2026 Legislative Session Recap: Legislature Adjourns Sine Die

The Washington State Legislature adjourned sine die on March 12, ending the 60-day 2026 session. Lawmakers passed several housing reforms aimed at improving permitting, expanding housing flexibility, and supporting homeownership, while the session’s final days were dominated by budget negotiations and a controversial new “millionaires’ tax.”

MBAKS Advocacy During Session

MBAKS members played an active role throughout the session, helping ensure the voice of the homebuilding industry was heard in Olympia. During MBAKS Hill Day, members held 43 meetings with legislators, discussing housing supply challenges and priority housing legislation. Builders also participated in BIAW Hill Day, where members conducted 13 additional legislative meetings. MBAKS members Mark Villwock with DR Horton and Mike Appleby with Chicago Title also provided key testimony on housing legislation during committee hearings, sharing firsthand industry perspectives on how policy decisions impact housing production and affordability.

Key Housing Bills Passed

Condominium Reform (HB 2304)
Allows condominium projects up to four stories and twelve units to use an insurance-backed express warranty, helping reduce litigation risk and encourage smaller condominium development.

Permit Review Streamlining (HB 2418)
Clarifies permit application completeness standards and requires jurisdictions to designate a permit contact, improving predictability in the review process.

Commercial-to-Residential Flexibility (SB 6026)
Allows housing in many commercial and mixed-use zones in cities over 30,000. Cities may require ground-floor commercial uses on no more than 40% of commercial or mixed-use acreage, allowing redevelopment of underutilized commercial property for housing.

Rural Accessory Dwelling Units (HB 1345)
Authorizes counties to allow detached ADUs in rural areas under local regulations.

Middle Housing in Urban Growth Areas (HB 2269)
Extends middle housing types such as duplexes and townhomes to unincorporated urban growth areas.

Building Code Modernization (HB 2228 & SB 5156)
Updates building code provisions by allowing scissor stair designs in certain mid-rise buildings and modernizing elevator requirements.

Budget and Tax Policy

Lawmakers also approved a supplemental operating budget for the 2025–27 biennium totaling more than $80 billion. The budget addresses a projected shortfall through a mix of spending changes, new revenue, and transfers from the state’s rainy-day fund.

The session also saw passage of a new “millionaires’ tax” (SB 6346), imposing a 9.9% tax on income above $1 million starting in 2028. The policy is expected to face legal challenges under Washington’s constitutional restrictions on income taxes.

Looking Ahead

With the session complete, attention now shifts to implementation as state agencies and local governments begin putting these new housing policies into practice.

Read more about the legislative session and a full bill tracker on MBAKS Connect.

By MBAKS Senior Policy Analyst Allison Butcher

The supply of housing inventory for sale in July remained very low in the Seattle market, with 1.13 months’ supply in King County and just 0.73 months’ supply in Snohomish County, according to the Northwest Multiple Listing Service. Meanwhile, single-family permits in the Seattle metro area (including King, Snohomish, and Pierce counties) were down 7% and multifamily permits down by 11% in June, compared to the same period last year.

The Office of Financial Management’s (OFM) annual population projections have been released, showing strong continued growth in Washington. The 2020 estimates indicate Washington’s population grew to more than 7.6 million people as of April 1. The Puget Sound region’s population, including King, Snohomish, Pierce, and Kitsap counties, grew by more than 60,800. According to OFM, most of the population change occurred before the COVID-19 crisis.

The Builder's Bulletin is intended to provide a convenient way to track housing in our market and includes information from the Northwest Multiple Listing Service, State of the Cities Data Systems, Office of Financial Management, and the Washington State Employment Security Department.

Download this month's report:

This year’s housing solutions breakfast highlighted local permitting changes to make home happen now. We’re thankful to have hosted Senator Mullet as our keynote speaker and a panel of local leaders including North Bend Mayor Rob McFarland,  Auburn Director of Community Development Jeff Tate, and Mill Creek Mayor Brian Holtzclaw, moderated by Snohomish County Executive Director Ken Klein.

The discussion focused on the important role a timely, predictable and fair permitting review process plays in our region’s ability to respond to the housing crisis. In recognition of its importance, on May 8, 2023 Governor Inslee signed into law  Senate Bill 5290 (sponsored by Sen. Mullet) aimed to reduce permit review timelines and facilitate swifter, more predictable construction. This new law will streamline the permit review process by requiring local governments to adopt and report timelines. To help jurisdictions comply, it also established grant programs and permit processing enhancements. This address historically slow permit processes that have elevated housing costs.

MBAKS is ready to serve as a resource with tools and best practices jurisdictions can implement now to comply with the new requirements.  The Housing Toolkit is intended to serve as a guide for local governments, listing specific code updates and process improvements jurisdictions can take to help provide more diverse, affordable housing. As an additional resource specific to SB 5290, MBAKS developed an overview of requirements and best practices to consider when implementing.