This article is part of the 2025 Mid-Year Housing Industry Update. Click here to read the full newsletter.
Washington State continues to advance efforts to address both housing supply and housing costs. The 2025 legislative session delivered a suite of bills aimed at limiting the rate of rental cost escalations, increasing housing production, streamlining permitting, and clarifying legal processes for local jurisdictions and developers. Below is a summary with links to the full bill texts.
Together, these reforms reflect a deepening commitment by Washington lawmakers to unlock housing supply while maintaining transparency, affordability, and environmental stewardship. Most of the enacted bills listed below became effective in July 2025. As implementation unfolds, Ballard Spahr will continue to monitor local rulemaking and advise developers and municipalities on how best to navigate the evolving regulatory landscape.
This bill aims to offer greater stability and transparency for tenants while also providing clear enforcement mechanisms. It also outlines various tenant protections under the Residential Landlord-Tenant Act (RLTA) and the Manufactured/Mobile Home Landlord-Tenant Act (MHLTA):
- Rent Increase Limits: Limits rent hikes to the lesser of 7% plus the Consumer Price Index (CPI) or 10% within any 12-month period under the RLTA, and 5% under the MHLTA. The rent increase limits do not apply to buildings less than 12 years old, buildings operated by public housing authorities, certain qualified low-income housing developments, or for tenancies in certain owner-occupied rentals.
- Additional Tenant Protections: Provides lease termination provisions, requires a 90-day notice for rent increases under RLTA, and places limits on move-in fees, security deposits, and late fees under MHLTA.
- Enforcement: Allows tenants or the Attorney General to pursue legal action for noncompliance with the bill. " Landlord Resource Center: Establishes an online resource center for landlords.
- Expiration: The rent increase limit and related provisions of the RLTA will expire on July 1, 2040.
SB 5313 - Adds a list of provisions prohibited in rental agreements.
The measures aim to protect tenant rights and ensure transparency in rental agreements.
- Prohibits waivers: Tenants cannot be required to waive claims against landlords or their agents.
- Bans non-disclosure agreements: Prevents NDAs related to rental price, lease terms, deposits, and incentives.
- No mandatory arbitration: Prohibits requiring tenants to agree to arbitration provisions.
HB 1491 - Promoting transit-oriented housing development.
The bill aims to encourage sustainable, affordable development near transit hubs while providing financial incentives to cities for implementation.
- City requirements: Cities that plan under the Growth Management Act must allow new residential and mixed-use developments within station areas at specific transit-oriented development (TOD) densities.
- Establishes affordability and tax exemptions: Sets affordability requirements and provides a 20-year multifamily property tax exemption (MFTE) for residential and mixed-use buildings in station areas.
- Reduces impact fees: Cities must reduce certain impact fees by 50% for projects in station areas that qualify for the MFTE.
- Grant program: The Department of Commerce will manage a grant program to help cities with infrastructure, planning, and staffing needed to implement TOD requirements.
Washington expanded its MFTE program to support affordable housing near high-frequency transit. Cities and certain counties can now offer 12- to 20-year exemptions for rental and ownership projects in designated areas, with updated income eligibility and anti-displacement requirements. New rules also introduce sliding-scale penalties for noncompliance, rather than automatic exemption loss.
A new MFTE authority is established:
- Cities with 15,000+ people and mandatory inclusionary zoning can offer a 20-year rental exemption within one mile of high-capacity transit (running every 15 minutes or less).
- Unincorporated Counties with 170,000+
residents can offer:
- A 12-year exemption and a 20-year homeownership exemption in urban growth areas (UGAs), if they meet certain criteria—such as having a college campus with 1,200+ residential students or promoting transit-friendly densities near frequent bus service (10+ times/day each direction).
- Applies to Clark, Kitsap, and Snohomish Counties; Pierce and King counties maintain existing rules.
- Program changes:
- Households can stay in MFTE housing until income exceeds 150% of the qualifying limit.
- Owner-occupied projects using the 12-year exemption must have deed restrictions ensuring affordability.
- Cities must ensure new residential targeted areas (RTAs) meet anti-displacement rules under the Growth Management Act (GMA).
- Penalties:
- A sliding scale penalty may be imposed for noncompliance (e.g., not providing the promised number of affordable units or failing to verify tenant income), rather than full cancellation of the exemption.
HB 1075 removes a prior restriction that capped rents at 15% of AMI for publicly financed developments owned by for-profit entities—unlocking more flexibility in how public housing authorities can partner with private developers.
This bill extends property tax exemptions for ADUs to additional counties, provided the units are maintained as low-income housing, defined as serving households with an adjusted gross income below 60% of AMI.
HB 1757 - Modifying regulations for existing buildings used for residential purposes.
This bill aims to make it easier to convert existing buildings into housing by reducing regulatory barriers and easing energy code requirements for certain projects.
ESSB 5184 - Concerning minimum parking requirements.
This bill aims to reduce mandatory parking requirements to support housing development, small businesses, and walkable communities, while allowing exceptions for small cities, safety, and special use cases.
SHB 1061 - Provides additional parking flexibility in residential neighborhoods.
This bill aims to give residential property owners more flexibility with their driveways by allowing them to park—or permit others to park—across their own driveway entrances, with some restrictions.
12 ESB 5559 - Streamlining the subdivision process inside urban growth areas.
This bill aims to standardize and streamline the process for unit lot subdivisions in cities and towns planning under the GMA, supporting more flexible housing development while maintaining clear regulations and community notice. Cities are required to adopt unit lot subdivision ordinances within two years of the bill's effective date.
E2SHB 1096 - Increasing housing options through lot splitting.
This bill aims to simplify and expedite the approval process for lot splits by requiring cities to use a streamlined, administrative review based on clear and objective standards.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
