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Senate committee hears bill to ease affordable housing on religious land, add tax exemption
Summary
A bill that would lower the affordability threshold for density bonuses on religious-owned property from 100% to 50% and create a limited sales/use tax exemption drew broad support from cities, faith groups and affordable-housing developers at a Jan.14 Senate Housing Committee hearing; counties and contractors urged funding or revisions for implementation and procurement provisions.
Senators and witnesses told the Senate Housing Committee on Jan. 14 that a targeted incentive package could unlock underused church land for affordable and workforce housing.
Senator Marcus Richelli, the bill’s prime sponsor, said the measure would lower the density-bonus affordability requirement for housing built on property owned or controlled by religious organizations from 100% to 50%, while allowing cities or counties to set higher thresholds locally. "If it doesn't pencil out, it's not going to get built," Richelli said, arguing the changes will help put more "shovels in the ground" on underutilized faith-owned land.
Committee staff explained the proposal also creates a sales-and-use tax exemption for construction, repair or improvement of qualifying projects, with applications accepted beginning Oct. 1, 2026, and an exemption sunset of Jan. 1, 2036. Staff also noted an updated fiscal note had been requested; the Department of Revenue provided preliminary administrative-cost and revenue-impact estimates in committee staff materials.
Supporters included city officials, housing nonprofits and faith leaders. Brian Grill, a faith-based housing developer, said churches often hold buildable land and that the tax exemption would be a "reliable source of funding" to help projects reach completion. Mayor Angela Birney of Redmond told the committee faith organizations are "key partners" in producing affordable housing. Reverend Drew Peterson of Knox Presbyterian in Spokane said churches in Spokane alone could yield substantial units if the incentives are used: "If only 20% of these properties were used to develop affordable housing ... we expect the number of projects that could be completed in the next 10 years could yield more than 1,000 units in Spokane alone."
Several cities described early success under narrower existing programs; Spokane has approved conditional projects totaling hundreds of units. Housing practitioners said density bonuses and deferrals can change project financing, allowing developers to build larger, family-sized units that otherwise would not be feasible.
Opposition and concerns were limited to implementation details. Curtis Steinhauer of the Washington State Association of County Planning Directors asked the legislature to provide funding for county planning departments, calling the requirement to update development regulations when requested an "unfunded mandate." Representatives of the Associated Builders and Contractors urged removing or revising a provision that conditions eligibility on project labor/community workforce or apprenticeship utilization requirements, saying the provision could disadvantage nonunion and small contractors.
The hearing concluded with broad stakeholder support for the bill’s goals and requests from local governments and industry groups for technical fixes and implementation funding. The committee took no final action during the hearing; testimony was closed for the bill and further work with sponsors was signaled.
