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Evergreen Ledger

E2SSB 6027

Signed

Senate

Affordable housing funding

Modifying certain funding and exemptions related to providing and maintaining affordable housing and related services.

How does a bill become law?
  1. Introduced: The bill is filed and assigned a number.
  2. Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
  3. Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
  4. Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
  5. Governor: The Governor reviews the bill and decides whether to sign or veto it.
  6. Signed: The bill has been signed into law.
Introduced: February 8, 2026
Last Action: March 27, 2026
Status: C 230 L 26
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AI Analysis

This analysis was generated by AI and may contain errors. It is not legal advice. Always refer to the official bill text for authoritative information.
People & CommunitiesPeople-leaningCorporate & Wealthy Interests

This bill expands local governments’ authority to impose sales and use taxes for affordable housing and behavioral health services, modifies the real estate excise tax to include new exemptions for low-income housing and community uses, and increases the document recording surcharge to fund housing programs. It prioritizes support for vulnerable populations and establishes new accountability and reporting requirements.

  • Allows counties to impose up to a 0.1% sales and use tax for affordable housing, behavioral health facilities, and related services—either with or without voter approval.
  • Permits cities in counties that do not fully use their tax authority to impose the remaining tax rate (up to 0.1%) without a vote, if the county has not acted by deadlines.
  • Requires at least 60% of tax revenue to be used for constructing, acquiring, or maintaining affordable housing and behavioral health facilities serving people with incomes at or below 60% of county median income in specified vulnerable groups.
  • Expands the real estate excise tax exemptions to include transfers of property for low-income housing, residential property for people with developmental disabilities, and community spaces in affordable developments.
  • Increases the document recording surcharge to $183 per instrument, with funds distributed to state accounts supporting housing programs (e.g., Home Security Fund, Affordable Housing for All Account) and local homeless housing plans.

Who is affected

  • Local governments (counties and cities) — Counties and cities gain new authority to impose local sales and use taxes (up to 0.1% or 0.0146% depending on circumstances) specifically for affordable housing, behavioral health facilities, and related services, with flexibility to act with or without voter approval.
  • Low-income residents and vulnerable populations — People with incomes at or below 60% (or 80% for owner-occupancy) of county median income—especially those in vulnerable groups like veterans, seniors, people experiencing homelessness, people with disabilities, domestic violence survivors, and those with behavioral health needs—gain access to new funding for affordable housing and supportive services.
  • Nonprofit and public housing/service providers — Nonprofit housing providers, public housing authorities, and community-based organizations may receive grants, bonds, or contracts to build, operate, or maintain affordable housing and supportive services using newly authorized tax revenues.
  • Homebuyers, sellers, and developers of affordable housing — Homebuyers and property sellers benefit from new exemptions in the real estate excise tax for transfers involving low-income housing, residential property for people with developmental disabilities, and community spaces in affordable developments.
  • State and county administrative agencies — The state Department of Commerce and county auditors gain new responsibilities and funding streams to manage housing programs, collect and distribute surcharges on document recording fees, and report on program outcomes.
Effective: July 1, 2025Fiscal impact: The bill creates new local tax authority (up to 0.1% or 0.0146% sales/use tax) and modifies the $183 document recording surcharge to fund affordable housing, behavioral health facilities, and related services. It establishes dedicated state accounts (Home Security Fund, Affordable Housing for All Account, and Landlord Mitigation Program Account) to receive and distribute surcharge revenue. Fiscal impact is expected to be positive for housing programs but depends on local tax adoption and collection levels.Sunset: January 1, 2030
Model: Intel/Qwen3-Coder-Next-int4-AutoRoundGenerated: Mar 20, 2026 at 2:36 AM

Pro/Con Analysis

Stronger case for benefits

Potential Benefits (5)

  • The bill creates new dedicated funding streams for affordable housing and behavioral health services, with at least 60% of revenue required to serve households at or below 60% of county median income in vulnerable populations (e.g., veterans, seniors, people experiencing homelessness); this directly expands access to critical services for low-income residents.

    HousingPeopleRef: RCW 82.14.530(2)(a), (b); RCW 82.14.540(2)(a)-(c)

  • The increased document recording surcharge ($183) is dedicated to housing programs—including emergency shelter, eviction prevention, permanent supportive housing, and rental assistance—with strong targeting of funds to extremely low-income households (≤30% AMI) and priority for chronically homeless individuals; this significantly expands housing stability for vulnerable populations.

    HousingPeopleRef: RCW 36.22.250(3)(b), (c); RCW 36.22.250(4), (5), (6)

  • The new real estate excise tax exemptions for low-income housing developments, residential property for people with developmental disabilities, and community space in affordable developments reduce barriers to developing and transferring such properties, encouraging more supply of affordable and supportive housing units.

    HousingPeopleRef: RCW 82.45.010(3)(s), (t), (v), (w)

  • The bill authorizes local sales taxes specifically for behavioral health facilities and services, with revenue dedicated to construction, acquisition, and operation of such facilities; this expands access to mental health and substance use treatment for vulnerable populations who often face barriers to care.

    HealthcarePeopleRef: RCW 82.14.530(2)(a), (b); RCW 82.14.540(2)(a)-(c)

  • The bill mandates that at least 60% of tax revenue serve households at or below 60% of county median income in specified vulnerable groups, and caps administrative costs at 10%, ensuring that most funds go directly to services—not overhead—maximizing impact for low-income residents.

    HousingPeopleRef: RCW 82.14.530(2)(b); RCW 82.14.540(7)
Potential Concerns (5)

  • The 0.1% sales and use tax (or up to 0.0146% in some jurisdictions) is a new local tax that increases the overall tax burden on consumers in jurisdictions that adopt it; while revenue is dedicated to housing and behavioral health, the tax itself is regressive and disproportionately affects low- and middle-income households who spend a larger share of income on taxable goods.

    FinancialRef: RCW 82.14.530(2)(a), (b)

  • The real estate excise tax exemptions for low-income housing developments and residential property for people with developmental disabilities reduce state and local revenue; while intended to support vulnerable populations, these exemptions primarily benefit property owners and developers of qualifying projects, not tenants or low-income households directly.

    FinancialRef: RCW 82.45.010(3)(s) and (t)

  • The new exemptions for transfers to qualifying grantees (e.g., nonprofits, housing authorities) for low-income housing and community purposes reduce real estate excise tax revenue; while these exemptions support affordable housing, they reduce public revenue that could fund broader services, and the benefit accrues primarily to institutional grantees—not individual low-income residents.

    FinancialRef: RCW 82.45.010(3)(v) and (w)

  • The document recording surcharge increases from current levels (implied by $183 figure) to $183 per instrument, effectively a flat fee increase on property transactions; this raises closing costs for homebuyers and sellers, including middle-income households, regardless of need.

    FinancialRef: RCW 36.22.250(1), (2)(a)-(e)

  • The bill allows counties and cities to impose sales taxes without voter approval, reducing democratic accountability for new taxes; while this increases administrative flexibility, it weakens local consent norms and may lead to tax imposition in jurisdictions where residents oppose the measure.

    Local GovernmentRef: RCW 82.14.530(2)(a), (b); RCW 82.14.540(2)(a)-(c)

Who Is Most Affected

Low-income residents and vulnerable populationsPositive Impact

Low-income residents (≤60% AMI), especially those in vulnerable groups (veterans, seniors, unhoused, people with disabilities, survivors of domestic violence), are the primary intended beneficiaries of the new housing and behavioral health funding. They gain access to new affordable units, supportive services, eviction prevention, and mental health care—services that directly improve housing stability and well-being.

Nonprofit and public housing/service providersPositive Impact

Nonprofit housing providers, community development corporations, and behavioral health service organizations stand to receive significant new funding through grants, contracts, and bonds authorized under the bill. This expands their capacity to serve low-income populations but does not guarantee increased direct benefits to clients beyond what the funding enables.

Local governments (counties and cities)Mixed Impact

Local governments (counties and cities) gain new authority to raise dedicated revenue for housing and behavioral health without voter approval, increasing flexibility and speed of response to local needs. However, they also face new administrative responsibilities and accountability reporting requirements.

Homebuyers, sellers, and developers of affordable housingMixed Impact

Homebuyers and sellers benefit from reduced real estate excise tax liability on transfers involving low-income housing or community space, lowering transaction costs for qualifying properties. However, the $183 document recording surcharge increases closing costs for all property transfers, partially offsetting this benefit.

State and county administrative agenciesMixed Impact

State agencies (especially Department of Commerce) gain new funding streams and responsibilities for managing housing programs, including grant administration and reporting. This expands their operational capacity but also increases accountability and oversight burdens.