AN ACT Relating to establishing land banking authorities;
HB1974 establishes a new framework for “land banking authorities” in Washington to help address the state’s housing shortage, especially the supply of affordable housing. The bill authorizes cities and counties, alone or in combination with contiguous counties, to create land banks through public corporations, public housing authorities, or certain nonprofit entities. These land banks may acquire, hold, lease, improve, and transfer real property for future affordable housing development, including tax-foreclosed or underutilized parcels, and may prepare property for productive use by clearing title, resolving liens, and undertaking predevelopment work.
The bill also sets conditions for how land bank property must be managed and disposed of. Transfers of land or property are generally required to align with local, regional, and state housing plans and anti-displacement policies, and at least 75 percent of property leased or sold by a land bank must include affordability covenants or deed restrictions lasting at least 50 years for rental housing and 99 years for owner-occupied housing. Land banks must file annual public reports detailing acquisitions, dispositions, prices, assessed values, housing units created, and progress toward equity and displacement-prevention goals. The bill also creates a tax preference by exempting certain land bank property from property taxation and related excise taxes, and it includes a performance statement directing future review of whether the tax preference lowers land costs for housing development.
HB1974 amends multiple provisions of Washington law and adds a new chapter to Title 35 RCW establishing land banking authorities and related powers, reporting duties, and tax treatment. It also modifies statutes governing county disposal of tax-foreclosed property and tax exemptions for public corporations and authorities, while creating a property tax exemption for nonprofit entities operating land banks. The bill further declares that land bank property is public property used for essential governmental purposes and exempts qualifying land bank property from state and local property taxes and special assessments, subject to specified exceptions and limitations.
The bill appears to have received generally favorable treatment in committee and on the floor, with unanimous or near-unanimous support in the House Housing Committee, House Finance Committee, and Senate Housing Committee, and strong majority support in the Senate Ways & Means Committee. Final floor votes in both chambers were more divided, but the bill still passed each chamber. Overall, the voting history suggests broad legislative support for the concept of land banking as a housing-supply tool, especially for affordable housing and redevelopment of underused property.
The main points of contention appear to have centered on the bill’s tax preferences, the scope of public authority over property acquisition and disposition, and the balance between affordable housing goals and local control. The Senate Ways & Means Committee amended the bill, indicating fiscal or policy concerns about the tax exemption and related impacts. The floor votes in both chambers were not unanimous, suggesting some legislators were concerned about granting land banks property tax exemptions, allowing transfers below market value, or prioritizing land bank acquisitions over other uses of tax-foreclosed property. The bill also explicitly addresses equity and displacement prevention, which may have been a point of support for some members and a point of concern for others wary of new governmental powers or mandates.