3 - Housing Action Plan Implementation Code Amendmentsco" OF
Federal lay
cenrerrd on Opportunity
HAPI Code Amendments
Income Restricted Affordable Housing
Requirements
Special City Council Meeting June 6, 2023
Presentation by: Keith Niven, Community Development Director
Sarah Bridgford, Community Services Manager
Chaney Skadsen, Senior Planner
Policy Question
Should the City Council approve changes to FWRC
19.110.010 (Affordable Housing) to improve housing
production in the City Center and Community Business
zones?
Proposed Affordable Housing Regulations
FWRC 19.110.010 new projects involving 25 dwelling units or more are
required to provide affordable dwelling units as part of the project.
Requirements:
- At least two dwelling units or five percent
- Shall be affordable (50% AMI for rental, 80% AMI for owner)
- Life of the project
Benefits
- One bonus market rate unit for each affordable unit included in the
project; up to 10 percent above the maximum number of dwelling units
allowed in the underlying zoning district.
Affordable dwelling units required under the provisions of this
subsection in the BC, CC-F., and CC-C zones shall be exempt from
parking space requirements.
Background Information
10/2021 -HAP Adopted
01/2022 -City receives HAPI Grant from Department
of Commerce
02/2023 -Recommendations from Heartland LLC
06/06/2023 - 2nd Reading of Ordinance
06/30/2023 -Grant Required Code Adoption Deadline
HAP Objectives & Strategies
Promote new housing development that expands housing choices and is
inclusive to community needs.
Encourage homeownership opportunities and support equitable housing
outcomes.
Plan for continued growth and ensure that the built environment promotes
community development and increases the quality of life for Federal Way's
existing and future residents.
Preserve existing affordable housing stock to reduce displacement pressure.
#7: Sub -regional affordable
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I Missing middle #2: Mixed use, walkable, #1: Dense, walkable, #5: Mixed income housing
neighborhood centers mixed -use city center
Planning for Housing by 2044
The City has a housing growth target of 11,260 units by 2044. The
breakdown of those housing units by income band is determined by the
Countywide Planning Policies and is outlined in the Table below.
>50-80% >80-100% >100-120%
842 208 981
• • • •
Federal Way Baseline Supply 2019 and
Net New Units
14000
12000
10000
2000 16%
1 8% 7%
0
Non PSH 0- PSH 0-30% >30-50%
30%
0 Total Future Need
48%
9% 10%
2% 11
>50-80% >80-100% >100-120% >120
Baseline Supply 2019 Net New Units
Housing Affordability
Median
Family Income Limit
Income Category
Low (80%) $70 650
ncome Limits
ery Low (50%) $47 950
ncome Limits
xtremely Low
30%) Income $28,800
Limits
Persons in Family I
2 3 4
$80,750 $90,850 $100,900
$54,800 $61,650 $68,500
$32,900 $37,000 $41,100
Seattle -Bellevue, WA HUD Metro Area FY 2023 Income Limits Summary
�' • 779 728 873 1 009
$ 1,13, $ 1,213 $ 1,456 $ 11682
1,81271,942 2,33072,692
2022 Rent Affordable by AMI and Household Size from Washington State Housing Finance Commission
Federal Way Affordable Housing Tools
Affordable Housing
Regulations
Multifamily Tax
Exemption (MFTE)
No — units affordable 50% AMI Rental
for the life of the
project
Yes —12 years of 20%
of units affordable
80% AMI Ownership
At or below 80% AMI
and above 80% AMI
—at or below 115%
AMI
Financial Analysis
What is the cost to developers to provide income restricted units?
Assumptions:
- Market rate rents
- Even proportion of income restricted affordable units
Methodology
- Calculate monthly revenue (all units by market rate rents)
- Calculate monthly revenue of 5% units affordable at 50% AMI
- Calculate impact to monthly revenue
What is the financial benefit to reduced parking requirement?
Assumption
- Price per parking space
Methodology
- Calculate total parking cost (spaces per unit size)
- Calculate parking savings for income restricted units
Scenario 1 (as proposed)
OF233 $ 542,603 12 $ 530,321 $ 12,283
Operational financial impact (income restricted units)
$12,283 month
$147,396 annual L1% [Redudbal
$7.4M 50-year
Upfront financial impact (eliminated parking requirements)
%V2020(soacys)
Scenario 2 (4%)
OF233 $ 542,603 10 $ 532,777
Operational financial impact (income restricted units)
$9,826 month
$117,912 annual R.8% [Redudbal
$5.9M 50- years
Upfront financial impact (eliminated parking requirements)
$981,500
$ 9,826
Alternatives
1. No change to ordinance as proposed (includes a
reduction in parking only)
2. Reduce percentage of affordable units
I Specify tenure is 50 years
4. Combination
5. Allow for a fee in lieu alternative (cannot be
enacted at this time) a
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Mayor's Recommendation
1. Approve the ordinance as currently written