HIRST Decision Redux - Practical Considerations for Investors in “Dirt”

By Doug Owens

A couple of months ago I wrote on the Supreme Court’s decision in the Hirst case and noted that the state was then without a capital budget because of the legislative impasse from that decision. I indicated that between then and the 2018 legislative session, people seeking to develop property in counties whose comprehensive plans resemble Whatcom County’s plan could expect that permit reviews would be extended while the counties deal with the Hirst case. One of the benefits of practicing law in a community is the availability of experts who are kind enough to share their knowledge with the rest of us. I came across an article in the King County Bar Bulletin written by such a person, Kate Hambley, that illuminates this topic and I include some of her points in a further message to REAPS members.

Not all counties are equally affected by the Hirst decision. There are no other counties that precisely resemble Whatcom County with respect to the impact of Hirst. Whatcom County had already issued an emergency moratorium on building permits for permit-exempt well projects in October 2016. And the Growth Management Hearings Board set a deadline of November 14, 2017 for Whatcom County to come into compliance with Hirst. So unless a property owner had vested under the pre-moratorium rules in Whatcom County, it is likely that there will be delays and more stringent rules for such owner to develop a permit-exempt residential property.

But counties that are required to plan are only required to revise their Growth Management Act plans and regulations every eight years. The revisions are where the compliance with the Hirst requirement to address water availability for permit-exempt wells would appear. Many of the 29 counties that are required to “fully plan” under the Growth Management Act had already done their updates shortly before the Hirst decision and the property owners in these counties will see no change in the regulations based on Hirst until the next round of updates in 2023 and 2024. These counties are all located in Western Washington and include the REAPS area: King, Pierce, Snohomish, Clallam, Clark, Island, Jefferson, Kitsap, Mason, San Juan, Skagit, Thurston, and Whatcom. Seven other counties including Lewis in Western Washington concluded their eight-year updates in June 2017 without receiving any legal challenge. Only Pacific County in Western Washington still must file its update in June 2018 but developers in that county could vest under the existing rules if they act before the new rules are filed.

The author of the article I refer to indicated that as a legal matter, therefore, development of permit-exempt residential property in counties and areas subject to planning under the Growth Management Act was not halted by the Hirst decision, but it is possible that lenders may be deterred from financing developments in these areas. Such deterrence would be based only on the perception of the effect of the decision and not on the actual effect. In addition, it is possible that legal challenges might be made by neighbors of property owners seeking to develop their land in some of the counties that are described above as having completed their Growth Management Act updates prior to the Hirst decision. Those challenges could extend the time required to receive building permits for residential construction.

The prospects for a 2018 legislative fix, meanwhile, are murky. In addition to the partisan divide in the legislature with environmental groups who support a mitigation approach victorious in the House and rural property owners who support an exemption from the GMA for permit-exempt residential wells winning in the Senate, there is an impasse over the role of the tribes. The state House forces support a veto power over mitigation projects for the tribes while the Senate considers a consultative role for tribes to be sufficient. In addition it is possible that control of the state Senate may have changed in the election that will have been held by the time you read this. It is fair to say that my original article could have indicated that if the current legislative impasse persists past the dates when the counties which are required to plan under the GMA must revise their plans, then property owners in those counties after those dates may face the same conditions as those owners in Whatcom County face as a result of the Hirst decision. The preceding is intended to be educational and should not be considered legal advice.

About the author…

Doug Owens practices real estate law and general business law from his office in Anacortes. He offers a 20% discount for REAPS members and he can be reached at (360) 299-3990 or dougow[email protected].

REAPS is the oldest – and largest - Professional Association for the real estate investor this side of the Mississippi. We provide education and networking resources for real estate investors, those who want to be investors and anyone who provides value to our members. Our goals are to motivate and support our members and guests through education, discussion, legislative action, and networking. We host over 40 live events a year around Puget Sound and they are all open to the public. If you've never attended one of our meetings, just email our office at [email protected] and be our guest for free!"

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