Insurance/affordable units

AN ACT Relating to conducting a study of insurance coverage 1
options for permanently affordable homeownership units; creating a 2
new section; and providing an expiration date. 3
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:4
NEW SECTION. Sec. 1. (1) The office of the insurance 5
commissioner shall conduct a study regarding how projects that 6
develop new permanently affordable homeownership units may utilize 7
different insurance coverage options or approaches to reduce costs 8
related to condominium construction defect liability and maintain 9
commensurate access to insurance coverage.10
(2) The study must be conducted in consultation with: Identified 11
nonprofit organizations and government entities that sponsor 12
permanently affordable homeownership units; authorized insurers of 13
permanently affordable homeownership projects; unauthorized insurers 14
of permanently affordable homeownership projects; and relevant state 15
associations. 16
(3) In conducting the study, the insurance commissioner shall 17
collect and use relevant findings from past insurance market studies 18
conducted by the office of the insurance commissioner on or after 19
December 31, 2017, or other relevant information released on or after 20
H-0681.1
HOUSE BILL 1516
State of Washington 69th Legislature 2025 Regular Session
By Representatives Hill, Taylor, Reed, Simmons, Morgan, Ormsby,
Farivar, Parshley, Gregerson, Macri, Ramel, Pollet, and Salahuddin
Read first time 01/22/25. Referred to Committee on Consumer
Protection & Business.
p. 1 HB 1516
December 31, 2017, that may assist the insurance commissioner in 1
conducting the analysis or making recommendations. 2
(4) Consistent with RCW 43.01.036, the insurance commissioner 3
shall submit a report on its findings to the appropriate committees 4
of the legislature by December 31, 2025. The report must include:5
(a) An actuarial analysis of how the condominium construction 6
defect liability risk pools for nonprofit organizations and 7
government entities that sponsor permanently affordable homeownership 8
units may differ from other models of condominium production, sale, 9
and ownership; 10
(b) An analysis of the role that the commissioner and insurers 11
can play to lower condominium construction defect liability costs for 12
nonprofit organizations and government entities that sponsor 13
permanently affordable homeownership units; and 14
(c) Recommendations for how current or new insurance products and 15
practices may be used to reduce insurance costs for nonprofit 16
organizations and government entities that sponsor permanently 17
affordable homeownership units. 18
(5) For the purposes of this section, "permanently affordable 19
homeownership" means a unit that, in addition to meeting the 20
definition of "affordable housing" in RCW 43.185A.010, is:21
(a) Sponsored by a nonprofit organization or governmental entity;22
(b) Subject to a ground lease or deed restriction, the forms of 23
which may include a ground lease, deed restriction, community land 24
trust lease, or affordability covenant that includes:25
(i) A resale restriction designed to provide affordability for 26
future low and moderate-income homebuyers; 27
(ii) A right of first refusal for the sponsoring organization to 28
purchase the home at resale, except in cases where the sponsor 29
organization is a limited equity cooperative, defined as 30
"cooperative" in RCW 64.90.010, and the sponsor organization is not 31
partnered with a community land trust; and 32
(iii) A requirement that the sponsor must approve any refinancing 33
secured by the home, including home equity lines of credit, except 34
where the sponsor organization is a limited equity cooperative, 35
defined as "cooperative" in RCW 64.90.010, and the sponsor 36
organization is not partnered with a community land trust; and37
(c) Sponsored by a nonprofit organization or governmental entity 38
and the sponsor: 39
p. 2 HB 1516
(i) At the initial sale and at each successive sale of the unit, 1
executes a new ground lease or deed restriction, the forms of which 2
may include a ground lease, deed restriction, community land trust 3
lease, or affordability covenant with a duration of at least 99 4
years; and 5
(ii) Supports the unit's homeowner and enforces the ground lease 6
or deed restriction. 7
(6) This section expires December 31, 2025. 8
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p. 3 HB 1516