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Proposed Seattle bill would allow tax breaks for residential building conversion

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(The Center Square) – Seattle Mayor Bruce Harrell is proposing new legislation that includes exemptions and cost reductions to allow property owners to convert commercial buildings into residential housing as part of the mayor’s plan to build more housing in the city.

Harrell submitted the office-to-residential conversions legislation to the Seattle City Council on Thursday.

If passed by the city council, the bill would ​​establish guidelines for what qualifies as a residential conversion and provide broad exemptions from design development standards any time an existing structure is converted to housing.

The legislation would also reduce the cost of conversion to residential use by exempting housing conversions from the city’s Mandatory Housing Affordability requirements. Structures that qualify include offices and retail spaces.

The Seattle legislation builds on Senate Bill 6175 that passed the state Legislature this session. SB 6175 allows a city authority to establish a sales and use tax deferral for the conversion of a commercial building to provide affordable housing within the city. Gov. Jay Inslee is expected to sign the bill into law.

“With the recent passage of the state’s sales tax exemption on construction for projects converting nonresidential spaces to housing, this legislation is another powerful tool to tackle the housing crisis and replace building vacancies with vibrancy,” Harrell said in a news release.

The proposed legislation aligns with Harrell’s Downtown Activation Plan, which seeks to transition the downtown area into a more residential district.

Some members of the Seattle City Council have already signaled their support for Harrell’s legislation, including Councilmembers Tammy Morales and Robert Kettle.

“I am excited to work toward making our downtown affordable to more families and workers and look forward to reviewing this legislation in my Land Use Committee,” Morales said.

Last year, the city passed legislation that allows qualified developers to skip the environmental review process to speed up housing development. The legislation was created in conjunction with the Downtown Activation Plan.