "affordable housing" means residential 17
housing that is within the means of low or moderate -income 18
households.))19
(2) "Campus facilities master plan" means the area that is 20
defined by the University of Washington as necessary for the future 21
H-0612.1
HOUSE BILL 1494
State of Washington 69th Legislature 2025 Regular Session
By Representatives Ramel, Donaghy, Nance, Walen, Duerr, Reed,
Parshley, and Salahuddin
Read first time 01/21/25. Referred to Committee on Finance.
p. 1 HB 1494
growth and development of its campus facilities for campuses 1
authorized under RCW 28B.45.020. 2
(3) "City" means either (a) a city or town with a population of 3
at least ((fifteen thousand )) 15,000, (b) the largest city or town, 4
if there is no city or town with a population of at least ((fifteen 5
thousand)) 15,000, located in a county planning under the growth 6
management act, (c) a city or town with a population of at least 7
((five thousand)) 5,000 located in a county subject to the provisions 8
of RCW 36.70A.215, or (d) any city that otherwise does not meet the 9
qualifications under (a) through (c) of this subsection, until 10
December 31, 2031, that complies with RCW 84.14.020(1)(a)(iii) or 11
84.14.021(1)(b). 12
(4) "Conversion" means the conversion of a nonresidential 13
building, in whole or in part, to multiple-unit housing under this 14
chapter. 15
(5) "County" means a county with an unincorporated population of 16
at least 170,000. 17
(6) "Governing authority" means the local legislative authority 18
of a city or a county having jurisdiction over the property for which 19
an exemption may be applied for under this chapter.20
(7) "Growth management act" means chapter 36.70A RCW.21
(8) "Household" means a single person, family, or unrelated 22
persons living together. 23
(9) "Low-income household" means a single person, family, or 24
unrelated persons living together whose adjusted income is at or 25
below ((eighty)) 80 percent of the median family income adjusted for 26
family size, for the county, city, or metropolitan statistical area, 27
where the project is located, as reported by the United States 28
department of housing and urban development. 29
(10) "Moderate-income household" means a single person, family, 30
or unrelated persons living together whose adjusted income is more 31
than ((eighty)) 80 percent but is at or below ((one hundred fifteen)) 32
115 percent of the median family income adjusted for family size, for 33
the county, city, or metropolitan statistical area, where the project 34
is located, as reported by the United States department of housing 35
and urban development. 36
(11) "Multiple-unit housing" means a building or a group of 37
buildings having four or more dwelling units not designed or used as 38
transient accommodations and not including hotels and motels. 39
Multifamily units may result from new construction or rehabilitated 40
p. 2 HB 1494
or conversion of vacant, underutilized, or substandard buildings to 1
multifamily housing. 2
(12) "Owner" means the property owner of record.3
(13) "Permanent residential occupancy" means multiunit housing 4
that provides either rental or owner occupancy on a nontransient 5
basis. This includes owner-occupied or rental accommodation that is 6
leased for a period of at least one month. This excludes hotels and 7
motels that predominately offer rental accommodation on a daily or 8
weekly basis. 9
(14) "Rehabilitation improvements" means modifications to 10
existing structures, that are vacant for ((twelve)) 12 months or 11
longer, that are made to achieve a condition of substantial 12
compliance with existing building codes or modification to existing 13
occupied structures which increase the number of multifamily housing 14
units. 15
(15) "Residential targeted area" means an area within an urban 16
center or urban growth area that has been designated by the governing 17
authority as a residential targeted area in accordance with this 18
chapter. With respect to designations after July 1, 2007, 19
"residential targeted area" may not include a campus facilities 20
master plan. 21
(16) (("Rural county" means a county with a population between 22
fifty thousand and seventy-one thousand and bordering Puget Sound.23
(17))) "Substantial compliance" means compliance with local 24
building or housing code requirements that are typically required for 25
rehabilitation as opposed to new construction. 26
(((18))) (17) "Urban center" means a compact identifiable 27
district where urban residents may obtain a variety of products and 28
services. An urban center must contain: 29
(a) Several existing or previous, or both, business 30
establishments that may include but are not limited to shops, 31
offices, banks, restaurants, governmental agencies;32
(b) Adequate public facilities including streets, sidewalks, 33
lighting, transit, domestic water, and sanitary sewer systems; and34
(c) A mixture of uses and activities that may include housing, 35
recreation, and cultural activities in association with either 36
commercial or office, or both, use. 37
Sec. 2. RCW 84.14.020 and 2021 c 187 s 3 are each amended to 38
read as follows: 39
p. 3 HB 1494
(1)(a) The value of new housing construction, conversion, and 1
rehabilitation improvements qualifying under this chapter is exempt 2
from ad valorem property taxation, as follows: 3
(i) For properties for which applications for certificates of tax 4
exemption eligibility are submitted under this chapter before July 5
22, 2007, the value is exempt for ((ten)) 10 successive years 6
beginning January 1 st of the year immediately following the calendar 7
year of issuance of the certificate; 8
(ii) For properties for which applications for certificates of 9
tax exemption eligibility are submitted under this chapter on or 10
after July 22, 2007, the value is exempt: 11
(A) For eight successive years beginning January 1st of the year 12
immediately following the calendar year of issuance of the 13
certificate; 14
(B) For ((twelve)) 12 successive years beginning January 1st of 15
the year immediately following the calendar year of issuance of the 16
certificate, if the property otherwise qualifies for the exemption 17
under this chapter and meets the conditions in this subsection 18
(1)(a)(ii)(B). For the property to qualify for the ((twelve)) 12-year 19
exemption under this subsection, the applicant must commit to renting 20
or selling at least ((twenty)) 20 percent of the multifamily housing 21
units as affordable housing units to either low-income ((and)) or 22
moderate-income households, or both, and the property must satisfy 23
that commitment and any additional affordability and income 24
eligibility conditions adopted by the local government under this 25
chapter. In the case of projects intended exclusively for owner 26
occupancy, the local government must require the applicant to record 27
a covenant or deed restriction that ensures the affordability 28
requirements and other conditions of the exemption are met, and the 29
minimum requirement of this subsection (1)(a)(ii)(B) may be satisfied 30
solely through housing affordable to moderate-income households; or31
(C) For 20 successive years beginning January 1st of the year 32
immediately following the calendar year of issuance of the 33
certificate, if the property otherwise qualifies for the exemption 34
under this chapter and meets the conditions in this subsection 35
(1)(a)(ii)(C). For the property to qualify for the 20-year exemption 36
under this subsection, the project must be located within one mile of 37
high capacity transit of at least 15 minute scheduled frequency, in a 38
city that has implemented ((, as of July 25, 2021, )) a mandatory 39
inclusionary zoning requirement for affordable housing that ensures 40
p. 4 HB 1494
affordability of housing units for a period of at least 99 years and 1
that has a population of ((no more than 65,000 as measured on July 2
25, 2021)) at least 15,000 . To qualify for the exemption provided in 3
this subsection (1)(a)(ii)(C), the applicant must commit to renting 4
at least 20 percent of the dwelling units as affordable to low-income 5
households for a term of at least 99 years, and the property must 6
satisfy that commitment and all required affordability and income 7
eligibility conditions adopted by the local government under this 8
chapter. A city must require the applicant to record a covenant or 9
deed restriction that ensures the continuing rental of units subject 10
to these affordability requirements consistent with the conditions in 11
this subsection (1)(a)(ii)(C) for a period of no less than 99 years. 12
The covenant or deed restriction must also address criteria and 13
policies to maintain public benefit if the property is converted to a 14
use other than which continues to provide for permanently affordable 15
low-income housing consistent with this subsection (1)(a)(ii)(C); and16
(iii) Until December 31, 2026, for a city as defined in RCW 17
84.14.010(3)(d), for 12 successive years beginning January 1st of the 18
year immediately following the calendar year of issuance of the 19
certificate, if the property otherwise qualifies for the exemption 20
under this chapter and meets the conditions in this subsection 21
(1)(a)(iii). For the property to qualify for the 12-year exemption 22
under this subsection, the applicant must commit to renting or 23
selling at least 20 percent of the multifamily housing units as 24
affordable housing units to either low-income ((and)) or moderate-25
income households, or both, the property must satisfy that commitment 26
and any additional affordability and income eligibility conditions 27
adopted by the local government under this chapter, and the area must 28
be zoned to have an average minimum density equivalent to 15 dwelling 29
units or more per gross acre ((, or for cities with a population over 30
20,000, the area must be zoned to have an average minimum density 31
equivalent to 25 dwelling units or more per gross acre )). In the case 32
of projects intended exclusively for owner occupancy, the minimum 33
requirement of this subsection (1)(a)(iii) may be satisfied solely 34
through housing affordable to either low-income or moderate-income 35
households, or both. 36
(b) The exemptions provided in (a)(i) through (iii) of this 37
subsection do not include the value of land or nonhousing-related 38
improvements not qualifying under this chapter. 39
p. 5 HB 1494
(c) For properties receiving an exemption as provided in 1
(a)(ii)(B) of this subsection that are in compliance with existing 2
contracts and where the certificate of tax exemption is set to expire 3
after June 11, 2020, but before December 31, 2021, the exemption is 4
extended until December 31, 2021, provided that the property must 5
satisfy any eligibility criteria or limitations provided in this 6
chapter as a condition to the existing exemption for a given property 7
continue to be met. For all properties eligible to receive an 8
extension pursuant to this subsection (1)(c), the city or county that 9
issued the initial certificate of tax exemption, as required in RCW 10
84.14.090, must notify the county assessor and the applicant of the 11
extension of the certificate of tax exemption. 12
(d) A county subject to the criteria for a residential targeted 13
area in RCW 84.14.040(1)(d)(ii) may not approve a certificate of tax 14
exemption eligibility for the eight-year exemption authorized under 15
(a)(ii)(A) of this subsection (1).16
(2) When a local government adopts guidelines pursuant to RCW 17
84.14.030(2) and includes conditions that must be satisfied with 18
respect to individual dwelling units, rather than with respect to the 19
multiple-unit housing as a whole or some minimum portion thereof, the 20
exemption may, at the local government's discretion, be limited to 21
the value of the qualifying improvements allocable to those dwelling 22
units that meet the local guidelines. 23
(3) In the case of rehabilitation of existing buildings, the 24
exemption does not include the value of improvements constructed 25
prior to the submission of the application required under this 26
chapter. The incentive provided by this chapter is in addition to any 27
other incentives, tax credits, grants, or other incentives provided 28
by law. 29
(4) This chapter does not apply to increases in assessed 30
valuation made by the assessor on nonqualifying portions of building 31
and value of land nor to increases made by lawful order of a county 32
board of equalization, the department of revenue, or a county, to a 33
class of property throughout the county or specific area of the 34
county to achieve the uniformity of assessment or appraisal required 35
by law. 36
(5) At the conclusion of the exemption period, the value of the 37
new housing construction, conversion, or rehabilitation improvements 38
must be considered as new construction for the purposes of chapters 39
p. 6 HB 1494
84.55 and 36.21 RCW as though the property was not exempt under this 1
chapter. 2
(6) For properties that qualified for, satisfied the conditions 3
of, and utilized the exemption under subsection (1)(a)(ii)(A) or (B) 4
of this section, following the initial exemption period or the 5
extension period authorized in subsection (1)(c) of this section, the 6
exemption period may be extended for an additional 12 years for 7
projects that are within 18 months of expiration contingent on city 8
or county approval. For the property to qualify for an extension 9
under this subsection (6), the applicant must meet at a minimum the 10
locally adopted requirements for the property to qualify for an 11
exemption under subsection (1)(a)(ii)(B) of this section as 12
applicable at the time of the extension application, and the 13
applicant commits to renting or selling at least 20 percent of the 14
multifamily housing units as affordable housing units for low-income 15
households. 16
(7) At the end of both the ((tenth)) 10th and ((eleventh)) 11th 17
years of an extension, for ((twelve)) 12-year extensions of the 18
exemption, applicants must provide tenants of rent-restricted units 19
with notification of intent to provide the tenant with rental 20
relocation assistance as provided in subsection (8) of this section.21
(8)(a) Except as provided in (b) of this subsection, for any 12-22
year exemption authorized under subsection (1)(a)(ii)(B) or (iii) of 23
this section after July 25, 2021, or for any 12-year exemption 24
extension authorized under subsection (6) of this section, at the 25
expiration of the exemption the applicant must provide tenant 26
relocation assistance in an amount equal to one month's rent to a 27
qualified tenant within the final month of the qualified tenant's 28
lease. To be eligible for tenant relocation assistance under this 29
subsection, the tenant must occupy an income-restricted unit at the 30
time the exemption expires and must qualify as a low-income household 31
under this chapter at the time relocation assistance is sought.32
(b) If affordability requirements consistent, at a minimum, with 33
those required under subsection (1)(a)(ii)(B) or (iii) of this 34
section remain in place for the unit after the expiration of the 35
exemption, relocation assistance in an amount equal to one month's 36
rent must be provided to a qualified tenant within the final month of 37
a qualified tenant's lease who occupies an income-restricted unit at 38
the time those additional affordability requirements cease to apply 39
to the unit. 40
p. 7 HB 1494
(9) For compliance with the affordability requirements of 1
subsection (1)(a)(ii)(B) or (C) or (a)(iii) of this section, a low-2
income or moderate-income household that initially qualifies for an 3
income-restricted rental unit may continue to qualify as low-income 4
or moderate-income until their adjusted household income exceeds 150 5
percent of the established income limit.6
(10) No new exemptions may be provided under this section 7
beginning on or after January 1, 2032. No extensions may be granted 8
under subsection (6) of this section on or after January 1, 2046.9
Sec. 3. RCW 84.14.021 and 2021 c 187 s 7 are each amended to 10
read as follows: 11
(1)(a) The value of new housing construction, conversion, and 12
rehabilitation improvements qualifying under this chapter is exempt 13
from ad valorem property taxation, as follows: For 20 successive 14
years beginning January 1st of the year immediately following the 15
calendar year of issuance of the certificate, if the property 16
otherwise qualifies for the exemption under this chapter and meets 17
the conditions in this section. For the property to qualify for the 18
20-year exemption under this section, at least 25 percent of the 19
units must be built by or sold to a qualified nonprofit or local 20
government that will assure permanent affordable homeownership. The 21
remaining 75 percent of units may be rented or sold at market rates.22
(b) Until December 31, 2031, for a city as defined in RCW 23
84.14.010(3)(d), in any city the value of new housing construction, 24
conversion, and rehabilitation improvements qualifying under this 25
chapter is exempt from ad valorem property taxation, as follows: For 26
20 successive years beginning January 1st of the year immediately 27
following the calendar year of issuance of the certificate, if the 28
property otherwise qualifies for the exemption under this chapter and 29
meets the conditions in this section. For the property to qualify for 30
the 20-year exemption under this section, at least 25 percent of the 31
units must be sold to a qualified nonprofit or local government 32
partner that will assure permanent affordable homeownership. The 33
remaining 75 percent of units may be rented or sold at market rates. 34
The area must be zoned to have an average minimum density equivalent 35
to 15 dwelling units or more per gross acre ((, or for cities with a 36
population over 20,000, the area must be zoned to have an average 37
minimum density equivalent to 25 dwelling units or more per gross 38
acre)). 39
p. 8 HB 1494
(2) Permanently affordable homeownership units or permanently 1
affordable rental units must be sold or rented to low-income 2
households ((earning no more than 80 percent of the average median 3
income for the city or local jurisdiction in which the unit is 4
located)). 5
(3) A local jurisdiction may assign and collect an administration 6
fee at each point of sale to cover the administrative costs for 7
oversight of the program to maintain permanently affordable housing 8
units consistent with this section. 9
(4) The exemptions in this section do not include the value of 10
land or nonhousing-related improvements not qualifying under this 11
chapter. 12
(5) At the conclusion of the exemption period, the value of the 13
new housing construction, conversion, or rehabilitation improvements 14
must be considered as new construction for the purposes of chapters 15
84.55 and 36.21 RCW as though the property was not exempt under this 16
chapter. 17
(6) For purposes of this section, "permanently affordable 18
homeownership" means homeownership that, in addition to meeting the 19
definition of "affordable housing" in RCW 43.185A.010, is:20
(a) Sponsored by a nonprofit organization or governmental entity;21
(b) Subject to a ground lease or deed restriction that includes:22
(i) A resale restriction designed to provide affordability for 23
future low and moderate-income homebuyers; 24
(ii) A right of first refusal for the sponsor organization to 25
purchase the home at resale; and 26
(iii) A requirement that the sponsor must approve any 27
refinancing, including home equity lines of credit; and28
(c) Sponsored by a nonprofit organization or governmental entity 29
and the sponsor organization: 30
(i) Executes a new ground lease or deed restriction with a 31
duration of at least 99 years at the initial sale and with each 32
successive sale; and 33
(ii) Supports homeowners and enforces the ground lease or deed 34
restriction. 35
(7) The department of commerce must develop a template for 36
permanent affordability for home or condo ownership through deed 37
restrictions that can be used by a city or local government to ensure 38
compliance with this section. 39
p. 9 HB 1494
(8) No new exemptions may be provided under this section 1
beginning on or after January 1, 2032. 2
Sec. 4. RCW 84.14.040 and 2021 c 187 s 4 are each amended to 3
read as follows: 4
(1) The following criteria must be met before an area may be 5
designated as a residential targeted area: 6
(a) The area must be within an urban center, as determined by the 7
governing authority; 8
(b) The area must lack, as determined by the governing authority, 9
sufficient available, desirable, and convenient residential housing, 10
including affordable housing, to meet the needs of the public who 11
would be likely to live in the urban center, if the affordable, 12
desirable, attractive, and livable places to live were available;13
(c) The providing of additional housing opportunity, including 14
affordable housing, in the area, as determined by the governing 15
authority, will assist in achieving one or more of the stated 16
purposes of this chapter; 17
(d) If the residential targeted area is designated by a county, 18
the area must be located in an unincorporated area of the county that 19
is within an urban growth area under RCW 36.70A.110 and the area must 20
be: (i) In a ((rural county, served by a sewer system and designated 21
by a county prior to January 1, 2013; or (ii) in a )) county that 22
includes a campus of an institution of higher education, as defined 23
in RCW 28B.92.030, where at least ((one thousand two hundred )) 1,200 24
students live on campus during the academic year; ((and (iii) until 25
July 15, 2024, )) or (ii) in a county seeking to promote transit 26
supportive densities and efficient land use in an area that is 27
located within a designated urban growth area and within ((.25)) 0.5 28
miles of a corridor where bus service is scheduled at least ((every 29
thirty minutes for no less than 10 hours per weekday )) 10 times per 30
day in each direction and is in service or is planned for service to 31
begin within five years of designation in a transit development plan 32
as required under RCW 35.58.2795; ((and))33
(e) For a residential targeted area designated by a county after 34
July 25, 2021, the county governing authority must conduct an 35
evaluation of the risk of potential displacement of residents 36
currently living in the area if the tax incentives authorized in this 37
chapter were to be used in the area. The county may use an existing 38
analysis if one exists. An area may not be designated as a 39
p. 10 HB 1494
residential targeted area unless: (i) The evaluation finds that the 1
risk of displacement is minimal; or (ii) the governing authority 2
mitigates the risk of displacement with locally adopted mitigation 3
measures such as, but not limited to, ensuring that those directly or 4
indirectly displaced have a first right of refusal to occupy the 5
newly created dwelling units receiving an exemption under this 6
chapter, including the affordable units if they otherwise meet the 7
qualifications; and8
(f) For a residential targeted area designated by a city after 9
the effective date of this section, the city must determine that 10
designation of the area is in compliance with the antidisplacement 11
requirements in RCW 36.70A.070(2). 12
(2) For the purpose of designating a residential targeted area or 13
areas, the governing authority may adopt a resolution of intention to 14
so designate an area as generally described in the resolution. The 15
resolution must state the time and place of a hearing to be held by 16
the governing authority to consider the designation of the area and 17
may include such other information pertaining to the designation of 18
the area as the governing authority determines to be appropriate to 19
apprise the public of the action intended. 20
(3) The governing authority must give notice of a hearing held 21
under this chapter by publication of the notice once each week for 22
two consecutive weeks, not less than seven days, nor more than 23
((thirty)) 30 days before the date of the hearing in a paper having a 24
general circulation in the city or county where the proposed 25
residential targeted area is located. The notice must state the time, 26
date, place, and purpose of the hearing and generally identify the 27
area proposed to be designated as a residential targeted area. The 28
governing authority must send a copy of the notice to all taxing 29
districts in the proposed residential targeted area.30
(4) Following the hearing, or a continuance of the hearing, the 31
governing authority may designate all or a portion of the area 32
described in the resolution of intent as a residential targeted area 33
if it finds, in its sole discretion, that the criteria in subsections 34
(1) through (3) of this section have been met. 35
(5) After designation of a residential targeted area, the 36
governing authority must adopt and implement standards and guidelines 37
to be utilized in considering applications and making the 38
determinations required under RCW 84.14.060. The standards and 39
p. 11 HB 1494
guidelines must establish basic requirements for both new 1
construction and rehabilitation, which must include:2
(a) Application process and procedures; 3
(b) Income and rent standards for affordable units;4
(c) Requirements that address demolition of existing structures 5
and site utilization; and 6
(d) Building requirements that may include elements addressing 7
parking, height, density, environmental impact, and compatibility 8
with the existing surrounding property and such other amenities as 9
will attract and keep permanent residents and that will properly 10
enhance the livability of the residential targeted area in which they 11
are to be located. 12
(6)(a) The governing authority may adopt and implement, either as 13
conditions to eight -year exemptions or as conditions to an extended 14
exemption period under RCW 84.14.020(1)(a)(ii) (B) or (C), or as 15
conditions to any combination of exemptions authorized under this 16
chapter, more stringent income eligibility, rent, or sale price 17
limits, including limits that apply to a higher percentage of units, 18
than the minimum conditions for an extended exemption period under 19
RCW 84.14.020(1)(a)(ii) (B) or (C). 20
(b) Additionally, a governing authority may adopt and implement 21
as a contractual prerequisite to any exemption granted pursuant to 22
RCW 84.14.020: 23
(i) A requirement that applicants pay at least the prevailing 24
rate of hourly wage established under chapter 39.12 RCW for journey 25
level and apprentice workers on residential and commercial 26
construction; 27
(ii) Payroll record requirements consistent with RCW 28
39.12.120(1); 29
(iii) Apprenticeship utilization requirements consistent with RCW 30
39.04.310; and 31
(iv) A contracting inclusion plan developed in consultation with 32
the office of minority and women's business enterprises.33
(7) For any multiunit housing located in an unincorporated area 34
of a county, a property owner seeking tax incentives under this 35
chapter must commit to renting or selling at least ((twenty)) 20 36
percent of the multifamily housing units as affordable housing units 37
to ((low and )) either low-income or moderate-income households , or 38
both. In the case of multiunit housing intended exclusively for owner 39
occupancy, the minimum requirement of this subsection (7) may be 40
p. 12 HB 1494
satisfied solely through housing affordable to moderate-income 1
households. 2
(8) Nothing in this section prevents a governing authority from 3
adopting and implementing additional requirements to any exemption 4
granted under RCW 84.14.020. 5
(9) Before changing any adopted standards, guidelines, 6
requirements, or conditions under subsections (5) and (6) of this 7
section, the governing authority must notify all taxing districts in 8
the residential targeted area of the proposed changes.9
Sec. 5. RCW 84.14.060 and 2014 c 96 s 5 are each amended to read 10
as follows: 11
(1) The duly authorized administrative official or committee of 12
the city or county may approve the application if it finds that:13
(a) A minimum of four new units are being constructed or in the 14
case of occupied rehabilitation or conversion a minimum of four 15
additional multifamily units are being developed; 16
(b) If applicable, the proposed multiunit housing project meets 17
the affordable housing requirements as described in RCW 84.14.020;18
(c) The proposed project is or will be, at the time of 19
completion, in conformance with all local plans and regulations that 20
apply at the time the application is approved; 21
(d) The owner has complied with all standards and guidelines 22
adopted by the city or county under this chapter; and23
(e) The site is located in a residential targeted area of an 24
urban center or urban growth area that has been designated by the 25
governing authority in accordance with procedures and guidelines 26
indicated in RCW 84.14.040. 27
(2) An application may not be approved after July 1, 2007, if any 28
part of the proposed project site is within a campus facilities 29
master plan, except as provided in RCW 84.14.040(1)(d).30
(((3) An application may not be approved for a residential 31
targeted area in a rural county on or after January 1, 2020.))32
Sec. 6. RCW 84.14.070 and 2012 c 194 s 7 are each amended to 33
read as follows: 34
(1) The governing authority or an administrative official or 35
commission authorized by the governing authority must approve or deny 36
an application filed under this chapter within ((ninety)) 90 days 37
after receipt of the application. 38
p. 13 HB 1494
(2) If the application is approved, the city or county must issue 1
the owner of the property a conditional certificate of acceptance of 2
tax exemption and submit a copy of the certificate to the county 3
assessor. The certificate must contain a statement by a duly 4
authorized administrative official of the governing authority that 5
the property has complied with the required findings indicated in RCW 6
84.14.060. 7
(3) If the application is denied by the authorized administrative 8
official or commission authorized by the governing authority, the 9
deciding administrative official or commission must state in writing 10
the reasons for denial and send the notice to the applicant at the 11
applicant's last known address within ((ten)) 10 days of the denial.12
(4) Upon denial by a duly authorized administrative official or 13
commission, an applicant may appeal the denial to the governing 14
authority within ((thirty)) 30 days after receipt of the denial. The 15
appeal before the governing authority must be based upon the record 16
made before the administrative official with the burden of proof on 17
the applicant to show that there was no substantial evidence to 18
support the administrative official's decision. The decision of the 19
governing body in denying or approving the application is final.20
Sec. 7. RCW 84.14.100 and 2021 c 187 s 5 are each amended to 21
read as follows: 22
(1) Thirty days after the anniversary of the date of the 23
certificate of tax exemption and each year for the tax exemption 24
period, the owner of the rehabilitated or newly constructed property, 25
or the qualified nonprofit or local government that will assure 26
permanent affordable homeownership for at least 25 percent of the 27
units for properties receiving an exemption under RCW 84.14.021, must 28
file with a designated authorized representative of the city or 29
county an annual report indicating the following: 30
(a) A statement of occupancy and vacancy of the rehabilitated or 31
newly constructed property during the ((twelve)) 12 months ending 32
with the anniversary date; 33
(b) A certification by the owner that the property has not 34
changed use and, if applicable, that the property has been in 35
compliance with the affordable housing requirements as described in 36
RCW 84.14.020 since the date of the certificate approved by the city 37
or county; 38
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(c) A description of changes or improvements constructed after 1
issuance of the certificate of tax exemption; and 2
(d) Any additional information requested by the city or county in 3
regards to the units receiving a tax exemption. 4
(2) All cities or counties, which issue certificates of tax 5
exemption for multiunit housing that conform to the requirements of 6
this chapter, must report annually by April 1st of each year, 7
beginning in 2007, to the department of commerce. A city or county 8
must be in compliance with the reporting requirements of this section 9
to offer certificates of tax exemption for multiunit housing 10
authorized in this chapter. The report must include the following 11
information: 12
(a) The number of tax exemption certificates granted;13
(b) The total number and type of units produced or to be 14
produced; 15
(c) The number, size, and type of units produced or to be 16
produced meeting affordable housing requirements; 17
(d) The actual development cost of each unit produced;18
(e) The total monthly rent or total sale amount of each unit 19
produced; 20
(f) The annual household income and household size for each of 21
the affordable units receiving a tax exemption and a summary of these 22
figures for the city or county; ((and))23
(g) An analysis of the affordable units produced or to be 24
produced, including unit size, number of bedrooms, and income 25
requirements, and how the units will support the existing and 26
projected housing needs identified under RCW 36.70A.070(2)(a); and27
(h) The value of the tax exemption for each project receiving a 28
tax exemption and the total value of tax exemptions granted.29
(3)(a) The department of commerce must adopt and implement a 30
program to effectively audit or review that the owner or operator of 31
each property for which a certificate of tax exemption has been 32
issued, except for those properties receiving an exemption that are 33
owned or operated by a nonprofit or for those properties receiving an 34
exemption from a city or county that operates an independent audit or 35
review program, is offering the number of units at rents as committed 36
to in the approved application for an exemption and that the tenants 37
are being properly screened to be qualified for an income-restricted 38
unit. The audit or review program must be adopted in consultation 39
with local governments and other stakeholders and may be based on 40
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auditing a percentage of income-restricted units or properties 1
annually. A private owner or operator of a property for which a 2
certificate of tax exemption has been issued under this chapter, must 3
be audited at least once every five years. 4
(b) If the review or audit required under (a) of this subsection 5
for a given property finds that the owner or operator is not offering 6
the number of units at rents as committed to in the approved 7
application or is not properly screening tenants for income-8
restricted units, the department of commerce must notify the city or 9
county and the city or county must impose and collect a sliding scale 10
penalty not to exceed an amount calculated by subtracting the amount 11
of rents that would have been collected had the owner or operator 12
complied with their commitment from the amount of rents collected by 13
the owner or operator for the income-restricted units, with 14
consideration of the severity of the noncompliance. If a subsequent 15
review or audit required under (a) of this subsection for a given 16
property finds continued substantial noncompliance with the program 17
requirements, the exemption certificate must be canceled pursuant to 18
RCW 84.14.110(1)(a). 19
(c) The department of commerce may impose and collect a fee, not 20
to exceed the costs of the audit or review, from the owner or 21
operator of any property subject to an audit or review required under 22
(a) of this subsection. 23
(4) The department of commerce must provide guidance to cities 24
and counties, which issue certificates of tax exemption for multiunit 25
housing that conform to the requirements of this chapter, on best 26
practices in managing and reporting for the exemption programs 27
authorized under this chapter, including guidance for cities and 28
counties to collect and report demographic information for tenants of 29
units receiving a tax exemption under this chapter.30
(5) This section expires January 1, 2058. 31
Sec. 8. RCW 84.14.110 and 2012 c 194 s 10 are each amended to 32
read as follows: 33
(1) If improvements have been exempted under this chapter, the 34
improvements continue to be exempted for the applicable period under 35
RCW 84.14.020, so long as they are not converted to another use and 36
continue to satisfy all applicable conditions. If the owner intends 37
to convert the multifamily development to another use, or if 38
applicable, if the owner intends to discontinue compliance with the 39
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affordable housing requirements as described in RCW 84.14.020 or any 1
other condition to exemption, the owner must notify the assessor 2
within ((sixty)) 60 days of the change in use or intended 3
discontinuance. If, after a certificate of tax exemption has been 4
filed with the county assessor, the authorized representative of the 5
governing authority discovers that a portion of the property is 6
changed or will be changed to a use that is other than residential or 7
that housing or amenities no longer meet the requirements, including, 8
if applicable, affordable housing requirements, as previously 9
approved or agreed upon by contract between the city or county and 10
the owner and that the multifamily housing, or a portion of the 11
housing, no longer qualifies for the exemption, ((the tax exemption 12
must be canceled and)) the following must occur: 13
(a)(i) Additional real property tax must be imposed upon the 14
value of the nonqualifying improvements in the amount that would 15
normally be imposed, plus a penalty must be imposed amounting to 16
((twenty)) 20 percent. This additional tax is calculated based upon 17
the difference between the property tax paid and the property tax 18
that would have been paid if it had included the value of the 19
nonqualifying improvements dated back to the date that the 20
improvements were converted to a nonmultifamily use;21
(((b))) (ii) The tax must include interest upon the amounts of 22
the additional tax at the same statutory rate charged on delinquent 23
property taxes from the dates on which the additional tax could have 24
been paid without penalty if the improvements had been assessed at a 25
value without regard to this chapter; and 26
(((c))) (iii) The additional tax owed together with interest and 27
penalty must become a lien on the land and attach at the time the 28
property or portion of the property is removed from multifamily use 29
or the amenities no longer meet applicable requirements, and has 30
priority to and must be fully paid and satisfied before a 31
recognizance, mortgage, judgment, debt, obligation, or responsibility 32
to or with which the land may become charged or liable. The lien may 33
be foreclosed upon expiration of the same period after delinquency 34
and in the same manner provided by law for foreclosure of liens for 35
delinquent real property taxes. An additional tax unpaid on its due 36
date is delinquent. From the date of delinquency until paid, interest 37
must be charged at the same rate applied by law to delinquent ad 38
valorem property taxes;39
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(b) If the owner or operator is not offering the number of units 1
at rents as committed to in the approved application or is not 2
properly screening tenants for income-restricted units, the city or 3
county may impose and collect a sliding scale penalty not to exceed 4
an amount calculated by subtracting the amount of rents that would 5
have been collected had the owner or operator complied with their 6
commitment from the amount of rents collected by the owner or 7
operator for the income-restricted units, with consideration of the 8
severity of the noncompliance. If the owner or operator is 9
subsequently found to be in substantial noncompliance with the 10
program requirements, the exemption certificate must be canceled 11
pursuant to subsection (a) of this section; or12
(c) If the owner of an income-restricted unit intended solely for 13
owner occupancy causes a project to be out of compliance with any 14
conditions of the exemption, a city or county may implement a sliding 15
fee penalty and assign the highest penalty to the owner who caused 16
the project to be out of compliance and assign a lesser or no penalty 17
to the other owners. A city or county may also cancel the exemption 18
for the noncompliant unit only. 19
(2) Upon a determination that a tax exemption is to be canceled 20
for a reason stated in this section, the governing authority or 21
authorized representative must notify the record owner of the 22
property as shown by the tax rolls by mail, return receipt requested, 23
of the determination to cancel the exemption. The owner may appeal 24
the determination to the governing authority or authorized 25
representative, within ((thirty)) 30 days by filing a notice of 26
appeal with the clerk of the governing authority, which notice must 27
specify the factual and legal basis on which the determination of 28
cancellation is alleged to be erroneous. The governing authority or a 29
hearing examiner or other official authorized by the governing 30
authority may hear the appeal. At the hearing, all affected parties 31
may be heard and all competent evidence received. After the hearing, 32
the deciding body or officer must either affirm, modify, or repeal 33
the decision of cancellation of exemption based on the evidence 34
received. An aggrieved party may appeal the decision of the deciding 35
body or officer to the superior court under RCW 34.05.510 through 36
34.05.598. 37
(3) Upon determination by the governing authority or authorized 38
representative to terminate an exemption, the county officials having 39
possession of the assessment and tax rolls must correct the rolls in 40
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the manner provided for omitted property under RCW 84.40.080. The 1
county assessor must make such a valuation of the property and 2
improvements as is necessary to permit the correction of the rolls. 3
The value of the new housing construction, conversion, and 4
rehabilitation improvements added to the rolls is considered as new 5
construction for the purposes of chapter 84.55 RCW. The owner may 6
appeal the valuation to the county board of equalization under 7
chapter 84.48 RCW and according to the provisions of RCW 84.40.038. 8
If there has been a failure to comply with this chapter, the property 9
must be listed as an omitted assessment for assessment years 10
beginning January 1 of the calendar year in which the noncompliance 11
first occurred, but the listing as an omitted assessment may not be 12
for a period more than three calendar years preceding the year in 13
which the failure to comply was discovered. 14
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