The Builder’s Remedy is Coming to Washington State

A new state law signed Tuesday by Governor Bob Ferguson represents a sea change in how local housing regulations get implemented, with new guardrails added for cities, towns, and counties pushing every jurisdiction to do its part to allow housing growth. The new accountability rules include a novel provision called the “builder’s remedy” — modeled after a California state law — that would allow builders to move forward with housing projects automatically when a locality is found to be out of compliance with state housing law.

Senate Bill 5148, sponsored by Senator Jessica Bateman (D-22nd, Olympia) and known as the Housing Accountability Act, will add a brand new layer of oversight on the work that local cities and counties do to allow — or inhibit — housing construction.

“The intent about the Housing Accountability Act is to connect the dots between the land use actions that cities take and the outcomes that they get,” Bateman told The Urbanist. “If you have regressive land use policies and things that contribute to the overall cost of housing, making it less feasible, then you have a direct relationship to that outcome. You have the ability to change those things, and at the same time, cities will come to us and ask for infrastructure funding and housing funding… every single kind of funding that they want.”

Right now, the state’s role in implementing local Comprehensive Plans and new zoning ordinances is mostly advisory, with the Commerce Department regularly asked for guidance. However, nothing in place requires local governments to follow those recommendations. A jurisdiction can only be found out of compliance with the 1990 Growth Management Act (GMA) if an individual citizen or group files a complaint at the Growth Management Hearings Board (GMHB).

As it stands now, organizations like Futurewise have stepped in to fill the role of forcing local cities and counties to follow the law. Most recently Futurewise filed an appeal against the City of Mercer Island at the GMHB, alleging a failure to plan for housing that’s available for households of different income levels throughout the city’s borders, as required by House Bill 1220, which passed in 2021.

But with an appeal required against every jurisdiction to determine they’re out of compliance, two neighboring cities can have the exact same regulations in place, but only one gets held accountable by way of an appeal — an inherently inequitable process. SB 5148 is intended to level the playing field.

The act is set to create two tiers of state review of housing plans. A voluntary tier would allow cities to submit their plans and ordinances on their own accord and their own timeline — something that already happens now, by and large. But now, those plans and ordinances don’t actually take effect until the Commerce Department gives its stamp of approval. In other words, cities and counties can’t ask for Commerce’s guidance and then decide to go their own way, if the state believes their regulations aren’t aligned with what the law says.

For jurisdictions that don’t submit their plans voluntarily, the Housing Accountability Act also creates a targeted review track. Every year, the Commerce Department would be able to select up to 10 cities or counties that are not pulling their weight when it comes to allowing growth, and determine whether they’re in compliance with state law. The criteria for targeted review includes looking at whether a city is meeting its countywide growth target, whether housing production is lagging far behind other neighboring jurisdictions, when adjusted for population size, and whether the type of housing within that jurisdiction is more than 80% single-family homes that are far out of reach of median buyers.

If the state deems a city or county to be out of compliance, the clock starts on a 120-day period where a correction or revision has to occur in order to get back in compliance. If that doesn’t happen, the jurisdiction may not qualify for specific grants and loans under state programs, including the public works assistance account and funding for water pollution control assistance. But there’s another big incentive to get back in compliance — the builder’s remedy.

As long as a jurisdiction is found to be out of compliance with state housing law, that city or county can’t deny a permit application for a housing project as long as it includes a certain ratio of units dedicated as affordable housing. Builders could set aside 20% of the units as affordable housing available to households making under 60% of the area median income (AMI), or 50% of the units as workforce housing for households making below 80% of AMI, or all of the units as housing available to moderate-income households, at under 120% of AMI.

With guardrails that prevent builders from siting housing projects in critical areas, outside of the urban growth boundary, or in areas where residential uses aren’t already permitted, the provision — on paper, at least — would circumvent existing zoning and development standards and allow builders to go bigger and taller than they would otherwise be able to. Ultimately, the provision isn’t intended to be used; the aim is a nudge to get cities back into compliance before the builder’s remedy becomes an option.

California’s builder’s remedy dates back to a 1990 law, but it mainly sat unused until recently — after law professor Chris Elmendorf wrote a paper on the topic that appears to have spurred more usage. California’s law primarily served as a bargaining chip for housing developers. Virtually no builder’s remedy projects have actually been permitted as initially submitted, but the applications have often forced local governments to reckon with their own land use regulations.

“The builder’s remedy in California has been useful because it has made cities take planning for housing growth much more seriously than they otherwise would have, and it has made it easier for state housing regulators to enforce state law by giving it some teeth,” Max Dubler, Policy Manager for California YIMBY, told The Urbanist.

In 2022, when the City of Santa Monica’s housing element was found to be out of compliance by the state of California, a developer submitted a series of project applications, many of which well exceeded the local zoning allowances. The next year, after the city came back into compliance, a settlement agreement was reached with that developer, in which the original applications were suspended and projects that conformed with the city zoning code were able to move forward instead.

“There are situations in which local governments have been intransigent in blocking new housing until the developer brought up the possibility of using builder’s remedy, which focused those governments’ attention on how best to comply with state law in all of its permutations,” Dubler said.

Earlier this year, a new California state law took effect that clarified the builder’s remedy, making it easier for developers to utilize but scaling it back, requiring that projects continue to conform to existing zoning and density requirements for any underlying site. Instead, builder’s remedy projects in California now qualify for streamlined permitting and environmental review.

SB 5148 faced considerable opposition from local governments and their advocates, who argued that the state should be focused on funding badly needed affordable housing, even as subsidized affordable housing continues to be sited on a disproportionately small share of the state’s residential land.

“The assumption, or presumption I guess, is that cities won’t follow the law without the state looking over their shoulder, and we haven’t really seen any evidence that would support that,” Carl Schroeder, the Government Relations Deputy Director for the Association of Washington Cities, told the House’s housing committee earlier this spring. “We don’t control whether people come to build in our community, particularly on the lower-income side that needs subsidies and resources.”

But Bateman argues that local governments actually do have quite a bit of control over whether they are truly paving the way for housing growth within their borders.

“They’re saying that they’re innocent, that they’ve got no ability to address market factors, when in actuality, there’s a lot of things that are within their control that impact the market and what actually gets built in their communities, let alone them actually having to abide by the laws that we passed,” Bateman said.

What SB 5148 is certain to do is bring more scrutiny to just how actively cities are working to reduce those barriers — or working to keep them in place.

“I think it’s going to make a difference,” Bateman said. “It’s first of its kind in terms of how we have accountability for the housing element of the Growth Management Act land use planning. So we’ll see what happens.”

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