Not every bill from Washington’s 2026 legislative session was about tenant protections and notice requirements. Three bills signed by Governor Ferguson are genuinely positive news for housing supply, real estate investment, and the long-term fundamentals of the Puget Sound rental market.
These are not dramatic short-term events. None of them will flood the Eastside with new inventory by summer. What they do is remove structural barriers that have kept housing supply artificially constrained for years. For investors who are thinking about this market over a five-year horizon, that context matters.
Here is what each bill does, what it does not do, and what it means practically for landlords and investors in Seattle, Bellevue, Redmond, and across the Eastside. All three bills were signed by Governor Ferguson as part of a broader housing package and carry an effective date of June 11, 2026.
First: The Supply Problem Washington Is Trying to Solve
To understand why these bills matter, you need to understand the structural supply gap the Puget Sound region has been building for decades. Washington did not reach its current housing shortage by accident. It accumulated through decades of zoning restrictions, lengthy permitting processes, and regulatory barriers that made it easier to block housing than to build it.
A Sightline Institute analysis prepared for the SB 6026 legislative record found that more than 75 percent of parcels affected by current commercial zoning restrictions cannot accommodate residential use, even where commercial use is already permitted. The same analysis found that SB 6026 alone could increase the amount of land available for multifamily housing by 62 percent in affected jurisdictions.
On the rental market side, according to Kidder Mathews’ Q4 2025 market research, Seattle’s multifamily construction pipeline stood at 17,089 units, a 23 percent decline from the prior year. The construction slowdown is real, and it is creating the conditions for a tighter rental supply environment as the current wave of deliveries is absorbed through 2026 and 2027.
Meanwhile, Washington’s single-family rental market data for 2025 showed Seattle reaching median rents for three-bedroom single-family homes of $3,695, a 4.1 percent year-over-year increase, while the national median held flat. The state significantly outperformed the national market, and Seattle and the Eastside outperformed Washington as a whole.
This is the market context in which these three supply bills passed. They are not solving the housing crisis overnight. They are removing some of the legal barriers that prevented the crisis from being addressed sooner.
Want to understand how the 2026 supply picture affects your specific rental property?
SJA tracks both the legislative environment and Eastside rental market data to help owner-clients price accurately and plan strategically. A free rental estimate is the starting point.
SB 6026: Housing Can Now Be Built in Commercial Zones Across Washington
SB 6026 at a glance
Bill: SB 6026 (Chapter 236, 2026 Laws)
Signed by: Governor Ferguson
Effective: June 11, 2026
Vote: 35 to 14 in the Senate, 69 to 27 in the House
Core requirement: Local governments with populations over 30,000 must allow residential development in areas zoned for commercial or mixed-use. Cities cannot mandate ground-floor commercial space in most of these areas.
This is the largest of the three bills in terms of scale. Sponsored by Sen. Emily Alvarado and requested by Governor Ferguson, SB 6026 requires every city and county with a population greater than 30,000 to allow housing in areas already zoned for commercial or mixed-use purposes. The practical targets are exactly what you would expect: vacant strip malls, abandoned big-box stores, underused parking lots, and struggling commercial corridors that are not viable retail spaces but sit on land with existing infrastructure.
“With this legislation, vacant strip malls, abandoned big-box stores and empty parking lots can be transformed into housing,” said Sen. Alvarado at the signing ceremony. “This bill removes unnecessary barriers and makes it easier to build the homes our communities need.”
“The need for more housing is urgent,” said Governor Ferguson. “We must make it as easy as possible to plan, permit and build housing to address the crisis. This bill removes barriers to clear the way for more housing all across Washington.”
What the bill specifically requires
- Cities and counties over 30,000 in population must allow residential development as a by-right use in commercial and mixed-use zones
- These jurisdictions cannot require mixed-use or ground-floor retail as a condition of approval in most of these zones
- Affordable housing projects are fully exempt from any ground-floor commercial mandate
- Cities can still maintain ground-floor commercial requirements in up to 40 percent of their total commercial or mixed-use acreage, with exceptions for industrial zones, transit station areas, and designated historic landmarks
- Critical area buffers are exempt from the requirement
What this means for Eastside investors
The affected cities in the Puget Sound area are significant. Bellevue, Redmond, Kirkland, Bothell, Sammamish, Shoreline, and Renton all exceed 30,000 in population. Seattle has its own separate housing policy landscape, but the bill applies there as well.
For investors, SB 6026 does three things over the medium term. First, it expands the pool of properties that can be converted or developed for residential use, which creates new acquisition opportunities that did not exist before. Second, it relieves some of the pressure that commercial-only zoning has placed on the existing residential inventory by adding new supply pathways. Third, it reflects a shift in how Washington’s major cities are being directed to think about land use, one that moves away from rigid single-use separation and toward the kind of mixed-use development that characterizes the most economically durable neighborhoods in any city.
The Tacoma-Pierce County Association of Realtors’ 2026 legislative session summary describes SB 6026 as opening “new opportunities for housing growth” by unlocking commercial zones for residential development. The Washington Realtors’ legislative recap listed the bill as a supported measure that passed.
For existing landlords in commercial corridors of Bellevue, Redmond, or Kirkland, this bill does not change your current property’s status. What it changes is the competitive landscape for new development around you over the next decade, and it changes it in a direction that should attract more investment, more infrastructure attention, and more market activity to those corridors.
Considering a rental property near a commercial corridor in Bellevue, Redmond, or Kirkland?
SJA manages properties across the Eastside and tracks how zoning and legislative changes affect specific submarkets. If you want expert guidance on how SB 6026’s changes affect investment decisions in specific Eastside neighborhoods, our team can help.
Schedule a free strategy consultation with SJA’s Eastside property management team
HB 2304: Washington Makes It Easier to Build and Sell Condos
HB 2304 at a glance
Bill: HB 2304 (Chapter 7, 2026 Laws)
Effective: June 11, 2026
Vote: 94 to 0 in the House, 47 to 0 in the Senate
Core change: Expands the 2-10 express warranty option to condo buildings up to four stories, making it financially viable for smaller developers to sell condos rather than defaulting to rentals.
This bill is more technical than SB 6026 but its implications are meaningful. To understand it, you need a brief background on why Washington has a condo supply problem.
For years, Washington’s condominium construction liability framework created an environment where small to mid-size developers consistently chose to build purpose-built rentals rather than condos. The implied warranty of quality that applies to condos carries broad liability exposure that makes construction-defect litigation risk far more significant for condo projects than for comparable rental buildings. As a result, more than 93 percent of multifamily units delivered in Seattle since 2010 were built as rentals, not for-sale homes, according to analysis published in Seattle Agent Magazine.
HB 2304 builds on 2025’s HB 1403, which created a 2-10 express warranty alternative for small condo projects up to two residential floors. HB 2304 extends that same alternative to buildings up to four stories. According to the Housing Development Consortium’s legislative tracker, stacked flats up to four floors use similar construction techniques to detached single-family homes, making the 2-10 warranty a practical and appropriate risk management tool for this building type. The bill passed 94 to 0 in the House and 47 to 0 in the Senate.
What the 2-10 express warranty alternative means in practice
Under HB 2304, a condo developer building a project of 12 or fewer units and four or fewer stories can offer buyers an express warranty backed by insurance covering one year for workmanship, two years for mechanical systems, and ten years for structural defects. In exchange, the developer is not subject to the broader implied warranties of quality that carry open-ended litigation exposure.
This trade is the same one that makes the 2-10 warranty standard for detached single-family home construction. By extending it to four-story stacked flat condo projects, HB 2304 removes the liability barrier that has caused so many developers to choose rentals over for-sale condos in the middle housing segment.
What this means for investors
In the short term, nothing changes for existing rental property investors. HB 2304 does not affect how your current units are managed, leased, or priced.
Over the medium term, the implications are more nuanced. More condo supply at the entry-level and middle-market price point means more first-time buyers converting from renters to owners. That is not inherently bad for rental investors. The tenant pool in Seattle and the Eastside is deep and consistent. What it does change is the composition of demand: over time, more renters who might have rented indefinitely will have viable ownership options they did not have before, and that shifts the profile of who is renting and why.
For investors considering whether to hold rental properties or sell into the condo conversion market, HB 2304 is worth watching. As more small condo projects become financially viable for developers, the resale value of existing rental buildings in desirable Eastside submarkets may be affected by the changing economics of new construction. This is a multi-year trend, not an immediate event, but it is a structural shift that investors should understand.
For those interested in our Eastside rental market analysis covering how tech sector demand shapes Bellevue, Redmond, and Kirkland, that context is directly relevant to how condo supply changes will interact with Eastside rental demand over the next several years.
HB 1345: Rural Counties Can Now Allow Detached ADUs Outside Urban Growth Areas
Bill: HB 1345
Effective: June 11, 2026
Vote: 86 to 5 in the House, bipartisan support
Core change: Fully planning counties may now permit detached accessory dwelling units outside urban growth areas, with limitations on size, water use, and population impact. Applies to one ADU per parcel.
HB 1345 is the most targeted of the three bills. Where SB 6026 unlocks commercial land for urban residential development and HB 2304 addresses the condo construction pipeline, HB 1345 opens a new housing option specifically for rural property owners outside urban growth boundaries.
Until now, detached ADUs (also called backyard cottages, in-law suites, or DADUs) were restricted from being built outside urban growth areas under the Growth Management Act. HB 1345 authorizes counties that fall under the Growth Management Act’s full planning requirements to allow one detached ADU per parcel outside the urban growth boundary, subject to specific development regulations.
Key limitations built into the bill
- One ADU per parcel maximum, either attached or detached
- Counties must have code enforcement measures in place before allowing rural DADUs
- Counties must track and annually report completed DADU permits to the Department of Commerce
- ADUs cannot be built on lots with critical area designations, critical area buffers, or certain watershed protections
- Water availability and impact on population growth targets must be addressed in county comprehensive plans
- The bill preserves validity of ADU ordinances adopted by counties before the effective date
What this means for Eastside and Puget Sound investors
For urban and suburban investors in King, Snohomish, or Pierce counties, HB 1345 has limited direct impact on your existing portfolio. Urban and suburban ADU rules were already addressed in prior legislation, and the new rural ADU authorization applies specifically to areas outside urban growth boundaries.
Where HB 1345 is more relevant is for investors or landowners with larger rural parcels in counties adjacent to the core Puget Sound markets, particularly in eastern Snohomish, Kittitas, or Pierce counties. For those properties, the ability to add a detached ADU creates a rental income opportunity that previously did not exist legally, and it does so without requiring a subdivision or major infrastructure investment.
It is also worth noting what HB 1345 does for the broader housing environment of the Puget Sound region. More ADU options in rural areas reduces some of the pressure that rural workers and families have historically had to live in urban or suburban markets due to lack of housing options in their own communities. That is a modest supply-side signal, but it is part of a consistent legislative pattern of opening new housing pathways at multiple scales.
What These Three Bills Mean Together for the Puget Sound Investment Thesis
Taken together, SB 6026, HB 2304, and HB 1345 reflect a Washington State legislature that is genuinely trying to unlock housing supply from multiple directions simultaneously: urban commercial land, middle-market for-sale housing, and rural ADUs. None of these bills is a silver bullet. All of them contribute to a structural shift in how land can be used for residential purposes in Washington.
For real estate investors, the Puget Sound rental market’s fundamental appeal rests on three pillars: sustained high-wage employment demand driven by tech sector concentration in Bellevue, Redmond, and Kirkland; a chronic housing shortage that keeps vacancy rates low and rent pressure steady; and geographic constraints that limit how quickly new supply can respond to demand. These three bills address the second and third of those pillars without diminishing the first.
The data supports continued confidence in the Eastside rental market specifically. According to Kidder Mathews’ Q4 2025 market research, Seattle’s multifamily vacancy rate held steady at 7.4 percent year-over-year, with absorption continuing at stable rates even as new supply has entered the market. The construction pipeline is declining, which means the market is working through the current supply wave and entering a period where new inventory will be more limited.
For a deeper look at how Eastside tech sector demand is shaping the rental market heading into 2026 and beyond, read our Eastside Seattle rentals and tech RTO analysis, which covers how Microsoft’s return-to-office mandate and OpenAI’s Bellevue campus opening are driving rental demand in Redmond, Bellevue, and Kirkland.
Thinking about how 2026’s legislative changes affect your rental strategy?
SJA Property Management tracks both the regulatory environment and the Eastside rental market for our owner-clients across Seattle, Bellevue, Redmond, Kirkland, and Sammamish. Whether you are managing an existing portfolio or evaluating a new investment, our team can help you think through the implications.
Talk to SJA’s local team about your 2026 rental strategy, free consultation
One Reminder: Supply Bills Come Alongside Compliance Bills
The same 2026 session that passed these supply bills also passed significant compliance changes. HB 2664 removes the certified mail requirement for eviction notices, effective June 11. SB 6237 adds a flood risk disclosure requirement to all new leases signed after December 31, 2026. Both of those changes require action before their respective deadlines.
The legislative environment in Washington is not one-directional. Sessions that pass supply bills also pass tenant protection bills. The 2026 session is a clear example. Investors who stay ahead of the full regulatory picture are in a materially better position than those who react to changes after the fact.
For the complete compliance picture, see our Washington 2026 Rental Law and Compliance Guide, which covers the full set of changes affecting landlords this year. Follow the SJA Seattle property management blog for ongoing updates as new laws take effect.
SJA Property Management: Managing Complexity So You Can Focus on Return
SJA Property Management has managed rental properties for over 1,000 homeowners across Bellevue, Redmond, Kirkland, Seattle, Sammamish, and Bothell for 17 years. We track legislative changes, update our processes before effective dates, price properties to current market data, and manage the day-to-day operational complexity so our owners can focus on the investment side of ownership.
Our full-service property management includes lease preparation, tenant screening, notice service, maintenance coordination, and full compliance with Washington State and Seattle local law. Our transparent pricing structure has no hidden fees, no setup charges, and no cancellation penalties. Our 8 written client guarantees back everything we do. 800 or more five-star reviews reflect what 17 years of professional management looks like in practice.
Washington’s market fundamentals are strong. Your management process should be too.
Start with a free rental estimate for your property. No obligation, no setup fees. SJA serves Seattle, Bellevue, Redmond, Kirkland, Sammamish, Bothell, and the broader Puget Sound.
Disclaimer: This article is intended for informational purposes only and does not constitute investment, legal, or financial advice. Bill information is current as of April 2026. Market data reflects publicly available reports from Q4 2025 and early 2026. Consult a qualified attorney, financial advisor, or real estate professional before making investment decisions.
