Washington state Gov. Bob Ferguson signed Senate Bill 5167—the state's operating budget for the 2025-2027 biennium—into law on May 20. One of the most significant concerns surrounding the bill is the potential increase in property taxes and other housing-related levies.

While the bill aims to allocate funding for housing initiatives, infrastructure, and affordability programs, those investments often come with broad implications for housing markets, affordability, and the financial stability of homeowners across the state. 

The effects of the budget on homeownership can be categorized into three main areas: affordability, accessibility, and financial assistance. 

Affordability

One of the most pressing concerns for Washington residents is the rising cost of homeownership. The new budget allocates funding to programs aimed at increasing housing affordability. Such measures include investments in affordable housing developments, incentives for first-time homebuyers, and subsidies for low-income families seeking homeownership opportunities. By directing resources toward those initiatives, the bill aims to mitigate the financial burden on prospective homeowners.

Additionally, the bill supports efforts to stabilize property taxes, ensuring that homeowners aren't disproportionately affected by rising costs. That's particularly beneficial for long-term homeowners who may struggle with increasing tax rates. 

Accessibility

Washington’s housing market has faced challenges related to inventory shortages and accessibility. The new budget includes provisions to expand housing availability by funding new construction projects and incentivizing developers to build affordable units. By increasing the supply of homes, the bill seeks to create a more balanced market where buyers have greater options. 

Furthermore, the bill supports zoning reforms that encourage diverse housing types, including multifamily units and accessory dwelling units. Those measures aim to provide more flexible housing solutions, catering to different income levels and family structures. 

Financial assistance

For existing homeowners, the new budget introduces financial-assistance programs designed to provide relief in times of economic uncertainty. That includes mortgage-assistance grants, foreclosure-prevention initiatives, and funding for home-repair programs. These efforts are crucial in maintaining homeownership stability, ensuring that families can remain in their homes despite financial hardships. 

Additionally, the bill enhances support for first-time homebuyers through down-payment assistance programs and favorable loan terms. Such measures are expected to make homeownership more attainable for individuals who may otherwise struggle to enter the market. 

While SB 5167 presents numerous benefits, there are also challenges to consider.

One of the most significant concerns surrounding SB 5167 is the potential increase in property taxes and other housing-related levies. While the bill aims to allocate funding for housing initiatives, infrastructure, and affordability programs, those investments often come with tax adjustments that directly impact homeowners. 

Washington homeowners are already facing increasing property tax rates due to rising home values and local tax levies. The budget introduces additional funding mechanisms that could further elevate such costs. 

Higher property taxes mean:

• Increased monthly mortgage payments for homeowners with escrowed tax accounts.
• Greater financial strain on fixed-income homeowners, particularly retirees.
• Potential deterrents for first-time buyers who must factor in long-term tax obligations. 

For many homeowners, property taxes represent a significant portion of their housing expenses. If these taxes continue to rise, affordability will decline, making it harder for middle-income families to maintain homeownership. 

Housing costs

The bill also includes provisions that could increase development fees for builders. While those fees are intended to support infrastructure and community services, they often translate into higher home prices. Builders pass these costs onto buyers, making new construction less attainable for many Washington residents.

The effectiveness of affordability measures depends on proper implementation and oversight. Ensuring that funds are allocated efficiently and reach the intended beneficiaries will be key to the bill’s success. 

We already know that housing attainability continues to be a primary concern for Spokane County residents. The Building Industry Association of Washington recently released their 2025 Housing Attainability Report, highlighting key affordability challenges in Washington state.

Some notable findings include:

• Homeownership is unaffordable for 64% of families in Spokane County, due to high median home prices and income disparities.
• In Spokane, the average home price is $405,069 while the average household income is $98,100.
• The required income to afford a home in Spokane is $126,423.
• Property tax increases and rising construction costs are major contributors to affordability issues. Many families spend over 30% of their income on housing expenses. 

These findings underscore the growing gap between wages and housing costs, reinforcing concerns that the new budget's tax implications could further strain affordability.

The budget aims to improve housing accessibility and affordability. However, its tax implications could pose challenges for homeowners. Rising property taxes, increased development fees, and affordability concerns highlighted in the BIAW report suggest that careful implementation and oversight will be necessary to balance these effects. 

As the bill’s provisions take effect, it will be essential for policymakers, industry professionals, and community leaders to collaborate in ensuring its success. With thoughtful implementation, the budget has the potential to make homeownership more attainable and secure for Washington residents.

Karene Loman is a Realtor at Soar Homes and president of the 2,500 member Spokane Realtors association. She can be reached at 509.990.2525 or at [email protected].