Legislative Update: Making a Bad Bill Better

The 2025 legislative session is heating up as the end of the 105-day session approaches. Bills still alive within the Washington Legislature have had to make it through six cutoffs—with two more to go. These final 16 days are largely focused on budget and finances, with the legislature projecting a $10 billion to $16 billion shortfall over the next four years. Democrats are scrambling to bring in additional or new revenue.

Budget Proposals

In late March, both the House and Senate published their budget proposals:

• House Proposal: $77 billion, highlighting a wealth tax, B&O tax surcharge for high wage-earning industries, increasing surcharges on financial institutions, and a property tax lid lift from 1% to 3%.
• Senate Proposal: $78 billion, including a wealth tax, property tax increase, and a payroll expense tax.

Following each chamber's budget proposal, Governor Ferguson stated he would not sign either proposal, citing future legal challenges to the wealth tax as an additional expense to Washington’s taxpayers. He suggested spending down the state’s considerable rainy-day fund instead. Both chambers are now headed back to the drawing board to craft budgets the governor will sign, leading to new ideas on how to increase revenue, such as a sales tax on services (including REALTORS®) and broadening the B&O tax surcharge to include most businesses.

Rent Stabilization Bill HB 1217

The most talked about bill this session, behind the budget, is rent stabilization. Washington REALTORS® has opposed this bill for many sessions and continues to do so throughout the 2025 legislative session. The goal heading into 2025 was to make a bad bill better and ensure that Washington State remains a competitive market for development.

Key Amendments

As initially proposed, the rent stabilization bills were the most restrictive on the West Coast, surpassing Oregon and California. On April 10, the Senate passed rent stabilization bill HB 1217. Originally, this bill would have capped rent increases at 7% and did not include an exemption for non-corporate owned single-family residences. Washington REALTORS® worked with Senate Republicans and Democrats to pass amendments that:

• Capped rent increases at 10% plus inflation annually.
• Included an exemption for non-corporate owned single-family residences.
• Provided a 15-year exemption for new construction.

The House bill, as passed by the Senate, now heads back to the House for concurrence.

Acknowledgments

Special thanks are due to Senators Braun (Thurston, Cowlitz, Clark counties), Liias (Edmonds), Shewmake (Bellingham), Cleveland (Vancouver), Cortes (Battle Ground), and Saloman (Shoreline) for their yes votes on the amended bill.

Conclusion

As the session works its way to a close on April 27, Washington REALTORS® will continue to monitor, advocate, and engage on bills affecting real estate, our members, and your clients.