Home buying by entities

AN ACT Relating to preserving homeownership options by limiting 1
excessive home buying by certain entities; amending RCW 19.86.140; 2
adding a new chapter to Title 19 RCW; creating a new section; and 3
prescribing penalties. 4
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:5
NEW SECTION. Sec. 1. The legislature finds that Washington 6
state is in a housing crisis, with few homes on the market that are 7
affordable to families of moderate incomes. The legislature has taken 8
steps in recent years to boost the state's housing supply through 9
grants and incentive programs, permitting reform, and increasing 10
density in certain land use zones. However, the state has seen the 11
average home price in Washington rise 55 percent between 2018 to 12
2021. During roughly the same time period, the change in share of 13
homes purchased by medium, large, and mega investors increased by 46 14
percent. These types of investors currently own just over seven 15
percent of the housing supply in Washington, locking out families 16
from real estate ownership opportunities and the ability to develop 17
intergenerational wealth. Therefore, the legislature intends to 18
prohibit large investment and business entities from purchasing more 19
of the state's existing stock of homes so that the affordable housing 20
supply is available for purchase by residents and families.21
H-0437.1
HOUSE BILL 1732
State of Washington 69th Legislature 2025 Regular Session
By Representatives Thomas, Fosse, Simmons, Street, Berry, Kloba, Ryu,
Parshley, Obras, Reed, Zahn, Ormsby, Cortes, Hill, Scott, Pollet,
Macri, and Ramel
Read first time 01/30/25. Referred to Committee on Housing.
p. 1 HB 1732
NEW SECTION. Sec. 2. (1)(a) A business entity that has an 1
interest in more than 25 single-family residential properties may not 2
purchase, acquire, or otherwise obtain an interest in another single-3
family residential property.4
(b) An investment entity may not purchase, acquire, or otherwise 5
obtain an interest in a single-family residential property.6
(2) For the purposes of this section: 7
(a) "Business entity" means any association, company, firm, 8
partnership, corporation, limited liability company, limited 9
liability partnership, or other legal entity, and that entity's 10
successors, assignees, or affiliates. "Business entity" does not 11
include an investment entity. 12
(b) "Investment entity" means: 13
(i) A real estate investment trust as defined by any state or 14
federal statute; or 15
(ii) An entity that manages funds pooled from investors and owes 16
a fiduciary to those investors. 17
(c) "Single-family residential property" means a residential 18
structure that is: 19
(i) A fully detached or semidetached building, which may include 20
one or more accessory dwelling units located within or attached to 21
the building; or 22
(ii) A row home or townhome that is separated from any adjacent 23
unit by a ground-to-roof wall, does not share heating or air 24
conditioning systems or utilities, and does not have units located 25
above or below. 26
(3) A business or investment entity is not subject to the 27
prohibitions in subsection (1) of this section if the entity is:28
(a) A nonprofit corporation or other nonprofit legal entity;29
(b) Purchasing an existing single-family residential property and 30
making modifications to the property that are necessary to achieve 31
substantial compliance with existing building codes;32
(c) Purchasing an existing single-family residential property to 33
increase the number of residential units on the property, which may 34
include single-family or multifamily units, only if the entity does 35
not hold a single-family residential structure longer than five years 36
without applying for building permits for the property; or37
(d) Acquiring an ownership interest in single-family residential 38
property through the construction of new properties.39
p. 2 HB 1732
(4) The legislature finds that the practices covered by this 1
section are matters vitally affecting the public interest for the 2
purpose of applying the consumer protection act, chapter 19.86 RCW. A 3
violation of this section is not reasonable in relation to the 4
development and preservation of business and is an unfair or 5
deceptive act in trade or commerce and an unfair method of 6
competition for the purpose of applying the consumer protection act, 7
chapter 19.86 RCW. 8
(5) A seller of a single-family residential property is not 9
liable for any violation of this section. 10
(6) By June 30, 2026, the department of commerce shall submit a 11
report to the appropriate committees of the legislature with 12
recommendations to disincentivize business and investment entities 13
from maintaining ownership of single-family residential properties.14
Sec. 3. RCW 19.86.140 and 2024 c 256 s 2 are each amended to 15
read as follows: 16
Every person who shall violate the terms of any injunction issued 17
as in this chapter provided, shall forfeit and pay a civil penalty of 18
not more than $125,000. 19
Every person who violates RCW 19.86.030 or 19.86.040 shall pay a 20
civil penalty of up to three times the unlawful gains or loss avoided 21
as a result of each violation. 22
Every person who violates RCW 19.86.020 shall forfeit and pay a 23
civil penalty of not more than $7,500 for each violation: PROVIDED, 24
That nothing in this paragraph shall apply to any radio or television 25
broadcasting station which broadcasts, or to any publisher, printer 26
or distributor of any newspaper, magazine, billboard or other 27
advertising medium who publishes, prints or distributes, advertising 28
in good faith without knowledge of its false, deceptive or misleading 29
character. 30
Every person who violates section 2 of this act shall pay a civil 31
penalty of not more than $100,000 for each violation and sell the 32
property in violation to an independent third party within one year 33
of the date that the court enters the judgment.34
For unlawful acts or practices that target or impact specific 35
individuals or communities based on demographic characteristics 36
including, but not limited to, age, race, national origin, 37
citizenship or immigration status, sex, sexual orientation, presence 38
of any sensory, mental, or physical disability, religion, veteran 39
p. 3 HB 1732
status, or status as a member of the armed forces, as that term is 1
defined in 10 U.S.C. Sec. 101, an enhanced penalty of $5,000 shall 2
apply. 3
For the purpose of this section the superior court issuing any 4
injunction shall retain jurisdiction, and the cause shall be 5
continued, and in such cases the attorney general acting in the name 6
of the state may petition for the recovery of civil penalties.7
With respect to violations of RCW 19.86.030 and 19.86.040, the 8
attorney general, acting in the name of the state, may seek recovery 9
of such penalties in a civil action. 10
By December 1, 2022, and every five years thereafter, the office 11
of the attorney general shall evaluate the efficacy of the maximum 12
civil penalty amounts established in this section in deterring 13
violations of the consumer protection act and the difference, if any, 14
between the current penalty amounts and the penalty amounts adjusted 15
for inflation, and provide the legislature with a report of its 16
findings and any recommendations in compliance with RCW 43.01.036.17
NEW SECTION. Sec. 4. Section 2 of this act constitutes a new 18
chapter in Title 19 RCW.19
--- END ---
p. 4 HB 1732