Washington lawmakers in recent years have passed laws to require local governments to allow for more housing density with duplexes, triplexes or attached dwelling units.
But before lawmakers required these changes, they looked at ways to incentivize local governments to do this on their own. Two laws, one passed in 2019 and one passed in 2020, provided grants to local governments to create housing action plans intended to increase the number of units that could be built.
For many places in Washington, the incentives worked, according to a new study.
The University of Washington Center for Real Estate Research looked at how local governments that received the grant funding from the state in the last four years have made changes to accommodate denser housing. Those changes include increasing the number of units allowed on a lot, limiting parking requirements or offering perks for developers to build affordable housing.
According to the report, at least 66 of the 103 jurisdictions receiving grants through those two state laws adopted at least one measure to increase density. And with new state laws now requiring some of these actions, more will likely move in this direction.
“We’re going to see more density, more apartments, more multifamily units, more use of tools like the multi-family tax exemption program, more development near transit stations because of these changes,” said Steven Bourassa, director at the Washington Center for Real Estate Research. “But it’s not going to happen overnight.”
House Bill 1923, which passed in 2019, encouraged cities to increase housing density by taking at least two actions listed in the bill. These actions included allowing for more development near transit stations, removing parking requirements, and allowing more duplexes and triplexes.
A year later, lawmakers approved House Bill 2343, which expanded the list of actions to include options like accessory dwelling units and converting single-family homes to multi-family housing.
To help communities make these changes, the Legislature offered planning grants both years, totaling just under $10 million given out by the Department of Commerce.
The most popular action local governments took, the report found, was to loosen zoning rules to allow for more housing, Bourassa said. About 49% of the governments receiving grants adopted inclusionary zoning, which includes changes that require affordable housing in some areas or allow for more density in others.
Another 27% reduced parking requirements, 26% implemented density bonuses for developers, 25% used the state’s multifamily tax exemption program, and 24% streamlined permitting or or reduced permit fees.
The report notes that the policy changes don’t necessarily mean that more housing will be built. And despite incentives and lower regulatory barriers, other obstacles emerged in recent years for projects, the report points out, including rising interest rates and higher construction costs.
Although most places that received grants made changes, a big portion of them did not.
“You would kind of hope it would be closer to 100%,” Bourassa said.
He noted that some governments that received funding had proposed ordinances that didn’t pass.
Larger cities and those in the Puget Sound region were more likely to implement more than one action item from the legislation while smaller, more rural cities and towns were less likely to implement one. The report specifically calls out Spokane, Vancouver and Bothell as those who made successful changes.
Since those laws passed, the state also passed laws to require local governments to allow for middle housing – duplexes, triplexes and quadplexes – and accessory dwelling units like a backyard cottage became law last legislative session.
The UW study doesn’t take into account these new laws.
Lawmakers will likely continue to expand requirements for more density, such as the transit-oriented development bill that has not yet made it through the Legislature.
“A lot of what the 2019 and 2020 legislation was trying to do was superseded by the new legislation,” Bourassa said. “Instead of incentivizing, now the state government is going to require you to do it.”
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