Bill would let utilities use additional funding sources to waive connection charges in large inland counties

Senate Bill 5,662, heard March 18 by the House Housing Committee, would allow municipal utilities in counties east of the Cascade crest with populations greater than 500,000 to use additional funding sources to pay for waived utility connection charges for properties developed by certain affordable housing providers, subject to recorded covenants and conditions, speakers said.

Audrey Vaisik, staff to the committee, summarized the bill as a targeted change to existing waiver authority for municipal water and sewer connection charges. Under current law, local waiver programs may be funded only from general funds, grants, or other identified revenue streams; the bill authorizes other funding sources for qualifying counties if the waiver is conditioned on a recorded covenant with price restrictions and household income limits and requires repayment of connection charges if the property is converted to an unauthorized use.

Senator Marcus Richelli, sponsor for the Inland Empire, said the amendment limiting the change to the inland county was added after objections from some utilities; he said the measure was requested by the Spokane Low Income Housing Coalition and intended to help nonprofit developers such as Habitat for Humanity. Dana Leroy, policy and advocacy coordinator for Habitat for Humanity Spokane, told the committee that in Spokane a recent increase in general facilities charges would add about $16,000 per new Habitat home and that the proposed authorization is “crucial and critical legislation” to continue affordable homeownership projects.

Ben Stuckert of the Low Income Housing Consortium explained the legislative background: waiver authority existed, but a 2023 amendment required identification of a funding backfill after cities raised connection fees sharply, which blocked some planned waivers. Stuckert and other witnesses said Spokane’s general facilities charges rose rapidly in 2023—witnesses cited increases described as 500% or larger—and that the waiver authorization would allow local governments and nonprofit developers to craft workable backfill solutions at the local level.

Community Bankers of Washington supported changes to how a newly proposed mortgage fee would be applied in another bill, and emphasized changes in the lending market; Brad Tower noted several state‑chartered banks had recently left residential lending. Committee members asked whether allowing additional funding sources would shift costs to other utility ratepayers; sponsor and witnesses said Spokane’s volume of waived projects is relatively small (about 250 units per year) and the bill was limited geographically to reduce broader impacts. Representative Jacobson asked whether waiving capital buy‑in fees could produce unintended pressure to raise impact fees elsewhere; witnesses said the measure mirrors prior impact‑fee waiver language and that limiting the change to Spokane County would keep overall utility impacts small.

Ending: Supporters characterized the bill as a narrowly targeted tool to preserve affordable housing production in Spokane County after sharp increases in connection and facility charges; opponents did not dominate the hearing record, and committee members asked questions about statewide spillovers and funding mechanics. No committee vote was taken on March 18.