AWB warns rent-control provisions and affordability rules could deter new construction near transit

At the AWB spring meeting, Morgan Erwin, AWB’s interim vice president of government affairs, identified House Bill 1217 as a central housing-policy development this session and explained how the measure and related land-use changes could affect housing production.

Erwin summarized the bill’s key provisions as presented to the audience: annual rent increases are capped at 7% plus the consumer price index with a hard cap of 10%, and new construction is exempt from rent-control rules for 12 years. He said lenders told AWB they would be reluctant to finance multifamily projects that cannot predict revenue 12 years into the future, which could undercut the governor’s stated 50,000-unit housing goal.

Erwin also explained transportation-oriented development (TOD) changes passed this session, which adopt high-density housing near transit and strong affordability requirements — the panel said those requirements, which rely on area AMI and often require a significant percentage of units at lower rents, can make projects financially marginal and, in some jurisdictions elsewhere, have produced empty affordable units because few households qualify.

AWB argued the combination of rent-control limits, lengthy post-construction obligations and steep affordability set-asides could shift development away from transit corridors and reduce the pipeline of new housing that the state hopes to produce. Erwin urged stakeholders to monitor financing responses during the interim and engage in policy refinement.

The presentation reflected AWB’s assessment and included cautionary economic arguments from the perspective of developers and lenders; the transcript records those claims as AWB testimony, not as conclusive outcomes of lender behavior.