American dream homes

AN ACT Relating to a new proposal to promote housing 1
affordability by incentivizing the construction of American dream 2
homes; adding a new section to chapter 36.70A RCW; adding a new 3
section to chapter 82.08 RCW; adding a new section to chapter 82.04 4
RCW; adding a new section to chapter 84.36 RCW; creating new 5
sections; providing an effective date; and providing expiration 6
dates. 7
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:8
NEW SECTION. Sec. 1. A new section is added to chapter 36.70A 9
RCW to read as follows: 10
(1) Until December 31, 2036, a person may request a permit for an 11
American dream home in order to encourage the development of 12
residential housing for low-income households. 13
(2) A permit for a new American dream home must be approved in a 14
city or county according to the following criteria:15
(a) Each American dream home is eligible to have impact fees 16
imposed under RCW 82.02.050 offset by the state portion of the tax 17
collected pursuant to chapters 82.08 and 82.12 RCW;18
(b) The city or county may not charge cumulative permitting fees 19
for each American dream home that exceed $1,250, which must be offset 20
by the funds described in section 4 of this act; 21
S-1820.1
SENATE BILL 5776
State of Washington 69th Legislature 2025 Regular Session
By Senators Fortunato and J. Wilson
Read first time 02/25/25. Referred to Committee on Housing.
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(c) Provisions, such as covenants or other restrictions, are 1
applied to ensure that each American dream home remains reserved for 2
low-income households for a period of seven years from the date of 3
the first sale of the home to an owner who will occupy the home. The 4
covenant or restriction must provide that the American dream home is 5
occupied by the owner that is qualified under this section. If an 6
American dream home is resold any time within seven years after 7
purchase of the home by the first owner-occupier, the price must be 8
affordable for low-income households; however, this resale price 9
requirement does not apply in the case of foreclosure if all permit 10
fees, impact fees, and taxes, related to the American dream home have 11
been paid in full to the appropriate authority; 12
(d) An American dream home must conform to the applicable 13
building codes in effect in the jurisdiction where the home is built;14
(e) A city or county may not impose stormwater conditions that 15
exceed the stringency of the department of ecology's construction 16
stormwater general permit in effect on the date a complete 17
application is received for the construction of an American dream 18
home. 19
(3)(a) This section does not prohibit a county planning under RCW 20
36.70A.040 from authorizing the extension of public facilities and 21
utilities to serve residential building sites for an American dream 22
home. 23
(b) A city or county may authorize the siting of an American 24
dream home outside of the urban growth area, even where otherwise 25
prohibited by a multicounty planning policy. If the city or county 26
authorized the siting of a school outside of the urban growth area 27
under this chapter, the city or county may determine that an American 28
dream home must be connected to utilities or other similar 29
infrastructure that was installed to serve the school.30
(4) A city or county must annually report to the department until 31
March 1, 2036, regarding the number of American dream home permits 32
issued in its jurisdiction. The department must compile the data and 33
report to the appropriate committees of the legislature regarding the 34
participation by jurisdiction in the program. 35
(5) For the purposes of this section: 36
(a) "Affordable" means residential housing which, as long as the 37
same is occupied by low-income households, requires payment of 38
monthly housing costs, including utilities other than telephone, of 39
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no more than 30 percent of the family's income, for a family earning 1
80 percent of the area median income. 2
(b) "American dream home" means an owner-occupied single-family 3
residential dwelling of 1,500 square feet or less serving low-income 4
households. 5
(c) "Low-income household" means a single person, family, or 6
unrelated persons living together whose adjusted income is less than 7
70 percent of the median family income adjusted for household size, 8
for the city or county where the project is located.9
NEW SECTION. Sec. 2. A new section is added to chapter 82.08 10
RCW to read as follows: 11
(1) A city or county must receive a distribution equal to the 12
state portion of the tax levied by RCW 82.08.020 in respect to:13
(a) Charges for labor and services rendered in respect to the 14
constructing of dwellings designated American dream homes, as 15
provided in section 1 of this act; 16
(b) Sales of tangible personal property that will be incorporated 17
as a component of dwellings designated as American dream homes, 18
during the course of construction; 19
(c) Charges made for labor and services rendered in respect to 20
installing, during the course of constructing such dwellings, 21
fixtures not otherwise eligible for the exemption under RCW 22
82.08.02565; and 23
(d) Impact fees required by the city or county pursuant to a 24
development under section 1 of this act. 25
(2) This section applies only to American dream homes meeting the 26
requirements and conditions described in section 1 of this act.27
(3)(a) The department must at least once annually remit to the 28
city or county an estimated amount, as determined by the department, 29
of state taxes collected during the prior calendar year with respect 30
to subsection (1) of this section. 31
(b) The department must determine eligibility under this section 32
based on information provided by the city or county and through audit 33
and other administrative records. 34
(c) The city or county must, on an annual basis, submit an 35
application, in a form and manner as required by the department by 36
rule, containing any information the department deems necessary in 37
determining remittance amounts under this section.38
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(4) The legislature intends for the distribution authorized under 1
this section to be applied to the permitting costs incurred by the 2
city or county related to the permitting of American dream homes, as 3
defined in section 1 of this act. 4
(5) This section expires July 1, 2036. 5
NEW SECTION. Sec. 3. A new section is added to chapter 82.04 6
RCW to read as follows: 7
(1)(a) The builder of an American dream home is allowed an annual 8
credit against the tax due under this chapter as provided in this 9
section. The credit equals four percent of the gross selling price of 10
the American dream home. 11
(b) Credits under this section may only be earned on the sale of 12
American dream homes meeting the requirements and conditions 13
described in section 1 of this act. 14
(2) The credit may be used against any tax due under this 15
chapter, and may be carried over until used, except as provided in 16
subsection (4) of this section. No refund may be granted for credits 17
under this section. 18
(3) Credits earned under this section may be claimed only on 19
returns filed electronically with the department using the 20
department's online tax filing service or other method of electronic 21
reporting as the department may authorize. The taxpayer must keep 22
records necessary for the department to determine eligibility under 23
this section including records establishing the sale of an American 24
dream home. 25
(4) Credits allowed under this section can be earned for tax 26
reporting periods through June 30, 2036. No credits can be claimed 27
after June 30, 2037. 28
(5) For the purposes of this section, "American dream home" has 29
the same meaning as in section 1 of this act. 30
(6) This section expires July 1, 2038. 31
NEW SECTION. Sec. 4. A new section is added to chapter 84.36 32
RCW to read as follows: 33
(1)(a) The value of an American dream home is exempt from 34
property taxation for a period of seven years beginning January 1st 35
of the year immediately following the calendar year in which 36
construction of the American dream home is completed.37
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(b) The exemption under this section applies only to American 1
dream homes meeting the requirements and conditions described in 2
section 1 of this act. 3
(c) An American dream home receiving an exemption under this 4
section is immediately subject to property taxation if at any point 5
during the exemption period the home no longer meets the requirements 6
and conditions in section 1 of this act. 7
(2) Claims for an exemption under this section must be filed with 8
the county assessor on forms provided by the department and furnished 9
by the county assessor. 10
(3) The department may promulgate such rules, pursuant to chapter 11
34.05 RCW, as necessary to properly administer this section.12
(4) At the conclusion of the exemption period, the value of the 13
new housing must be considered as new construction for the purposes 14
of chapters 84.55 and 36.21 RCW as though the property was not exempt 15
under this section. 16
(5) For the purposes of this section, "American dream home" has 17
the same meaning as in section 1 of this act. 18
NEW SECTION. Sec. 5. The legislature intends to appropriate 19
amounts to the department of commerce sufficient to provide down 20
payment assistance to buyers of American dream homes as defined in 21
section 1 of this act and to reimburse cities and counties for 22
revenue forgone under section 1 of this act.23
NEW SECTION. Sec. 6. RCW 82.32.805 and 82.32.808 do not apply 24
to this act.25
NEW SECTION. Sec. 7. This act applies for taxes levied for 26
collection in 2026 and thereafter.27
NEW SECTION. Sec. 8. This act takes effect July 1, 2026.28
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