Washington SB 5496: Concerning local government infrastructure funding.

Bill Text

AN ACT Relating to preserving homeownership options by limiting 1
excessive home buying by certain entities; amending RCW 19.86.140; 2
adding a new chapter to Title 19 RCW; creating a new section; and 3
prescribing penalties.4
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:5
NEW SECTION. Sec. 1. The legislature finds that Washington 6
state is in a housing crisis, with few homes on the market that are 7
affordable to families of moderate incomes. The legislature has taken 8
steps in recent years to boost the state's housing supply through 9
grants and incentive programs, permitting reform, and increasing 10
density in certain land use zones. However, the state has seen the 11
median home price in Washington rise 74 percent between 2018 to 2024, 12
where in 2024, large institutional investors holding portfolios of 13
more than 100 single-family homes increased their holdings in the 14
Seattle metropolitan region by approximately 31 percent. The 15
legislature further finds that the concentration of single-family 16
homes in large institutional investor portfolios reduces 17
opportunities for Washington residents and families to purchase homes 18
and build intergenerational wealth, particularly in the state's 19
highest demand housing markets. Therefore, the legislature intends to 20
prohibit large investment and business entities from purchasing more 21
ENGROSSED SECOND SUBSTITUTE SENATE BILL 5496
State of Washington 69th Legislature 2025 Regular Session
By Senate Ways & Means (originally sponsored by Senators Alvarado,
Orwall, Bateman, Conway, Frame, Hasegawa, Lovelett, Nobles, Saldaña,
Stanford, Trudeau, Valdez, Wellman, and C. Wilson)
READ FIRST TIME 02/28/25.
p. 1 E2SSB 5496

of the state's existing stock of homes so that the affordable housing 1
supply is available for purchase by residents and families.2
NEW SECTION. Sec. 2. (1)(a) A business entity that has an 3
interest in more than 100 single-family residential properties may 4
not purchase, acquire, or otherwise obtain an interest in another 5
single-family residential property.6
(b) An investment entity may not purchase, acquire, or otherwise 7
obtain an interest in a single-family residential property.8
(2) For the purposes of this section:9
(a) "Business entity" means any association, company, firm, 10
partnership, corporation, limited liability company, limited 11
liability partnership, or other legal entity, and that entity's 12
successors, assignees, or affiliates. "Business entity" does not 13
include an investment entity.14
(b) "Investment entity" means:15
(i) A real estate investment trust as defined by any state or 16
federal statute; or17
(ii) An entity that manages funds pooled from investors and owes 18
a fiduciary to those investors.19
(c) "Single-family residential property" means a residential 20
structure that is:21
(i) A fully detached or semidetached building, which may include 22
one or more accessory dwelling units located within or attached to 23
the building; or24
(ii) A row home or townhome that is separated from any adjacent 25
unit by a ground-to-roof wall, does not share heating or air 26
conditioning systems or utilities, and does not have units located 27
above or below.28
(d) For the purposes of this subsection (2), "business entity" 29
and "investment entity" do not include businesses regulated under 30
state or federal banking or finance laws operating as commercial 31
banks, bank holding companies, savings banks, trust companies, 32
savings and loan associations, credit unions, mortgage lenders, or 33
mortgage servicers.34
(e) For the purposes of this subsection (2), "interest" does not 35
include: (i) Mortgages; or (ii) ownership or any other interest 36
obtained through foreclosure.37
(3) A business or investment entity is not subject to the 38
prohibitions in subsection (1) of this section if the entity is:39
p. 2 E2SSB 5496

(a) A nonprofit corporation or other nonprofit legal entity;1
(b) Purchasing an existing single-family residential property and 2
making modifications to the property that are necessary to achieve 3
substantial compliance with existing building codes;4
(c) Purchasing an existing single-family residential property to 5
increase the number of residential units on the property, which may 6
include single-family or multifamily units, only if the entity does 7
not hold a single-family residential structure longer than five years 8
without applying for building permits for the property;9
(d) Acquiring an ownership interest in single-family residential 10
property through the construction of new properties; or11
(e) A business entity purchasing through foreclosure or otherwise 12
acquiring a single-family residential property where the business 13
entity is currently servicing a recorded loan on the property.14
(4) The legislature finds that the practices covered by this 15
section are matters vitally affecting the public interest for the 16
purpose of applying the consumer protection