This bill adds a new section to chapter 36.70A RCW that restricts how certain cities and counties regulate residential uses in areas zoned for commercial or mixed use. It generally prohibits excluding residential uses in those zones and limits requiring mixed use or ground-floor commercial/retail as a condition of permitting residential development. The measure also expressly bars such requirements for publicly subsidized affordable housing as defined by the tax exemption referenced in RCW 84.36.560. The bill establishes a 40 percent cap on the portion of total acreage in commercial or mixed-use zoned areas where a jurisdiction may require mixed use or ground-floor commercial/retail as a permitting condition, subject to multiple enumerated exceptions. Specified exceptions include industrially zoned areas, land within 3,200 feet of active oil or gas refineries, sites involving historic landmark demolition, lands outside or noncontiguous to urban growth areas, areas subject to RCW 36.70.547 or 36.70A.530, tax increment financing areas established before the section takes effect, shoreline-adjacent environments that prohibit multifamily or mixed use, critical areas and buffers (with a carve-out for certain aquifer recharge areas), and areas allowing or incentivizing development up to at least 85 feet. The bill creates procedural requirements and clarifications for local governments: it requires an administrative process for applicants to seek reduction or waiver of ground-floor commercial/retail requirements (allowing jurisdictions to set criteria, timelines, and procedures), preserves any preexisting local waiver processes, confirms that compliance with other permits is still required before issuing building permits, permits local minimum density rules in commercial/mixed-use zones, and includes an 18-month deadline after the section’s effective date for adopting required ordinances or otherwise become subject to the section which will preempt conflicting local regulations. It also includes a provision allowing a purchaser of a lot subject to an existing permit to file a new development application if the lot is sold more than 18 months after the section’s effective date, and delays cities’ obligation to update growth and development assumptions until their next comprehensive plan update after January 1, 2031. The section applies to cities required or choosing to plan under RCW 36.70A.040 with populations of 30,000 or more as determined by OFM, and to counties required or choosing to plan that are not defined as rural under RCW 43.160.020. Important details are not provided in the extracted text: the section’s effective date is not stated, the method for calculating the 40 percent of total acreage is not described, and certain terms (for example, “station areas” and how shoreline adjacency is determined) are not defined here. Full interpretation will depend on the cited RCWs and other definitions not included in these extracts.

If enacted, larger cities and non‑rural counties would no longer be able to broadly force ground‑floor retail or mixed‑use in most commercial or mixed‑use zones: those mandates could apply to at most 40 percent of the acreage in such zones (with many specific exceptions), and publicly subsidized affordable housing could not be required to include ground‑floor commercial space. This will make it easier and cheaper for developers and affordable housing providers to build straight residential projects in commercial areas, reduce the risk that existing development permits are overturned, and force affected cities and counties to rewrite zoning rules or create a formal waiver process within 18 months or lose the ability to impose these commercial requirements until they comply. The people and agencies most affected are planning departments in cities with populations of 30,000+ and in non‑rural counties, residential and affordable housing developers, and downtown retail/grocery planners. Local governments will face the cost and workload of changing ordinances, setting up or keeping administrative waiver processes, and tracking which zones fall inside the 40 percent cap and listed exceptions (for example industrial zones, areas within 3,200 feet of active refineries, shorelines, certain tax increment financing areas, and zones allowing 85‑foot heights). The bill leaves unclear the section’s effective date and how exactly the 40 percent of acreage is calculated, so some practical implementation questions would remain.