(1) Requirements. Counties and cities must develop a housing element ensuring vitality and character of established residential neighborhoods. The housing element must contain at least the following features:

(a) An inventory and analysis of existing and projected housing needs that identifies the number of housing units necessary to manage projected growth, as provided by the department, including units for moderate, low, very low, and extremely low-income households, and emergency housing, emergency shelters, and permanent supportive housing.

(b) A statement of the goals, policies, objectives, and mandatory provisions for the preservation, improvement, and development of housing, including single-family residences, and within an urban growth area boundary, moderate density housing options including, but not limited to, duplexes, triplexes, and townhomes.

(c) Identification of sufficient land for housing including, but not limited to, government-assisted housing, housing for moderate, low, very low, and extremely low-income households, manufactured housing, multifamily housing, group homes, foster care facilities, emergency housing, emergency shelters, permanent supportive housing, and within an urban growth area boundary, consideration of duplexes, triplexes, and townhomes.

(d) Adequate provisions for existing and projected housing needs of all economic segments of the county or city including:

(i) Incorporating consideration for low, very low, extremely low, and moderate-income households;

(ii) Documenting programs and actions needed to achieve housing availability including gaps in local funding, barriers such as development regulations, and other limitations;

(iii) Consideration of housing locations in relation to employment location; and

(iv) Consideration of the role of accessory dwelling units in meeting housing needs.

(e) Identification of local policies and regulations that result in racially disparate impacts, displacement, and exclusion in housing, including zoning that may have a discriminatory effect, disinvestment, and infrastructure availability.

(f) Identification and implementation of policies and regulations to address and begin to undo racially disparate impacts, displacement, and exclusion in housing caused by local policies, plans, and actions.

(g) Identification of areas that may be at higher risk of displacement from market forces that occur with changes to zoning development regulations and capital investments.

(h) Establishment of antidisplacement policies, with consideration given to the preservation of historical and cultural communities as well as investments in low, very low, extremely low, and moderate-income housing; equitable development initiatives; inclusionary zoning; community planning requirements; tenant protections; land disposition policies; and consideration of land that may be used for affordable housing.

(2) Recommendations for meeting requirements. The housing element shows how a county or city will accommodate anticipated growth and the allocated share of countywide housing needs of all economic segments (low, very low, extremely low, and moderate-income housing, permanent supportive housing, and emergency housing/shelters), provide a variety of housing types at a variety of densities, identify barriers to affordable housing for all economic segments of the county or city and actions to address housing availability, ensure the vitality of established residential neighborhoods, and address racially disparate impacts, exclusion and displacement in housing. The analysis of emergency housing and emergency shelters may be grouped together in the housing element. The following components should appear in the housing element:

(a) Statement of goals, policies, and mandatory provisions.

(i) The goals and policies serve as a guide to the creation and adoption of development regulations and may also guide the exercise of discretion in the permitting process.

(ii) The housing goals and policies of counties and cities should be consistent with countywide planning policies and, where applicable, multicounty planning policies.

(iii) Housing goals and policies should address at least the following:

(A) Housing affordable to all economic segments of the population;

(B) A variety of housing types along with a variety of densities;

(C) Preservation of existing housing stock, especially affordable housing;

(D) Consideration of character of established residential neighborhoods;

(E) Improvement and development of housing; and

(F) Within urban growth areas, provision of moderate density housing options including, but not limited to, duplexes, triplexes, and townhomes.

(iv) Housing goals and policies should be written to allow the evaluation of progress toward achieving the housing element's goals and policies.

(v) Mandatory provisions include a summary of required changes to accompany a comprehensive plan for consistency with state law. This includes, but is not limited to, a statement of regulatory changes needed to show sufficient land capacity and regulatory and policy changes needed to meet state law requirements.

(b) Housing inventory.

(i) The purpose of the required inventory is to gauge the availability of existing housing for all economic segments of the county or city.

(ii) The inventory should identify the amount of various types of housing that exist in a county or city. The act does not require that a housing inventory be in a specific form. Counties and cities should consider WAC 365-196-050 (3) and (4) when determining how to meet the housing inventory requirement and may rely on existing data.

(iii) The housing inventory should show the affordability of different types of housing, based on available data about the median sales prices of homes and average rental prices.

(iv) The housing inventory should include information about other types of housing available within the county or city such as:

(A) The number of beds available in group homes, nursing homes and/or assisted living facilities;

(B) The number of dwelling units available specifically for senior citizens;

(C) The number of government-assisted housing units for lower-income households; and

(D) The number of units of permanent supportive housing and transitional housing, and the number of units or beds of indoor emergency shelter and indoor emergency housing.

(c) Housing needs analysis.

(i) The purpose of the needs analysis is to estimate the type and densities of future housing needed to serve all economic segments of the county or city. The housing needs analysis should compare the number of housing units identified in the housing inventory by economic segment to the local allocation of projected 20-year countywide housing needs by economic segment to determine the total number of net new units needed.

(ii) When considering local shares of countywide housing need, counties and cities should consider the regional context of growth patterns, existing housing, neighboring jurisdictions and economies.

(iii) Counties should determine the local share of countywide housing needs by economic segment by coordinating with their cities and towns based on applicable countywide planning policies and multicounty planning policies, the availability of infrastructure and services, and other locally determined factors. When allocating projected housing needs, counties and cities should use the following minimum standards:

(A) The housing needs for each economic segment, permanent supportive housing, and emergency housing must use the same locally selected population projection as the input for the housing need projections provided by the department.

(B) Allocations must be consistent with relevant countywide planning policies or multicounty planning policies.

(C) The sum of all allocated housing needs must be no less than the total projected countywide need for each economic segment including permanent supportive housing and emergency housing. Within city limits, cities may choose to plan for more capacity than the allocated housing need if it is supported by necessary infrastructure and services and coordinated with surrounding jurisdictions.

(D) Counties should not plan for very low- or extremely low-income housing, permanent supportive housing or emergency housing outside of urban growth areas and LAMIRDs. New multifamily housing is generally required to reach these affordability levels, which is not appropriate in rural areas.

(E) Counties' and cities' allocations of projected housing needs by economic segment, permanent supportive housing and emergency housing must be in a public-facing document and used consistently in their comprehensive plans.

(iv) Counties and cities should analyze housing data by race to determine if there is evidence of racially disparate impacts, displacement and exclusion in housing, as well as identify areas at higher risk of displacement.

(d) Housing capacity.

(i) The housing needs analysis should identify the number, types, and general densities of new housing units needed to serve the local allocation of housing needs by economic segment.

(ii) To determine the number, types, and general densities needed, counties and cities should identify the types and densities of different housing types that will serve respective economic segments. For example, larger single family housing will likely serve households above moderate income (greater than 120 percent of Area Median Income) and could possibly serve moderate income households (80-120 percent AMI), therefore counties and cities should assume that capacity for those economic segments are met by the residential capacity of zones where this is the predominant housing type constructed.

(iii) Counties and cities should use the number, types, and densities of housing needed in the housing needs analysis to designate sufficient land capacity suitable for development in the land use element. Counties and cities may address accommodating capacity for housing needs at moderate-income levels and below by:

(A) Counting capacity for accessory dwelling units. Counties and cities should only assume a portion of residential parcels will develop an accessory dwelling unit within the planning period, based on market trends, infrastructure constraints, and existing homeownership association covenants. Accessory dwelling units should be counted towards capacity of the economic segment that best represents the costs of renting or purchasing this housing in the county or city.

(B) Increasing the variety of housing types allowed, increasing densities, and reducing parking requirements.

(C) Developing local incentives for more affordable housing, such as density bonuses, tax exemptions like the multifamily property tax exemption program, or fee or impact waivers for affordable housing. Counties and cities may also require affordable housing with market rate housing.

(iv) Counties and cities may use a variety of considerations to identify appropriate housing types, densities, and location of housing to accommodate housing needs, including:

(A) Location of low-income housing in proximity to jobs, transportation, services, and infrastructure.

(B) Jobs-to-housing balance, which is the number of jobs in a county or city relative to the number of housing units.

(C) The location of infrastructure and the costs to upgrade or extend needed infrastructure to serve higher density housing.

(D) Housing policies and regulations that have led to racially disparate impacts, exclusion, displacement, or displacement risk.

(E) Reasonable measures to address inconsistencies found in buildable lands reports prepared under RCW 36.70A.215.

(F) Housing needed to address an observed pattern of a larger quantity of second homes in destination communities.

(v) To demonstrate sufficient land capacity to meet the 20-year housing needs allocation, counties and cities should document in the housing element or an appendix:

(A) Their calculations for determining residential capacity in each zone including the data and assumptions used for acreages, densities, and market factors influencing development. The analysis must also show assumptions for which economic segments can afford the allowed housing types and densities. The calculations must also show the capacity for emergency housing and shelters by zone.

(B) The total capacity of housing units by economic segment compared to the 20-year housing needs allocation by economic segment, presented in a table;

(C) The zoning changes needed to provide a sufficient capacity of housing at all economic segments and an estimate of housing capacity by income segment under the updated zoning, to illustrate changes needed to address deficiencies. This should include emergency housing and shelters and permanent supportive housing. Jurisdictions must demonstrate that the zoning changes create housing capacity for each economic segment equal to or greater than allocated housing needs; and

(D) Calculations and analysis consistent with the department's technical guidance for performing a land capacity analysis.

(vi) The housing needs by economic segment in the housing element will serve as benchmarks to evaluate progress and guide decisions regarding development regulations.

(e) Adequate provisions. RCW 36.70A.070 requires counties and cities, in their housing element, to make adequate provisions for existing and projected needs for all economic segments of the county or city. All economic segments must include moderate, low, very low, and extremely low-income households and emergency housing, emergency shelter, and permanent supportive housing needs. Affordable housing under RCW 36.130.020 includes indoor emergency housing and transitional housing administered through a lease and permanent supportive housing.

(i) When determining which housing units are affordable, consider:

(A) In the case of dwelling units for sale, affordable housing has mortgages, amortization, taxes, insurance and condominium or association fees, if any, that consume no more than 30 percent of the owner's gross annual household income.

(B) In the case of dwelling units for rent, affordable housing has rent and utility costs, other than telephone, as defined by the county or city, that cost no more than 30 percent of the tenant's gross annual household income.

(C) Income ranges used when considering affordability. When planning for affordable housing, counties or cities should use income ranges consistent with the department's model for housing needs and the United States Department of Housing and Urban Development (HUD).

(ii) Adequate housing for all economic segments within the county or city requires planning from a regional perspective. Countywide planning policies must address housing affordable to all economic segments and its distribution among counties and cities.

Countywide planning policies should include consideration of the distribution of housing needs to begin to undo racially disparate impacts, exclusion, and displacement.

(iii) To make adequate provisions, counties and cities should identify barriers to addressing housing needs for all economic segments of the population, along with, but not limited to, development regulations, process obstacles, and funding gaps. Counties and cities should document the programs and actions needed to achieve housing availability, including the removal of housing barriers, through changes to development regulations, processes, incentives, and local funding opportunities. Jurisdictions should begin to take actions to address these barriers upon adoption of the plan.

(A) Examples of development regulation barriers include, but are not limited to, unclear or inconsistent development regulations, prohibiting more affordable housing types, large lot sizes, low maximum densities or building heights, large setbacks, and high off-street parking requirements.

(B) Examples of process obstacles include, but are not limited to, conditional use permit processes; lengthy or cumbersome design review; lack of clear information on processes and fees; high permitting, impact, or utility connection fees; and long permitting processing times.

(C) Examples of local funding opportunities include, but are not limited to, housing and related services sales tax, affordable housing property tax levy, real estate excise taxes, designating surplus lands for affordable housing projects, impact fee reductions or waivers for affordable housing projects in compliance with RCW 39.33.015, and the multi-family property tax exemption program.

(iv) The actions to address housing availability and barriers to housing production serve as benchmarks to evaluate progress and guide decisions regarding development regulations.

(v) When planning for all economic segments through housing capacity or adequate provisions, counties and cities should consider housing locations in relation to employment. This includes consideration of higher densities and capacities in proximity to employment centers, the location of housing in relation to public transit to employment centers, and consideration of the types of housing that local employees can afford.

(vi) Accessory dwelling units can help meet local housing needs. Counties and cities should consider the kinds of accessory dwelling units most likely to develop in their county or city, how the units will be used, anticipated capacity to accommodate project needs, and the barriers to developing the units.

(f) Racially disparate impacts, displacement, exclusion, and displacement risk.

(i) To identify and remove those policies and regulations that create and perpetuate inequitable housing outcomes, the department recommends counties and cities:

(A) Engage with the community. Identify the communities that may be experiencing disparate impacts, exclusion, or displacement, specifically communities that identify as Black, Indigenous, and People of Color (BIPOC), and develop a program of community engagement to support your analysis and assessment of racially disparate impacts in your existing policies and regulations.

(B) Gather and analyze data. Analyze data to assess racially disparate impacts, displacement, and exclusion in housing, and identify areas at risk of displacement. Analyze data by race and/or ethnicity in connection with the housing needs analysis. Counties and cities should engage impacted people and communities and other knowledgeable stakeholders to help interpret the findings from the analysis and provide greater insight into the factors that may cause racially disparate impacts in local housing policies or regulations.

(C) Evaluate policies. Based on information from (f)(i)(A) and (B) of this subsection, review existing housing policies and identify changes or new policies and regulations to address and begin to undo the racially disparate impacts and exclusion in housing and address displacement impacts.

(D) Revise policies. Revise existing policies to reduce and undo the disparate impacts, displacement, and exclusion, and develop policies to prevent displacement.

(E) Review and update regulations. Review and update regulations to achieve the goals and policies of the housing element in (f)(i)(D) of this subsection.

(ii) A variety of policy and regulatory solutions are available to counties and cities to address racially disparate impacts, exclusion, and displacement, including:

(A) Increasing affordable housing production through the generation of revenue for affordable housing and/or encouraging more affordable housing production through options such as, but not limited to, affordable housing incentive programs, density bonuses, zoning reforms, tax incentives, and fee waiver programs.

(B) Preservation of existing affordable housing through programs or policies including, but not limited to, mobile home park preservation or conversion to cooperative, supporting third-party purchases of existing affordable housing, creation of community land trusts, notice of intent to sell ordinances, and regulating short-term rentals.

(C) Protecting existing communities and households through programs or policies including, but not limited to, homeownership programs, such as those that support financial assistance to low-income homeowners or home repair and rehabilitation assistance; rental assistance; and tenant protections, such as right to return policies, rental inspection and registry programs, deferral of taxes, and tenant opportunity to purchase programs.

(D) Ensuring benefits of investment and development are equitably distributed through programs such as community benefit agreements, support of community-led investments, or monitoring of equitable outcomes.

(g) Implementation plan.

(i) The housing element should identify strategies designed to help meet the needs identified for all economic segments of the population within the planning area and the actions needed to remove barriers to local housing needs. It should include, but not be limited to, the following:

(A) Consideration of the range of housing choices to be encouraged including, but not limited to, multifamily housing, mixed uses, manufactured houses, accessory dwelling units, and detached houses;

(B) Consideration of various lot sizes and densities, and of clustering and other design configurations;

(C) Consideration of incentives to encourage development of affordable housing such as density bonuses, fee waivers or exemptions, parking reductions, and expedited permitting;

(D) Identification of a sufficient amount of appropriately zoned land to accommodate the identified housing needs of all economic segments over the planning period; and

(E) Evaluation of the capacity of local public and private entities and the availability of financing to produce housing to meet the identified need.

(ii) The housing element should also address how the county or city will provide for group homes, foster care facilities, and facilities for other populations with special needs, including indoor emergency housing, transitional housing, shelters, and permanent supportive housing. The housing element should provide for an equitable distribution of these facilities among neighborhoods within the county or city.

(iii) The housing element should identify strategies designed to ensure the vitality and character of existing neighborhoods. It should show how growth and change will preserve or improve existing residential qualities. The housing element may not focus on one requirement (e.g., preserving existing housing) to the exclusion of the other requirements (e.g., affordable housing) in RCW 36.70A.070(2). It should explain how various needs are reconciled.

(iv) The housing element should include provisions to monitor the performance of its housing strategy. A monitoring program may include the following:

(A) The collection and analysis of information about the housing market;

(B) Data about the supply of developable residential building lots at various land-use densities and the supply of rental and for-sale housing at various price levels;

(C) A comparison of actual housing development to the housing need allocations, policies and goals contained in the housing element;

(D) Identification of thresholds at which steps should be taken to adjust and revise goals and policies;

(E) A description of the types of adjustments and revisions that the county or city may consider; and

(F) Coordination with review and evaluation reports. For counties and cities subject to the buildable lands review and evaluation report requirements of RCW 36.70A.215, and the implementation progress report required in RCW 36.70A.130(9), any revision of the housing element shall include consideration of prior buildable lands reports and any reasonable measures identified.