SB 6175 Office-to-Residential Conversion Incentive

Allows cities to create a tax deferral program for converting underutilized commercial properties into affordable housing. 20% of units must be affordable to moderate incomes; half of units must be at or below federal fair market rents/prices.

The 2024 DSP Policy Platform aims to reduce barriers and costs, streamlining housing construction in Downtown Spokane. With high demand for rental housing leading to near-zero vacancy rates, it supports continuing successful programs like the multi-family tax exemption (MFTE) and adopting new incentives for under-utilized sites. The platform seeks to leverage federal, state, and local incentives for commercial-to-residential conversions, parking lot developments, infrastructure improvements, and Projects of City-Wide Significance. Additionally, it opposes regulations that delay or harm housing construction, emphasizing the need for workforce and "missing middle" housing.

On July 22, 2024, Spokane City Council unanimously resolved to fully enact SB 6175, establishing a sales-and-use tax deferral for converting commercial space to residential units. DSP staff supported the resolution and rulemaking to expedite the incentive for developers.

Department of Revenue plans to accept applications for the incentive by the end of August 2024. DSP will keep members informed about the program's final confirmation and availability.

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