Second Substitute House Bill 1516 — Insurance Study, Affordable Homeownership (Washington, 2025)

Summary

Second Substitute House Bill 1516, State of Washington, 69th Legislature, 2025 Regular Session, by House Appropriations, read first time February 28, 2025. The bill is an act relating to conducting a study of insurance coverage options for permanently affordable homeownership units. Section 1 directs the office of the insurance commissioner to conduct the study, in consultation with listed parties, and to submit a report on its findings by December 31, 2026. It defines permanently affordable homeownership and provides that the section expires December 31, 2027. Section 2 provides that the act is null and void if specific funding is not provided by June 30, 2025, in the omnibus appropriations act.

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“Second Substitute House Bill 1516 — Insurance Study, Affordable Homeownership (Washington, 2025).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2025-03-26-a33141-bill-1516-s2-f10eff66f6/, SHA-256 72b7a979e7feda7f6e2c17e1473f0114e7830fcd2fe4d7ab6520363b160b5afd.

Full text

     H-1809.1

                       SECOND SUBSTITUTE HOUSE BILL 1516


     State of Washington         69th Legislature       2025 Regular Session

     By House Appropriations (originally sponsored       by Representatives
     Hill, Taylor, Reed, Simmons, Morgan, Ormsby,        Farivar, Parshley,
     Gregerson, Macri, Ramel, Pollet, and Salahuddin)

     READ FIRST TIME 02/28/25.




 1       AN ACT Relating to conducting a study of insurance coverage
 2   options for permanently affordable homeownership units; creating new
 3   sections; and providing an expiration date.


 4   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:


 5       NEW SECTION.      Sec. 1.     (1) The office of the insurance
 6   commissioner shall conduct a study regarding how projects that
 7   develop new permanently affordable homeownership units may utilize
 8   different insurance coverage options and approaches to reduce costs
 9   related   to   condominium   construction   defect   liability   while
10   maintaining commensurate access to insurance coverage.
11       (2) The study must be conducted in consultation with: Identified
12   nonprofit   organizations  and   government   entities  that   sponsor
13   permanently affordable homeownership units; authorized insurers of
14   permanently affordable homeownership projects; unauthorized insurers
15   of permanently affordable homeownership projects; representatives of
16   the residential building construction industry; and relevant state
17   associations.
18       (3) In conducting the study, the insurance commissioner shall:
19       (a) Collect and use relevant findings from past insurance market
20   studies conducted by the office of the insurance commissioner on or
21   after December 31, 2017, or other relevant information released on or
                                       p. 1                         2SHB 1516
 1   after December 31, 2017, that may assist the insurance commissioner
 2   in conducting the analysis or making recommendations; and
 3       (b) Collect information and data from entities transacting
 4   insurance   in   the   state.   Any   identified   authorized   insurers,
 5   unauthorized insurers, and risk retention groups are required to
 6   provide the requested information and data to the insurance
 7   commissioner for purposes of this subsection.
 8       (4) The insurance commissioner may contract with actuarial or
 9   other consultants to facilitate the study.
10       (5) Consistent with RCW 43.01.036, the insurance commissioner
11   shall submit a report on its findings to the appropriate committees
12   of the legislature by December 31, 2026. The report must include:
13       (a) An actuarial analysis of how the condominium construction
14   defect   liability   risk   pools   for   nonprofit   organizations   and
15   government entities that sponsor permanently affordable homeownership
16   units may differ from for-profit models of condominium production,
17   sale, and ownership;
18       (b) An analysis of the role that the commissioner and insurers
19   can play to lower condominium construction defect liability insurance
20   costs for nonprofit organizations and government entities that
21   sponsor permanently affordable homeownership units; and
22       (c) Recommendations for how current or new insurance mechanisms
23   may be used to reduce insurance costs for nonprofit organizations and
24   government entities that sponsor permanently affordable homeownership
25   units.
26       (6) Funding for the study shall be provided from the insurance
27   commissioner's regulatory account established under RCW 48.02.190.
28       (7) For the purposes of this section, "permanently affordable
29   homeownership" means a unit that, in addition to meeting the
30   definition of "affordable housing" in RCW 43.185A.010, is:
31       (a) Sponsored by a nonprofit organization or governmental entity;
32       (b) Subject to a ground lease or deed restriction, the forms of
33   which may include a ground lease, deed restriction, community land
34   trust lease, or affordability covenant that includes:
35       (i) A resale restriction designed to provide affordability for
36   future low and moderate-income homebuyers;
37       (ii) A right of first refusal for the sponsoring organization to
38   purchase the home at resale, except in cases where the sponsor
39   organization   is   a   limited   equity   cooperative,   defined   as


                                       p. 2                         2SHB 1516
 1   "cooperative" in RCW 64.90.010, and the sponsor organization is not
 2   partnered with a community land trust; and
 3       (iii) A requirement that the sponsor must approve any refinancing
 4   secured by the home, including home equity lines of credit, except
 5   where the sponsor organization is a limited equity cooperative,
 6   defined as "cooperative" in RCW 64.90.010, and the sponsor
 7   organization is not partnered with a community land trust; and
 8       (c) Sponsored by a nonprofit organization or governmental entity
 9   and the sponsor:
10       (i) At the initial sale and at each successive sale of the unit,
11   executes a new ground lease or deed restriction, the forms of which
12   may include a ground lease, deed restriction, community land trust
13   lease, or affordability covenant with a duration of at least 99
14   years; and
15       (ii) Supports the unit's homeowner and enforces the ground lease
16   or deed restriction.
17       (8) This section expires December 31, 2027.


18       NEW SECTION.   Sec. 2. If specific funding for the purposes of
19   this act, referencing this act by bill or chapter number, is not
20   provided by June 30, 2025, in the omnibus appropriations act, this
21   act is null and void.

                                  --- END ---




                                     p. 3                        2SHB 1516

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