REALTOR® Support for Increasing Housing Supply and Affordability

Background

During the last 5 years, the Legislature has tried several different approaches to address our state’s housing crisis:

Incentives

Beginning in 2019, with support from REALTORS®, the Legislature provided financial incentives to cities if they made specific modifications to development regulations to quickly accommodate more housing (HB 1923). The results were mixed, but largely unsuccessful, especially regarding low-income housing, even after legislators extended the incentives in 2020 (HB 2343).

Low-Income Housing

In 2021, legislators mandated cities accommodate “STEP Housing” (emergency Shelters, Transitional housing, Emergency housing, and Permanent supportive housing) (HB 1220). But those STEP Housing mandates failed to address the need for market-rate housing, especially affordable homeownership opportunities, and market-rate rentals for workers. To nobody’s surprise, the state’s affordability crisis worsened, and Washington earned the dubious distinction of “Worst in the Nation” for new housing opportunities.

Increased Housing Supply

In response, in 2023, with strong support from REALTORS® (including a massive aggressive advertising campaign), the Legislature added requirements for cities in the Puget Sound to significantly increase the amount of new housing cities must allow.

The legislation requires cities to up-zone the amount of housing allowed in their comprehensive plans, and to accommodate Middle Housing (HB 1110), and more ADUs (HB 1337). The deadline for cities to do so was December 31, 2024. Many cities in King, Pierce, Snohomish, and Kitsap counties met that deadline, but some are still finishing up their work.

Development & Permitting Regulations

The Legislature also passed several new requirements for Puget Sound cities to amend their development and permitting codes by June 30, 2025. Cities are required to improve the efficiency of city development and permitting regulations, and to shorten the time it takes to bring new housing to market. These state requirements place limits on the authority of cities in connection with:

• New state permitting timelines and development application review exemptions for cities, as well as requiring cities to file annual “permitting performance” reports with the state.
• Conversion of existing commercial or mixed-use buildings for multifamily housing units.
• Exemption of small condominium projects from certain high-rise Building Enclosure inspection and documentation requirements
• SEPA categorical exemptions for urban residential housing units if “programmatic environmental reviews” have been completed.
• Quality of city design review standards. Standards must be clear and objective.

Seattle King County REALTORS® have been very active during the first quarter of 2025 in monitoring the work of cities to reform development and permitting processes, and advocating successfully in support of reforms to reduce the amount of time, and cost, required to bring new inventory to the market.

Renton

Renton began with a work plan that includes:

• Accommodation for additional density by re-zoning (up-zoning) properties to Residential Multi Family and Commercial Neighborhood zoning designations.
• Finalized Comprehensive Plan Amendments. The City plans to finalize the Transportation Element of the Comprehensive Plan, and to correct errors in the plan update approved late last year by the City Council.
• Planned Urban Development Regulations for Private Open Space. The City will examine opportunities to provide additional private open space for upper-story residential units.
• Corner Stores and Neighborhood Retail. The City will seek to allow corner stores, and other small-scale commercial uses, to support reinvestment, entrepreneurs, opportunities for socializing, food security/healthy food options, compact development, and reduced dependency on cars.
• Interpretations of Code and Administrative Policy. Cities have the legal authority to interpret their own codes. So long as the interpretation is consistent with controlling law, those interpretations are authoritative and binding in connection with land use codes administered by the city. Renton publicly posts drafts of interpretations online, and public comments may be provided. Renton staff try to codify the interpretations on an annual basis.
• Authorization of multi-family housing units. HB 1998 requires the City to amend its code to allow Single Room Occupancy (SRO) housing, boarding houses, etc. in areas that allow multi-family housing with six or more units per lot. Additionally, the City must ensure that its code does not include minimum requirements that exceed the state building code. Work on the co-living code changes must be completed by December 31, 2025.

Federal Way

Federal Way is reviewing its zoning and development standards to assess and amend any “design standards” that are not clear and objective. The obligation for the city to do so within six months after the adoption of the update of the City’s Comprehensive Plan is the result of HB 1293 that is now codified in RCW 36.70B.160, which provides:

• Cities may only apply clear and objective design review standards that are limited in scope to the exterior design of new development.
• Design review must be conducted concurrently with the project permit review process, and Clear and objective standards for design do not apply to designated landmarks or historic districts.

Next Steps

As we approach June 30, and likely for the remainder of 2025, Seattle King County REALTORS® expect to continue to engage with cities and to support well-advised efforts to reform local housing, development, and permitting regulations, as we seek to:

• Increase the total supply of market-rate housing that is affordable to working households, and
• Encourage the availability of more homeownership opportunities that are affordable to households with median incomes.

This work is complicated for cities. Planning staff must digest the Legislature’s requirements, then draft code amendments for review by the Department of Commerce and the city planning commission. Planning commissions will hold public hearings before making recommendations to the city council. Typically, a city council committee will review each proposed change before it is considered by the whole council. Then, the entire city council will make a final decision on the proposals. Once approved by the city council, planning staff will have to apply the code changes to new development applications and permits.