2023 Planning Legislation Impacting Local Governments

This blog includes a summary of six bills impacting local planning and housing development that passed in the last legislative session. Common themes among these and other bills are streamlining local project review, decreasing the planning burden on smaller communities, incentivizing annexations, and increasing housing supply in Washington State.

HB 1293: Streamlines Design Review

HB 1293 establishes standards for local design review for Growth Management Act (GMA)-planning counties and cities. Chapter 36.70A RCW is amended to include a definition of “design review” and provides that:

• Only clear and objective development regulations governing the exterior design of a new development are allowed in design review.
• The standards must have at least one ascertainable guideline, standard, or criterion by which an applicant can determine whether a given design is permissible.
• The design guidelines may not reduce density, height, bulk, or scale beyond the underlying zone.
• Design review must be conducted concurrently with consolidated project review and may not include more than one public meeting.

Expedited review is encouraged for developments that comply with adopted development regulations or are affordable to low- and moderate-income households.

Affected counties and cities must comply with the requirements beginning six months after their next periodic update under the GMA.

SB 5457: Small Towns Periodic Review Updates

SB 5457 allows a city or town located within a GMA-planning county to opt out of a full review and revisions of its comprehensive plan if the city or town meets the following criteria:

• Has a population fewer than 500,
• Is not located within 10 miles of a city with a population over 100,000,
• Experienced a population growth rate of less than 10% in the preceding 10 years, and
• Has provided the Washington State Department of Commerce with notice of its intent to participate in a partial review and revision of its comprehensive plan.

If a city or town chooses to opt out of a full review and revision of its comprehensive plan, it must still fully update its critical areas regulations, its capital facilities element, and its transportation element.

HB 1425: Annexation Sales Tax Credit

HB 1425 revives and updates the annexation tax credit program to encourage annexation of remaining portions of unincorporated urban growth areas.

The tax credit is triggered by an annexation interlocal agreement between a city and county pursuant to RCW 35A.14.472, RCW 35A.14.296, or RCW 35.13.470. Cities can receive:

• 0.1% sales tax credit for annexations of more than 2,000 in population but less than 10,000.
• 0.2% sales tax credit for annexations of more than 10,000 in population.

All revenue collected under the new provisions must be used to provide, maintain, and operate municipal services for the annexation area.

The new law was effective July 23, 2023, and applies to all cities and counties planning under the GMA. There is an end date to impose the tax of July 1, 2028.

HB 1042: Conversion of Existing Buildings for Residential Use

HB 1042 is intended to promote the conversion of existing commercial and mixed-use buildings to multi-family housing.

GMA-planning cities must amend their development regulations to remove barriers and promote the conversion in the ways specified in Section 2 of the new law no later than six months after their next periodic update. If cities do not amend their development regulations, state law will preempt local regulations and the new provisions will apply.

Some of the provisions set forth in Section 2 include:

• Allowing a 50% density increase above what is permitted in the underlying zone if the housing is constructed entirely within the envelope of an existing building, provided that generally applicable health and safety standards can be met;
• Prohibiting the imposition of parking standards on the additional dwelling units (however, cities may require retention of existing parking required to satisfy existing residential parking requirements under local law and for any nonresidential uses that remain after new units are added);
• Prohibiting imposing additional permitting requirements on use of existing buildings beyond those applicable to all residential development in the zone, with the exception of emergency and transitional housing;
• Prohibiting the imposition of additional design standards beyond those generally applicable to all residential development in the zone;
• Prohibiting requiring that unchanged portions of an existing building used for residential purposes meet the current energy code (however, if any portion of an existing building is converted to new dwelling units, the new units must meet the current code); and
• Prohibiting denial of a building permit based on certain existing nonconformities unless a city official with decision-making authority makes findings that the nonconformity is causing a significant detriment to the surrounding area.

Review the bill language for a full list of requirements. These provisions in Section 2 will be added to RCW 35.21 for non-code cities and RCW 35A.21 for code cities. The bill also categorically exempts from Chapter 43.21C RCW State Environmental Policy Act (SEPA) review any development code changes that are necessary to comply with the new law.

HB 1695: Affordable Housing and Surplus Property

HB 1695 amends RCW 39.33.015, which allows public agencies to transfer, lease, or dispose of surplus real property at low or no cost to a public, private, or nongovernmental body if this action is for a “public benefit.” The bill adds “affordable housing and related facilities” within the meaning of “public benefit” and clarifies that it includes both rental housing and permanently affordable housing.

SB 5198: Promoting the Preservation of Mobile Home Communities as Affordable Housing

To address concerns about the loss of existing affordable housing, SB 5198 strengthens rules to give mobile homeowners (or a qualified tenant organization) the opportunity to purchase mobile home communities when the park owners propose closure or conversion. The new law includes the various procedural steps and timelines that the mobile home community owners must take to comply.

Conclusion

For additional information on planning, housing, environment, and climate-related legislation from the 2022-2023 session, please see: 2023 Legislative Updates to Modernize and Streamline Local Project Review, Major Changes to Washington's Housing Laws, and New Legislation Related to Climate and the Natural Environment. Since our blogs on new legislation are summaries, we highly recommend consulting with your agency’s attorney for a full review and agency specific interpretation of any new legislation.