E2SHB 1974
SignedHouse
Land banking authorities
Establishing land banking authorities.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill creates land banking authorities in Washington counties to help increase affordable housing supply, especially in urban areas, by enabling counties to transfer land to dedicated entities at below-market rates. It prioritizes racial equity, prevents displacement, and ensures long-term affordability through strict covenants and oversight.
- Creates land banking authorities—public or nonprofit entities authorized by counties to acquire, hold, improve, and lease or sell land for affordable housing development within urban growth areas.
- Requires land banks to maintain a housing mix of at least 33% affordable to extremely low-, very low-, and low-income households, no more than 33% market rate, and housing for moderate-income households.
- Mandates 99-year affordability covenants on all housing developed with land bank land to ensure long-term affordability.
- Establishes a land bank grant program administered by the Washington State Housing Finance Commission, with grants available for planning, public improvements, and land acquisition—subject to local requirements like tax levies and removal of regulatory barriers.
- Gives land banks priority access to surplus public land and tax-foreclosed properties, and allows them to sell or lease land below market rate—without requiring the highest bidder—to prioritize community needs like affordable housing.
- Requires counties to form land bank advisory boards with diverse expertise and racial/ethnic representation, and to conduct audits of affordability compliance every three years.
Who is affected
- Counties — Counties gain the authority to create land banking entities to support affordable housing development, and must establish advisory boards and ensure compliance with affordability requirements.
- Cities and towns — Cities and towns gain priority access to surplus land and must facilitate affordable housing development on tax-foreclosed properties transferred to them by counties.
- Nonprofit housing developers and community organizations — Nonprofit housing developers, community land trusts, and public housing authorities can partner with or receive land from land banks at below-market rates to build or preserve affordable housing.
- Low- and moderate-income households — Low- and moderate-income households, especially Black and Indigenous people and other historically marginalized groups, gain access to more affordable housing options and protections against displacement.
- State agencies (specifically the Housing Finance Commission) — The Washington State Housing Finance Commission administers a new grant program to support land banking activities across the state.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (5)
Land banks can acquire and transfer land at below-market rates to nonprofit and community-based developers, significantly lowering the cost barrier to building affordable housing—especially for community land trusts and first-time homeowners—directly expanding supply for low- and moderate-income households.
HousingPeopleRef: Sec. 4(5), (6), (7)The state-funded competitive grant program for land acquisition, planning, and public improvements—tied to local tax levies and regulatory reforms—provides critical upfront capital to jumpstart affordable housing development in areas where private investment is absent or insufficient.
HousingPeopleRef: Sec. 6 & Sec. 4(10)Priority access to surplus public land and tax-foreclosed properties allows land banks to tap underutilized public assets—often in high-opportunity neighborhoods—without competing in the open market, reducing land acquisition costs and accelerating project timelines for affordable housing.
HousingPeopleRef: Sec. 4(4), Sec. 8(3), Sec. 9(1)(d)The 99-year affordability covenant and housing mix requirements ensure long-term affordability and prevent displacement, disproportionately benefiting historically marginalized groups—including Black and Indigenous households—who have been excluded from wealth-building through homeownership.
HousingPeopleRef: Sec. 4(9), Sec. 4(10), Sec. 12(1), (5)-(9)Mandating racial/ethnic representation on advisory boards and centering displaced communities in planning helps correct historical inequities in housing policy and strengthens community participation in land-use decisions—though enforcement mechanisms are not explicitly detailed.
Rights & LibertiesPeopleRef: Sec. 3(2), Sec. 5(3), (5), (7)
Potential Concerns (5)
Counties must levy a local tax dedicated to affordable housing to be eligible for state grants, which could increase local property tax burdens on homeowners and renters—especially in counties already facing budget constraints—though the tax is capped and targeted, its implementation may fall disproportionately on middle- and working-class households.
FinancialRef: Sec. 6(3)(a)The 33% minimum affordability threshold for housing built on land bank land may reduce the number of units that can be built overall, since developers may find it financially unviable to build at such low rents—especially in high-cost urban markets—potentially limiting supply gains and slowing overall housing growth.
HousingPeopleRef: Sec. 4(9) & Sec. 12(5)-(9)Allowing land banks to sell or lease land below market rate without requiring the highest bidder may reduce land values and developer profits, especially for large for-profit developers, and could discourage private investment in mixed-income or market-rate projects in areas where land banks operate.
Business & EmploymentRef: Sec. 4(5), (6), (7)The 99-year affordability covenant and enforcement mechanism may restrict property owners’ rights to resell or refinance homes freely, and the audit-and-compliance regime could create administrative burdens for small landlords or nonprofit operators who lack legal resources.
Rights & LibertiesRef: Sec. 4(10) & Sec. 7(2)(c)Up to 1% of grant funds going to advisory board operations may strain small counties with limited staff capacity to support multi-stakeholder boards, especially in rural areas where volunteer recruitment and technical expertise are scarce.
Local GovernmentRef: Sec. 6(2)
Who Is Most Affected
Counties gain new authority and funding tools to address housing shortages, but must also incur administrative costs (e.g., advisory board formation, audits) and may face political pressure to raise local taxes to qualify for grants—especially in fiscally constrained rural counties.
Nonprofit housing developers and community land trusts benefit significantly from access to low-cost land and state grants, enabling them to scale affordable housing production—especially in high-cost urban areas—though they must comply with strict affordability covenants and reporting.
Low- and moderate-income households gain direct access to more affordable units with long-term rent stability and displacement protections, especially in urban areas where housing costs have outpaced wages—though benefits depend on local implementation and availability of units.
Large for-profit developers may see reduced opportunities for high-margin projects on land bank parcels, as land is prioritized for nonprofit or community-led development—though some may partner with land banks on mixed-income projects.
Renters in high-cost urban areas may benefit from increased supply and reduced displacement risk, but those in rural or suburban counties may see little change if counties opt not to form land banks or levy required taxes.