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2023.05.19- Self Storage 2023 Legislative Priorities HotSheet - Final.pdf

2023 End of Session Legislative Update

May  2023

Sunday, April 23, marked the final day of the 2023 Washington State Legislature. This was a “long session” of 105 days which started on Monday, January 9 and included the passage of the three major biennial budgets of Washington State, the Operating, Capital and Transportation budgets.  The Governor had 20 days after the session to sign bills into law.

Next year will be a “short session” of 60 days and will see supplemental budgets which are typically small corrections or additions to the previous year’s budgets.

Residential Housing Wrap Up

The “Year of Housing” was heavily focused on increasing supply across Washington state at all levels of the housing ladder from low-income funding to high end condominiums.  The state invested a historically large amount of funding towards housing development of affordable units and homeownership.

Major pieces of legislation passed this session that was aimed at addressing the housing supply shortage,which is estimated to be 1 million homes behind the population growth by 2040.  These policy bills include the passage of Middle Housing (E2SHB 1110) championed by Representatives Bateman (D – Olympia) and Barkis (R – Yelm), SEPA Bill (2SSB 5412), and several ADU bills (E2SSB 5045 and EHB 1337).

Several real estate tax proposals gained steam at the end of the session.  The first bill was HB 1628, which as introduced would have increased the real estate excise tax (REET) to 4% on any transaction above $5 million and a local REET increase of 0.25%.   As the bill came out of committee it would have increased the REET from 3% to 3.5% on anything over $3.025 million and kept the local REET option which was councilmanic.   A large coalition worked hard in opposition to this bill and ultimately killed it on the House Floor.  The second bill (SB 5770) was introduced by Senator Pedersen on April 12^th which would have reformed the state and local property taxes to allow for the potential of increasing the property tax cap from 1% per year to 3% per year,” however never received a hearing in Senate Ways & Means. 

In the Residential Landlord-Tenant Act (RLTA) world a couple bills passed that impacts the industry, these bills include:

• ESSB 5197, which encourages remote testimony, requiring a 5-days waiting period prior to execution of an unlawful detainer and allows tenants with a pledge from a government or nonprofit entity for the full amount to satisfy the full judgement has until the date of the eviction. Finally, the bill clearly ends the statewide eviction resolution pilot program (ERPP).    
• SHB 1074, which requires a landlord to substantiate the cost of any damages withheld from a tenant deposit with estimates received, invoices paid, or other specified documentation. Extends the timeline for a landlord to provide a statement and documentation for retaining any portion of a tenant deposit from 21 days to 30 days.
• 2SHB 1474, which would increase the document recording fee by another $100 and require that revenue to be dedicated to Covenant Homeownership Program

The largest fight for Housing Provider space this session was over rent control, with 6 bills being introduced. The 6 bills include: HB 1625/SB 5615, HB 1388, HB 1389/SB 5435, and SB 5697.

A coalition of stakeholders worked tirelessly to stop these bills from passing. Due in that part to this massive effort, all 6 bills died before the House of Origin Cut-Off, which is seen as the halfway point in session. Another bill, HB 1124 which, as introduced, would have required 6-months’ notice of any rent increase over 5%, also died on the House Floor prior to the halfway point. 

Final Legislative Budgets

Governor Inslee released his proposed budgets in December 2022 which included a $4 billion bond measurethat he envisioned as a catalyst for the creation of affordable housing units over the next 6 years.  He also made major cuts or delays to transportation projects across the state that were passed in previous transportation budgets.  Even though the Democrats control the House, Senate, and Governors’ office they were not on the same page when budgets were passed in the final days of the 2023 Legislative session.

Republicans highly criticized Democrats last year after they passed budgets that had little input from across the aisle. This year was quite the reverse, and the 2023-2025 biennial budgets reflect a bipartisan approach. This can be evidenced with the unanimous final passage of a Capital Budget in both the Senate and House and unanimous final passage in the House for the Transportation Budget but with three dissenting Republicans in the Senate.

Overview of State Budgets Impacts to Housing 

SB 5200 – Capital Budget

Capital Budget (ESSB 5200):

The state capital budget is responsible for capital developments throughout the state, therefore this fund is intended to help build universities and housing developments.  The final capital budget (ESSB 5200) authorizes $9 billion in total budgeted funds, of which $4.7 billion is debt limit bonds for the 2023-2025 biennium.  The capital budget allocates $693.7 million for affordable housing projects that construct new unit, preserve, and rehabilitate existing units, connect affordable housing developments to infrastructure, and provide weatherization and energy efficiency updates to low-income households.  This allocation is the largest amount of funding directed towards housing.

The Housing Trust fund received $400 million in total with $40 million focused solely on homeownership projects to first-time low-income buyer households and $163 million towards new construction, acquisition, or rehabilitation of affordable housing projects that serve low-income and special needs populations.  Additionally, there is $60 million to connect affordable housing developments to infrastructure, $50 millionto projects designed to increase the supply and affordability of transit-oriented development, and $40 million for the Housing Finance Commission Land Acquisition Program.

The landlord mitigation fund received $13 million total with $5 million from the capital budget and $8 million from the operation budget.

SB 5187 – Operating Budget

Operating Budget (ESSB 5187):

The state’s operating budget is what funds the day-to-day operations of the state.  Historic investments were made in the operating budget on housing as well.  The Covenant Homeownership Account (2SHB 1474) received $150,000,000. The Affordable Housing for ALL account was allocated $109,227,000.  Most importantly, the Housing Trust Fund was given $9,862,000.  Finally, $607,000 in each year to Commerce to help homeowners at risk of foreclosure. 

Within this budget several allocations will have an impact on the rental housing market specifically.  These impacts are as follows:

 The Dispute Resolution Centers (DRC), Resolution Washington, received $10,500,000 in 2024 and $10,500,000 in 2025. An additional, $500,000 was allocated each year for the Snohomish County DRCto provide mediation services specifically for landlords and tenants, with the goal of avoiding evictions.

 

1. The Office of Civil Legal Aid (OCLA) was allocated $2,408,000 in 2024 and $2,579,000 in 2025 to provide civil legal information, advice, and representation for tenants at risk of eviction but not yet eligible for appointed counsel. 

 

1. OCLA also received $15,425,000 in 2024 and $16,030,000 in 2025 expressly provided to the appointed counsel program for tenants in unlawful detainer cases and includes a vendor rate increase for contracted attorneys.

 

1. $215,000 in 2024 and $345,000 in 2025 for commerce to produce a report to the legislature to review how to implement a statewide rental registry; 2 separate reports are required:

1. a review of how to implement a statewide registry and
2. how to implement a statewide pilot program in the 6 largest counties.

 

HB 1125 – Transportation Budget

HB 1125, the 2023-2025 Transportation Budget, passed on April 22^nd.  This $13.4 billion transportation budget had major investments in the ferry system, transportation workforce, traffic safety and keeping projects on track that are already in the works. This was a much smaller budget than last year’s Transportation package of $17 billion and as mentioned earlier, was a bipartisan effort.

Also, this year marks the first time legislators had money from the auction of carbon credits to spend.  The 23-25 transportation budget makes use of nearly $1 billion from those auctions toward projects intended to reduce greenhouse gas emissions from the state’s transportation sector: bicycle and pedestrian projects, electric vehicle charging stations, e-bike vouchers, ferry electrification and others. $5.4 billion is spent on major infrastructure projects including the Puget Sound Gateway program between Puyallup and the Port of Tacoma, replacing the I-5 bridge over the Columbia River into Oregon, the North Spokane Corridor.  On the heels of a recent ferry accident, the Washington State Ferries received a $1.3 billion investment for the construction of five new hybrid-electric ferries, the maintenance of the existing fleet and to address workforce shortages. Lastly, over $2.5 billion is spent on traffic safety in work zones, pedestrian and bicycle area improvements, as well as addressing workforce shortages in the State Patrol.

HB 1240 – Assault Weapon Ban – Strom Peterson

Prohibits the manufacture, importation, distribution, sale, or offer for sale of any assault weapon, subject to various exceptions for licensed firearm manufacturers and dealers, for individuals who inherit an assault weapon, for firearms dealers to sell or transfer their existing stock of assault weapons that were acquired prior to January 1, 2023, to outside of the state for the limited period of 90 days after the effective date.

This also provides that a violation of these restrictions constitutes a gross misdemeanor and is actionable under the Consumer Protection Act.  Violation is classified as a matter vitally affecting the public interest, not reasonable in relation to the development and preservation of business, and an unfair or deceptive act in trade or commerce and an unfair method of competition for the purpose of applying the CPA.

HB 1240 passed on party lines and was signed into law on Tuesday, April 25. It went into effect immediately.

ESB 5352 – Police Vehicular Pursuits – Senator John Lovick

When engaging in a vehicular pursuit, an officer may violate certain rules of the road including, for example, stop signals, speed limits, and parking restrictions. This bill lowers the evidentiary threshold required for engaging in a vehicular pursuit by allowing an officer to conduct the vehicular pursuit if the officer hasreasonable suspicion that a person in the vehicle has committed or is committing specified criminal offenses(a violent offense, a sex offense, a vehicular assault offense, an escape offense, a driving under the influence offense, or a domestic violence assault in the first, second, third, or fourth degree offense).

It also modifies certain vehicular pursuit requirements related to supervisory oversight and establishes new requirements related to direct communication with specified entities, development of a plan to end the vehicular pursuit, and the pursuing officer's training and certifications.

This bill passed 57-40 in the House and 26-22 in the Senate (who concurred with House amendments).  The bill took effect on May 3, 2023.

ESHB 1736 - Vehicle odometer readings – Julio Cortes

The passage of ESHB 1736 requires the Department of Licensing (DOL) to request odometer information in the application for vehicle registration and vehicle registration renewal.  It exempts from public disclosure the personally identifying information of persons who voluntarily report the vehicle odometer mileage as part of the vehicle registration renewal.  It also requires DOL to provide a report by May 1, 2025, on specified issues related to odometer reporting.

1736 passed in the House 52-44 and 28-20 in the Senate. It has been delivered to the Governor and on May 15, and the Governor vetoed the entire bill stating that, ““presupposes a future per-mile program as an alternative transportation funding mechanism” and the Legislature should consider “alternative funding sources for transportation” in addition to the road-use charge. Only after more options are examined should the Legislature move to collecting odometer readings.”

E2SHB 1238 - Free school meals for all – Marcus Riccelli

Requires certain public schools serving grades K-4 to provide breakfast and lunch each school day at no charge to any student who requests these meals.  It phases in this requirement beginning in schools with 40 percent or more of their students eligible for free or reduced-price meals in the 2023-24 school year, and then including schools with 30 percent or more of their students eligible in the 2024-25 school year.

This bill also directs school districts to maximize federal funding, and the Office of the Superintendent of Public Instruction to reimburse school districts on a per-meal reimbursement basis for meals that are not already reimbursed at the free rate as well as provides funding stability provisions for the Learning Assistance Program and the National Board Certified Teacher Bonus in the 2024-25 and 2025-26 school years.  Lastly it removes the requirement that public schools with an identified student percentage of less than 40 percent participate in the Community Eligibility Provision if authorized by federal law.

E2SHB 1238 passed out of the Senate with a 44-5 vote and a 92-4 vote in the House.  The bill takes effect on July 23, 2023. 

Final Legislative Report  

Attached is an updated report of high priority bills we were tracking in the 2023 Session.  For those bills that did not pass in the 2023 session these bills will still be alive for the 2024 session. 

 

2023 Legislative Session Update

Report shared by our Lobbyists:

Today marks the 75^th day of the 2023 Legislative session in Olympia.  Our next cutoff comes on Wednesday, March 29 which is the last day to read in committee reports (pass bills out of committee and read them into the record on the floor) from opposite house, except House fiscal committees and Senate Ways & Means and Transportation committees.

Earlier this week the revenue forecast for Washington’s projected Near General Fund revenue collections for the 2023–25 state budgets have decreased by about $483 million. The projection represents about a 0.7% drop from the number forecast last November. Total Near General Fund revenues are nowprojected at $65.7 billion for the next two-year state budget cycle, which begins July 1, 2023.  Steve Lerch, executive director of the Economic and Revenue Forecast Council explained,

“Although overall revenue collections have been above expectations, lower personal income and residential construction forecasts result in lower revenue in the 2023-25 and 2025-27 biennia.”

Lately the Legislature has been seeing revenue forecasts showing additional funding so this negative forecast will slow some spending as budgets continue to roll out next week.  Earlier this week we saw Senate proposals for a Capital Budget and Operating Budget.  A general overview is listed below.

We have 30 days left until the session concludes on Sunday, April 23.

Attached is an updated report of top priority bills that we are tracking.

Read the full report here

2022 recap

WA-SSA Legislative Major Accomplishments through 2022.pdf

2022.05.22 - WA-SSA Legislative Update PowerPoint.pdf