The 2025 session posed significant challenges, yet notable progress was achieved in increasing housing supply. Over the past five years, the focus has been on expanding housing availability, streamlining permitting processes, and mitigating market and transactional obstacles. The 2025 session resulted in the passage of more than a dozen new legislative measures aimed at these objectives. One of the more contentious bills was HB 1217, which introduced rent stabilization/rent control measures. Key provisions of this legislation include:

• Setting annual rent increase caps at 7% plus the Consumer Price Index (CPI), with a maximum of 10%. For mobile and manufactured homes, the cap is limited to 5% annually.
• Allowing rent rates to be adjusted when tenants change.
• Exempting new construction from rent caps for a period of 12 years from the date of occupancy permit issuance.
• Extending the notice period for rent increases from 60 to 90 days.
• Establishing a sunset clause, with the law expiring after 15 years.

During the session, the lobbying team and leadership also addressed a projected budget deficit estimated between $16 billion and $20 billion over four years. This financial challenge prompted proposals for various tax increases, including innovative ideas such as a “Wealth Tax,” which faced opposition from Governor Ferguson. Ultimately, the final budget package combined fiscal austerity measures with a revenue increase of approximately $9.4 billion over the next four years.

Fortunately, this revenue package did not significantly impact real estate taxes or related services. Looking ahead, ongoing uncertainties regarding state revenues and federal economic policies remain. Although 2026 is designated as a supplemental budget year, the lobbying team and leadership are actively monitoring these developments.

Mary Hull-Drury emphasized, “All eyes in Olympia will be on upcoming economic forecasts, as potential revenue shortfalls will influence many key issues in the 2026 Washington Legislative Session.”