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Bill would target underutilized retail and commercial corridors for large-scale housing conversion; business groups back plan
Summary
Senate Bill 5,755 would direct Commerce to solicit and prioritize redevelopment proposals that convert large underutilized commercial properties to mixed-use housing, with incentives such as priority funding, density bonuses and parking reductions; supporters including Microsoft and Realtors testified in favor, while several opponents signed in.
Senate Bill 5,755 would require the Department of Commerce to solicit letters of interest from owners or developers of retail or commercial properties with potential for redevelopment to residential or mixed use. Staff described eligibility criteria including location inside urban growth areas, minimum project scale (250 new housing units), minimum street right-of-way width, and a scoring process that prioritizes projects providing public benefits. The bill would allow local density bonuses, eliminate most minimum parking requirements (except for ADA spaces and certain airports), and give prioritized access to several state funding programs (CHIP, Early Learning Facilities, Energy Efficiency Retrofit grants) where needed to move projects forward. The bill would also allow certain sales-and-use tax deferral eligibility and require at least 20% of units to be affordable to low-income households for 50 years to qualify for a new 20% MFE program. Those redevelopment incentives would expire June 30, 2027, under the bill as introduced.
Senator Alvarado, sponsor of the bill, framed SB 5,755 as a tool to unlock underutilized commercial corridors — malls, large retail sites and underused office parks — that are well-located near transit and services and could deliver significant housing supply if paired with incentives and aligned state investments. Alvarado said the measure is a “conversation starter” and urged partners — local governments, owners and Commerce — to use the pilot to test targeted incentives.
Business groups testified in support. Barb Wilson of Microsoft said the firm’s housing fund work demonstrates the need for policies that unlock land and lower development costs; “Senate Bill 5,755 hits the mark,” she said. Riley Benge of Washington Realtors also supported the bill, calling conversion of underutilized commercial property a “significant untapped opportunity” and praising the bill’s pathway for state-local coordination.
Staff noted a fiscal note had been requested but was not yet available. The hearing record shows a mixed written record — the clerk reported 4 pro and 22 con written sign-ins — and no committee vote occurred during the public hearing. Supporters and staff emphasized the bill is intended to accelerate large-scale projects that otherwise face regulatory complexity, while opponents in the written record raised standard concerns about community impacts, infrastructure costs and local planning controls.
If enacted, Commerce would be responsible for scoring applications, facilitating development agreements and coordinating priority grant access. The bill sets a tight timeline for letters of interest and Commerce determinations: letters due Oct. 1, 2025, eligible projects identified by Oct. 31, 2025 and scoring completed by Nov. 15, 2025, per staff briefing.
