WA Senate passes tax proposal to boost affordable-housing funding

The Washington State Senate has approved a bill – for the second year in a row – to give local governments a new taxing authority to support their affordable housing and homeless service efforts. 

Senate Bill 5334 also passed the Senate in 2023, but the session ended before the House and Senate could work out compromise language.

The proposal would allow counties and cities to adopt an excise tax on the sale of lodging or short-term rentals. The revenue generated could be used to pay for various programs, including homeless assistance, temporary shelters and affordable housing. Local governments, however, could exempt seniors or people on a fixed income who operate a short-term rental. 

The bill, sponsored by Sen. Liz Lovelett, D-Anacortes, passed the Senate primarily along party lines. However, Sen. Nikki Torres, R-Pasco, voted in favor with Democratic senators, while Sen. Marko Liias, D-Edmonds, voted against the bill with Republican senators. The bill now moves to the state House for consideration. 

Increasing affordable housing continues to be a top priority for lawmakers and Gov. Jay Inslee, with various proposals this session from legislators on both sides of the aisle. In a recent Elway poll, Democratic voters in Washington strongly supported spending more on housing, while most Republicans were against the idea.

Short-term rentals have been seen as detrimental to local housing supplies, and various proposals at all levels of government, such as one by the Seattle City Council, have been passed to limit such listings.