House committee hears bill to let cities, counties offer sales-tax remittance for affordable housing

House Finance Committee members heard testimony Feb. 21 on House Bill 1717, which would authorize cities and counties to create a local sales and use tax remittance program for qualifying affordable housing projects beginning Jan. 1, 2026.

Under the bill, an eligible project must commit at least 50% of units to low-income households and guarantee affordability for 40 years; eligible organizations include nonprofit and for-profit developers, public housing authorities, and entities eligible under Washington State Housing Finance Commission rules. If approved, 50% of the state and local sales and use taxes paid by the eligible organization on construction would be remitted to the developer; the other 50% of the state portion would go to the authorizing city or county and must be used for acquiring, constructing, operating or maintaining affordable or permanent supportive housing, or for related behavioral health services.

“Residential development costs have risen about 36% since 2020,”…