Washington Gov. Bob Ferguson is asking lawmakers to fund $244 million in additional housing investments as part of a budget proposal released Dec. 18.

His plan comes as the state grapples with an ongoing shortage of affordable housing, and after lawmakers have already pumped hundreds of millions of dollars toward the state’s main housing account over the past few years. Some of the funding Ferguson is proposing would go to help people whose homes were damaged in record flooding over the past two weeks.

Almost all of the money would be from the state’s capital budget, which is healthier than the cash-strapped operating budget.

The governor also signed an executive order to get the ball rolling on establishing a new cabinet-level Department of Housing. 

“I’m enormously gratified to stand here today and be able to make the following statement: We have a housing governor,” Lt. Gov. Denny Heck, who has advised Ferguson on housing issues, said during a press conference at an affordable housing complex in south Seattle.

Of that $244 million, $50 million is for housing preservation, including to repair flood-damaged homes, Ferguson said. Another $5 million will go specifically to a grant program to help low-income homeowners with flood-related repairs.  

Ferguson said he would work with lawmakers early in the legislative session that begins next month to open up that money quickly. The governor called the funding a “down payment” as the state determines the scope of the flood damage. It’ll also serve as a bridge as the state works to get disaster aid from the federal government in the aftermath. 

“When you ask for disaster relief, the state is saying we can’t handle the scope of the damage that’s being caused,” Ferguson said. “But we’re working to make sure we do everything we can in the short term to help folks out, to make sure we get support during this really critical time.”

Ferguson’s housing proposals are in response to an estimated million-home shortfall the state faces over the next two decades. It’s estimated that half of those homes need to be affordable to those making less than half of the median income. 

The sum Ferguson is proposing builds upon $760 million in spending on affordable housing that lawmakers authorized in Washington’s construction budget this year. Of that, $605 million is directed to the Housing Trust Fund. That’s up from $527 million shoveled into the fund in the previous two-year budget. 

The details

Most of the additional $244 million Ferguson is calling for would go toward the Housing Trust Fund. 

It includes $81 million to develop nearly 2,000 new affordable housing units, he said. Another $73 million to build over 600 units for first-time homebuyers, and $20 million would go to acquire and preserve mobile and manufactured home communities.

There is also $6 million to speed up development by “modernizing permitting systems.”

The proposed spending would largely come from state bonds. A small amount is included in the operating budget proposal and some money from carbon auction proceeds under the state’s Climate Commitment Act, said Ferguson’s budget director, K.D. Chapman-See. 

“We feel very confident that we have absolutely maximized every dollar that is possibly available in our budget to go to housing,” Ferguson said. 

Ferguson described the funding ask as potentially the biggest housing investment in a supplemental budget in the state’s history. 

Legislators will also look at more policy solutions to get and keep people housed. 

This year, they passed legislation to push more housing development around transit stops, increase condo development, cap residential rent increases, ease parking requirements that serve as an impediment to construction and allow for more lot splitting.

Ferguson is partnering with Sen. Emily Alvarado, D-Seattle, on a housing bill this next session. The legislation would require cities and counties to permit residential and mixed-use development in commercial zones. The Democratic governor said he’ll also be supporting other housing legislation next year.  

“There are tens of thousands of parcels where housing is prohibited and where real barriers exist that make development infeasible,” Alvarado said. “Think about it, vacant strip malls or big box stores that are boarded up or empty parking lots, and now imagine the transformation of those places into homes. What a better future for our communities.” 

Former Gov. Christine Gregoire has been a vocal supporter of the proposed legislation. 

Other housing policy priorities next year include barring jurisdictions from denying permits for permanent supportive housing, transitional housing or indoor emergency housing or shelter in certain residential and commercial zones and limiting corporate homeownership, Alvarado said. 

The state faces new housing challenges this year, as the Trump administration looks to shift federal funding away from permanent supportive housing. Washington and other states are suing over the move. A hearing in the case was set for Dec. 19 in federal court in Rhode Island.

Even with this recent development, housing has always been a top priority for Ferguson as governor, he said. 

“I’m not sure I needed any extra motivation,” he said. 

Ferguson’s executive order on the new Department of Housing creates a task force to develop it. The task force is required to file a report by Nov. 15, 2026, with recommendations for the agency that lawmakers can consider in the 2027 legislative session.

The governor will release his proposals focused on supplemental funding for the transportation and operating budgets before Dec. 23, the statutory deadline. Lawmakers begin their 60-day session Jan. 12 and will consider Ferguson’s plans.

This story is republished from the Washington State Standard, a nonprofit, nonpartisan news outlet that provides original reporting, analysis and commentary on Washington state government and politics.