Kneecapping housing affordability efforts

Kneecapping housing affordability efforts
As state lawmakers consider legislation to incentivize affordable housing in rural communities, building industry members are warning them not to kneecap those efforts with new regulations that add to construction costs – and ultimately housing prices. Photo: freepik.com

Washingtonians living in the central Puget Sound region aren’t the only ones affected by the housing shortage. The problem has also extended to the rest of the state including Mason County, considered one of the most rural counties in the state.

Sen. Tim Sheldon (D-35) has sponsored SB 5739 to help accelerate affordable housing development by extending certain tax exemptions in the county’s unincorporated area. However, building industry advocates warn that the legislature could kneecap any effort to increase the housing supply if it enacts proposed business regulations while ignoring legislation intended to ease land-use restrictions.

In 2014, the state approved legislation creating residential targeted area where eligible cities and counties can exempt from the local property tax the value of the construction or redevelopment of multi-unit residential housing projects. However, the areas must be located either in a city or the urban growth area of a county’s unincorporated area. The exemptions last for eight years but can be extended to 12 if the owner is renting or selling 20 percent of the units as affordable housing.

Under the 2014 law, applications for exemptions will no longer be accepted after 2020.

SB 5739 would extend that deadline through 2025. Its companion bill is HB 1790 sponsored by Rep. Dan Griffey (R-35), which received a Feb. 14 public hearing of House Finance Committee.

Sheldon told lawmakers at a Mar. 1 public hearing of the Senate Ways & Means Committee that potential housing developments that would have taken advantage of the targeted areas were delayed due to an uncompleted sewer system and major construction work on State Route 3.

Now that the infrastructure projects are completed, “hopefully, we will land some fish. We’re fishing and we have some nibbles on the bait for development that would provide low income housing.”

Remarks offered by Chair Christine Rolfes (D-23) indicated the bill might be revised so the deadline is only extended until 2022.

At the same time, the Building Industry Association of Washington (BIAW) says that the best way to get more housing in Mason County is to make it less costly for the small developers who work there. As the state’s largest trade association, BIAW represents 8,000 member companies and 265,000 home construction-related employees. According to the association, in Washington state every $1,000 added to a home price makes it no longer affordable for 2,393 people.

Government Affairs Director Jan Himebaugh told Lens that “there needs to be a huge, real look at regulatory costs that we’re putting onto builders” that makes it “just as expensive to build in Mason County as it is in King County, because of labor liability issues.”

However, bills intended to fix perceived flaws in the state Growth Management Act or require local government land-use planning to include certain types of housing have failed to make the cutoff date to clear their original committee. Some of the proposals have received pushback from local government advocates who fear the loss of local autonomy. They’re also concerned the bills could undermine comprehensive plans under GMA that have already been approved and could cause uncertainty when updating those plans.

Among the few bills to survive the cutoff are SB 5008 regarding short subdivisions and SB 5334, which aims to encourage more condo development; SB 5008 has advanced to Rules Committee, while SB 5334 cleared the Senate on Feb. 25 after a unanimous vote.

At the same time, state lawmakers might be undermining that bill with HB 1395 sponsored by Rep. Mike Pellicciotti (D-30). The proposal makes construction companies liable for subcontractor wages and benefits if the employer doesn’t pay them – and even if they falsely claim to have done so. The bill has cleared the House Committee on Appropriations and been referred to the Rules Committee for review.

Himebaugh said that if passed, the new regulation would add a “huge administration burden on every general contractor. Putting the responsibility for someone who’s not the employer to pay wages is completely ludicrous. We don’t know how you make housing more affordable by making housing more expensive.”

Another bill opposed by BIAW is Governor’s Jay Inslee’s proposal allowing local governments to increase energy code requirements beyond that mandated by the state energy code. The state code is updated every three years, and according to BIAW tacks $4,000-$6,000 on to the final price of a home. The proposal via SB 5293 has been placed on second reading in the Rules Committee.

No further action is scheduled for SB 5739.

2 COMMENTS

  1. Just abolish the land use laws. They cost the families of this state a huge amount and are a drain on the local economies.

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