Department of Commerce outlines selected-review process under Housing Accountability Act; Bainbridge will submit materials this month

The Bainbridge Island City Council heard from the Washington Department of Commerce on Feb. 17 about the Housing Accountability Act and the state's selected-review process.

"The selected review process provides that Commerce may select up to 10 cities or counties a year for review of their housing elements and associated development regulations," said Laura Hodgson, housing planning and data manager in the Department of Commerce. Hodgson told the council Commerce used the statutory selection criteria this year to identify jurisdictions that had not planned for and accommodated their portion of the countywide housing need.

Hodgson outlined the review timeline and steps: jurisdictions must submit their 2024 comprehensive plans and housing-related development regulations and associated checklists to Commerce by the February 2026 deadline; Commerce will provide written comments identifying where plans or regulations may not align with state law; cities have 120 days to amend their comprehensive plans and development regulations to address Commerce's comments; Commerce will review adopted materials and issue a written decision in November (the year specified in Commerce materials).

Hodgson also described remedies available when a jurisdiction is found noncompliant. "Jurisdictions may not deny affordable or moderate income housing development," she said, and they may not approve such projects with conditions that have "substantial adverse impact on the project." She added that jurisdictions found out of compliance may also be ineligible for certain state grants and loans listed in Commerce materials.

Council members pressed Commerce staff on what the agency will and will not do in the process. "We don't want to dictate how you plan for your community," Hodgson said, describing Commerce's role as providing checklists, examples of model ordinances and technical assistance to staff, while leaving local policy choices to the city. She said Commerce will focus outreach and primary interactions through city staff rather than directly advising the council, though Commerce can present to the council when specific recommendations exist.

The council asked how voluntary and mandatory inclusionary zoning programs would be credited under HB 12-20, and how participation rates would be applied. Hodgson said voluntary programs are counted with participation-rate adjustments; mandatory inclusionary requirements count at face value but very high mandatory percentages that would preclude development may be considered differently because they could disincentivize building. On the question of subsidized or 100%-affordable projects, she said those can be part of a jurisdiction's plan when supported by evidence, but that jurisdictions should show how subsidies, incentives or funding gaps are addressed.

Council members also raised local environmental and infrastructure constraints. Council member Nelson asked whether the island's designation as a critical aquifer recharge area affects Commerce's analysis; Hodgson said the city is not automatically exempt because the city still allows development in some areas and that Commerce is still refining how exemptions apply in specific circumstances.

Why this matters: the review can affect what the city must demonstrate in its comprehensive plan and which policy tools will be accepted as evidence of capacity to accommodate housing needs across income bands. Council members emphasized the need to "show your work" with maps, land-capacity analysis and funding gap assessments to support policy choices.

Next steps: Council members approved a motion to send the item to the steering committee and to schedule a further study session so staff can work with Commerce and bring back concrete recommendations and draft materials for council review.