(The Center Square) – As the Washington legislative session continues discussions around bills to boost the housing supply, building industry advocates are warning that continued raids on an account meant to fund local infrastructure projects can undermine any new legislation.
“Not only is this concerning for anyone looking for a place to call home, but it also means less revenue for state and local governments,” the Master Builders Association of King and Snohomish Counties wrote in a statement to The Center Square.
Created in 1985, the Public Works Assistance Account provides funding for a revolving low-interest loan program for local governments seeking to finance infrastructure projects that can range from roads and bridges to water and sewage connections.
It’s the latter that is critical for housing, Building Industry Association of Washington Vice President of External Affairs Jan Himebaugh told The Center Square.
“The Public Works Assistance Account has long supported infrastructure that is needed for any type of development,” she said. “The system has to exist in order to access it.”
However, starting in the early 2000s, the state Legislature has since chronically diverted funds from the account to cover operating budget expenditures. Although the PWAA has funded more than $3.3 billion worth of local infrastructure projects since its creation, the Legislature has diverted $2.2 billion from the account between 1985 and 2017.
For the 2025-2027 biennium the legislature has diverted $288 million from the PWAA to the general fund, while Gov. Bob Ferguson’s supplemental budget proposal would increase this by $75 million for the 2027 fiscal year.
The long-term impact of these diversions on potential housing is difficult to gauge. Local government advocates have previously told The Center Square that the repeated diversions means cities and counties simply don’t bother applying for funding.
That also means builders don’t bother applying for permits when there’s no sign the parcel will get the connection it needs, Himebaugh said. “There’s so many economic choices a homeowner makes to go through with something, but you don’t know how many people didn’t apply for something….because infrastructure was too far away.”
The lack of available water supply, combined with local building regulations, can make it impossible for builders to get necessary permits. According to a 2024 Urbanist op/ed by licensed engineer Donna Breske, between 2017-2023, over 1,600 Water Availability Certificate applications were denied in the city of Seattle alone due to inadequate access to existing water supply. According to Breske, that prevented approximately 5,000 homes that went unbuilt.
MBAKS wrote in its statement that the PWAA raids has a secondary effect on both local and state revenue generated from various taxes and fees associated with housing construction. According to a recent study by the National Association of Home Builders found that 14,348 single-family and 32,368 multifamily homes built in the state of Washington generated $3.96 billion in tax and other revenue for the state and local governments
“Given the housing shortage in our state, policymakers should be doing everything they can to lower barriers to more homes, not taking steps that could make it harder for cities to meet their housing needs,” the statement said.
The Center Square reached out to current PWAA Chair Maria Jawad requesting an interview to discuss the PWAA fund diversions.
Agency Media Relations Manager Amelia Lamb wrote in an email that “we’re closely watching the Governor’s and Legislature’s plans for the Public Works Board and the assistance account. We’re in the midst of a leadership transition here at Commerce with the Legislative session underway, and we don’t have anything to say at this time.”
