RCW ch. 35.108 — Revised Code of Washington Chapter 35.108 RCW — Land Bank Authorities

RCW 35.108.010 Findings—Intent. (1) The legislature finds that solving the state's housing crisis requires a multipronged approach. Finding, acquiring, and holding land in the predevelopment phase is a time-consuming opportunity cost for all developers and is particularly acute for developers of affordable housing. The legislature also finds that the state needs more affordable housing, and land banks play a crucial role in the housing ecosystem by finding, acquiring, and holding land until a developer is ready to build on the parcel or parcels. (2) The legislature further finds that land banks provide a benefit to neighbors and the community by managing abandoned or underutilized properties, preventing blight and crime, and improving public health and safety. The state intends to enable land banks to operate regionally and provide incentives that result in reduced costs to hold property. In turn, land banks can coordinate with developers throughout their region to build mixed-income developments and give more Washingtonians a place to call home. (3) Therefore, the legislature intends to authorize land banking authorities to: (a) Operate as public land banks that hold property, tax-exempt, while preparing it for affordable housing and public benefit uses included with or attached to affordable housing; (b) Prioritize equity, displacement prevention, and use of land acquisition and disposition strategies to expand capacity and address historical racial segregation, redlining, steering, and land prospecting, that has led to disparities in access to education, living wage employment, affordable housing, and transportation, particularly for Black, indigenous, and other communities of color, to ensure that future development remedies rather than reinforces these patterns; and (c) Provide for governance and decision making that is representative, transparent, and inclusive so that land banking activities reflect the affordable housing needs of the region and help meet locally identified housing and infrastructure benchmarks. [ 2026 c 233 s 1.] RCW 35.108.020 Definitions. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise. (1) "Land bank" means the inventory of real property acquired, held, leased, or transferred by a land bank authority for purposes consistent with this chapter. (2) "Land bank authority" means an entity authorized by ordinance or resolution of a city or county legislative authority to establish and operate a land bank under this chapter. [ 2026 c 233 s 5.] RCW 35.108.030 Land bank authorities—Establishment. (1) A city or county legislative authority may authorize the establishment of a land bank by a public corporation established under RCW 35.21.730, a public housing authority established under chapter 35.82 RCW, or an entity exempt from federal income taxation under 26 U.S.C. Sec. 501(c)(3) of the internal revenue code of 1986, as amended. The city or county legislative authority must adopt an ordinance or resolution authorizing such entity to establish and operate a land bank. At a minimum, the ordinance or resolution must: (a) State the public purpose of the land bank authority, including acquiring, holding, managing, and transferring property for affordable housing consistent with adopted local housing plans and chapter 36.70A RCW; (b) Describe the governance or oversight structure applicable to the land bank authority; and (c) Authorize the land bank authority to acquire, hold, lease, and transfer real property, including transfers at less than fair market value in exchange for affordability requirements authorized under this chapter. (2) The legislative authorities of two or more contiguous counties may authorize the establishment of a land bank to be administered in accordance with an interlocal agreement. [ 2026 c 233 s 2.] RCW 35.108.040 Real property acquisition and disposition. (1) A land bank authority may acquire, hold, manage, improve, lease, transfer, or dispose of real property to be used as affordable housing. Real property held in the inventory of a land bank must be legally owned by the land bank authority. A land bank authority may also enter into contracts necessary to prepare property for productive use, including clearing title, addressing outstanding liens or taxes, and undertaking predevelopment activities. However, an entity that is exempt from taxation under 26 U.S.C. Sec. 501(c)(3) of the internal revenue code of 1986, as amended, and operating a land bank authority may not build or construct housing. (2) Land acquisitions and dispositions must: (a) Be consistent with any existing local, regional, or state housing plans and chapter 43.185B RCW, including the antidisplacement policies in the comprehensive plans of the county or city where the land is located; and (b) Demonstrate alignment with adopted local housing targets under chapter 36.70A RCW. (3) A land bank authority may lease or sell land to a housing developer at less than market rate in exchange for compliance with affordability requirements. Such transfers are not required to be made to the highest bidder. (4) At least 50 percent of the land or property leased or sold by a land bank authority must include a covenant or deed restriction that the housing units developed or operated must maintain affordability requirements for at least 30 years as follows: (a) Rental housing units must be affordable to households with an income at or below 80 percent of the area median income; and (b) Owner-occupied housing units must be affordable to households with an income at or below 120 percent of the area median income. [ 2026 c 233 s 3.] RCW 35.108.050 Annual report. (1) Each land bank authority must prepare an annual report. The annual report must include: (a) Real property parcels acquired, held, and transferred during the year; (b) The manner of disposition and alignment with local housing and land use plans; (c) How each action advanced a community benefit; (d) The purchase price and assessed value of each parcel acquired; (e) The sales price and assessed value of each parcel transferred; (f) The number of housing units developed on each parcel transferred; (g) The affordability covenants recorded for each parcel sold; and (h) Progress toward advancing equity, preventing displacement, and meeting locally identified housing needs. (2) A land bank authority must make annual reports publicly available and submit each report to any city or county in which it has acquired or transferred land or property in the last 12 months. Cities and counties receiving an annual report are encouraged to provide feedback on the land bank's activities and alignment with local housing and land use plans to help guide compliance with local and regional housing plans. [ 2026 c 233 s 4.] RCW 35.108.060 Property tax exemption—Land bank authority inventory. (1) All real and personal property owned by a nonprofit entity operating a land bank authority under RCW 35.108.030 is exempt from property taxation. (2) To qualify for this exemption, the nonprofit entity must be exempt from taxation under 26 U.S.C. Sec. 501(c)(3) of the internal revenue code of 1986, as amended. [ 2026 c 233 s 9.] NOTES: Tax preference performance statement—