Washington Ends Mandatory Ground-Floor Retail

Nora Whitman

So, picture this. You are walking down a newly built street in a growing neighborhood, and you see block after block of empty storefronts with paper taped over the windows. Behind them is just dusty concrete. And you wonder, why does every new apartment building have to have a boutique pet store or an artisanal bakery on the ground floor that never actually opens? Well, on June 11, 2026, Washington State is officially declaring war on those papered-over windows. This episode of Jellypod AI is looking at a massive shift in how we build our cities. Governor Bob Ferguson signed Senate Bill 6026 into law on March 27, 2026, as Chapter 236 of the 2026 Laws, and it was sponsored by Senator Emily Alvarado. And what it does is target a quiet, incredibly frustrating zoning mandate that has essentially strangled housing development for decades.

Nora Whitman

Let us break down what I call the commercial mandate trap. Historically, cities have loved the idea of mixed use development. It sounds great on paper, right? You put apartments on top and retail on the bottom, and boom, you have a vibrant, walkable neighborhood. But in reality, planners were forcing builders to include ground floor commercial space in places where there was absolutely zero retail demand. Think about it. If you build a five story apartment building on a quiet residential corridor, a coffee shop is not magically going to survive there just because a zoning code says it has to exist. So what happens? The storefront sits vacant for years. And here is the real kicker, the piece that most people miss. Developers and building owners shift the lost revenue onto the residential rents for tenants. That is right, the families living upstairs are literally paying higher monthly rent to subsidize that empty, dark retail space downstairs.

Nora Whitman

It is, um, it is an incredibly inefficient tax on housing. But SB 6026 completely changes the game. For cities in Washington with populations over 30,000, this law legalizes 100 percent residential buildings by right in commercial zones. That means developers can now build pure housing without the regulatory and financial risk of seeking commercial tenants. They can convert empty offices, vacant warehouses, or underutilized commercial sites directly into homes. No ground floor retail required. It is a massive step toward unlocking adaptive reuse, and it removes a major barrier that has kept housing supply artificially low.

Nora Whitman

Now, you might be thinking, surely cities did not just let go of their retail dreams without a fight. And you would be right. To get this bill across the finish line, lawmakers had to strike a delicate balance. The House passed SB 6026 with two final amendments that maintained AWC’s and many engaged cities’ tenuous neutrality. That is the Association of Washington Cities. And their big win was the 40 percent compromise. Under this rule, cities can still choose to preserve ground floor commercial mandates, but only on up to 40 percent of their commercially zoned acreage. And the math here is really specific. Before a city can declare that 40 percent, they first have to subtract any transit station areas, which are completely exempt from these retail mandates. There is also an administrative waiver process for developers who want to build housing in that remaining 40 percent, and cities have an 18 month implementation timeline to get their local codes in line. So, it is a compromise, but one that still opens up the vast majority of commercial land for pure housing.

Nora Whitman

And Washington did not stop there in 2026. They also passed House Bill 2418, which addresses another massive headache for builders, something called regulatory drift. HB 2418 requires cities, towns, and counties planning under the GMA to evaluate residential permit applications using the zoning and land use rules in place at the exact time the complete application is submitted. You would think this was already the rule, but before this, cities could change the zoning rules midstream, after a developer had already spent hundreds of thousands of dollars on architectural plans. This locks the rules in, providing the predictability that builders desperately need.

Nora Whitman

If we look beyond the Pacific Northwest, we are seeing this exact same energy spreading across the country. In Colorado, lawmakers passed House Bill 26 1001. This is a fascinating one. It requires many local governments to allow housing developments on certain nonprofit, school, transit, and public agency owned properties. Think about an underutilized school parking lot or land owned by a church. This bill bypasses local restrictive zoning to let those organizations build housing directly on their land. It is a brilliant way to find free, or at least highly affordable, land for housing.

Nora Whitman

And then over on the East Coast, Massachusetts is showing us what happens when you actually put serious capital behind these ideas. We just got a progress report on their landmark five point one six billion dollar Affordable Homes Act, which was passed last year. And the numbers are impressive. Approximately 44.2 percent of the AHA, which translates to about 2.28 billion dollars, has been budgeted across fiscal years 2025 through 2029. That is nearly half the entire bond successfully moving into the pipeline in just the first year, funding everything from public housing modernization to middle income housing production.

Nora Whitman

What we are seeing in 2026 is a fundamental shift in how policymakers view the housing crisis. They are moving away from just wishing for affordable housing and instead actively dismantling the outdated zoning rules, the vacant retail mandates, and the midstream permit changes that made building housing so expensive in the first place. It is a fascinating moment for urban policy, and we are finally starting to see the foundation for real, sustained housing supply being poured. Alright, that is the briefing for today. Thanks for spending some time with me, and I will talk to you next time.