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FWCP Chap 05 Housing_201302271050543111CHAPTER FIVE - HOUSING 5.0 INTRODUCTION This Federal Way Comprehensive Plan (FWCP) Housing chapter, together with the Land Use chapter, is perhaps the most personal components of the comprehensive plan. Their policies affect the immediate environment in which residents live and raise their families. The primary goal of the Housing chapter is to create high quality neighborhoods that meet Federal Way's current and future housing needs for all economic groups and household types. It does this by preserving existing neighborhood character while also encouraging the development of a wide range of housing types. The Land Use chapter determines the location and densities of that new housing. The availability of diverse housing choices and affordable housing for all income groups is essential to a stable, healthy, and thriving community. Most housing is not built by cities, but by the private sector. However, cities and other entities, such as lending institutions, do impact the supply and affordability of housing. This chapter focuses on the housing supply and affordability factors that the City can either control or influence. 5.1 Requirements of the Growth Management Act (GMA) Washington State Growth Management Act The GMA requires cities to, "...encourage the availability of affordable housing to all economic segments of the population and to promote a variety of residential densities and housing types." It also encourages "preservation of existing housing stock." The GMA discourages conversion of undeveloped land, "...into sprawling, low -density developments" (RCW 36.70A.020, 1990 Supp.). The GMA requires that the Housing chapter include: • An inventory and analysis of existing and projected housing needs. A statement of goals and policies for housing preservation, improvement, and development. • Identification of sufficient land area for the number of needed housing units, including government assisted housing, housing for low income families, mobile/manufactured housing, multiple family housing, and special needs housing. This defines the amount of land that the City must designate for housing in the Land Use chapter. FWCC — Chapter Five, Housing A strategy and policy for meeting the housing needs of all economic segments of the community. • Encouragement for innovative land use management techniques to enhance affordable housing opportunities, including density bonuses, cluster housing, planned unit developments, and transfer of development rights. Countywide Policies The Countywide Planning Policies (CWPPs), required by GMA, both confirm and supplement the GMA. The CWPPs for affordable housing promote a "rational and equitable" distribution of affordable housing. They require that jurisdictions do the following regarding housing: • Provide for a diversity of housing types to meet a variety of needs and plan for housing opportunities for all economic segments of the population. • Consider the need for proximity to lower wage employment, access to transportation and human services, and the adequacy of infrastructure to support housing development when planning for housing affordable to low and moderate -income households. • Develop strategies to preserve existing low-income housing and provide relocation assistance to households that may be displaced due to public action, where feasible. • Evaluate existing subsidized and low cost housing resources and identify such housing that may be lost due to redevelopment, deteriorating housing conditions, public policies or actions. • Participate in cooperative, countywide efforts to address current low income housing needs. The policies also establish numerical housing targets that each city should accommodate as well as specific targets for housing affordable to households earning less than 80 percent of the county's median family income. The numerical housing target for Federal Way is discussed in the Future Housing Growth section of this chapter. The overall targets for low and moderate -income housing are described below. • Seventeen percent of new housing units should be affordable to households between 50 and 80 percent of median income. • Twenty percent of new housing units should be affordable to households below 50 percent of median income. (Jurisdictions that had relatively less existing affordable housing were required to have 24 percent of new housing be affordable to this income group.) Revised 2005 V-2 FWCC — Chapter Five, Housing The CWPPs also suggest local actions to encourage development of affordable housing. These may include, but are not limited to, providing sufficient land zoned for higher housing densities, revision of development standards and permitting procedures, reviewing codes for redundancies and inconsistencies, and providing opportunities for a range of housing types. 5.2 FEDERAL WAY AND ITS HOUSING Federal Way, like most communities, has residents with a range of incomes, ages, and household types. The size and type of housing needed by Federal Way residents have been changing due to a number of factors, such as the influx of new immigrants, the increasing number of people living alone, the rising number of single -parent households, and increasing life span. Federal Way's housing opportunities must accommodate all of the various types and cost of housing needed by its residents. Household and Population Trends Federal Way's population growth has slowed down since the 1980s when its population doubled. According to the Census, from 1990 to 2000 Federal Way has grown approximately 23 percent. This is greater than King County's growth rate of 15 percent, but less than some of its neighboring cities. Population by Age The age of a city's population is an important indicator of housing need. Different types of housing are needed at various stages of people's lives. Federal Way's citizens are relatively young. Over half of its population is under 35 years of age; almost one-third of this group is under 18 years of age. This statistic reflects a City with many young families and individuals, many of whom may need rental housing as well as first-time homeowner opportunities. It is the residents between the ages of 25 and 35 that represent the majority of potential first-time homeowners. Federal Way must provide entry-level homes for this existing and future population if they are to remain in the community. Typically, first time homebuyer opportunities are in the form of smaller single-family homes, townhouses, and condominiums. Smaller sized ownership units and rental housing are needed not only by this younger population, but by seniors as well. Seniors often desire smaller and more affordable housing, both ownership and rental, in order to minimize or eliminate yard work/ housework and to expend less of their fixed incomes for housing. Of course, these types of housing are also ideal for the growing number of single person households, as well as for many of the rising number of single parent headed household, regardless of age. Revised 2005 V-3 FWCC - Chapter Five, Housing Seniors make up only eight percent of Federal Way residents, less than King County's percentage of ten. However, countywide, both the number of elderly and its proportion of the senior population is expected to increase by 2010 and increase more dramatically by 2025 as the baby boomer generation ages. 25,000 m 0 20,000 a) a 15,000 0 10,000 E 5,000 z Figure V-1 Federal Way's Population by Age 5 and 6-17 18-24 25-35 36-54 55-64 65-74 75-84 85 under and older Age Source: 2000 Census Household Income Understanding the distribution of Federal Way's household income is also critical in planning for its future housing needs. A household's income dictates its housing decisions and opportunities. The King County Benchmark Program defines income groups as follows: Very Low Income: 0 - 30% of county median income Low Income: 31-50% of county median income Moderate Income: 51-80% of county median income Middle Income: 81-120% of county median income Upper Income: 120% or more -of county median income According to the 2000 Census, Federal Way's median household income was $49,278, which is less than King County's median of $53,157, but more than the South King County cities" median income of $45,850. Federal Way's income groups are distributed in approximately a 60:40 split, with 60 percent of residents with middle and greater incomes and 40 percent with moderate and lesser incomes. 1 The South King County cities used in this comparison are Auburn, Burien, Des Moines, Kent, Federal Way, Normandy Park, Renton, SeaTac, and Tukwila. Revised 2005 V4 FWCC — Chapter Five, Housing Figure V-2 Households By Income Level Very Low Middle and Upper 11 % Low 58% 12% Moderate 19% Source: 2000 Census Household Size Federal Way has the largest average household size in South King County at 2.63. It is well above the King County average of 2.39 per household. However, as for most cities, Federal Way consists predominately of one and two person households, as the figure below shows. Three reasons for Federal Way's relatively large average household size is its large percentage (67.6 percent) of families, its relatively high number of immigrants (who tend to have large families), and the overcrowding of its housing due to affordability and availability issues. Figure V- 3 Distribution of Households by Size in Federal Way, 2000 4 People 15% 3 People 17% 5+ People Source: 2000 Census ' Person 25% 2 People 32% Overcrowding According to the 2000 Census, almost eight percent of Federal Way's housing is overcrowded. Overcrowding, defined by HUD as having more than one person per room in a housing unit, is more of a problem in Federal Way than in King County or on average in South King County, although the South King County cities of Kent, SeaTac, Revised 2005 V-5 FWCC — Chapter Five, Housing and Tukwila have a worse problem with overcrowding. Overcrowding typically results when households have to "double up" in order to afford the cost of housing, or from large families not being able to find an appropriately sized unit. Special Needs Populations There are many people in Federal Way who need housing that is directly linked to supportive services and/or is designed to accommodate physical disabilities. The private market, for the most part, does not meet the housing and service needs of these groups, especially if they are low-income. However, the need is independent of a person's income; it is experienced due to a crisis or disabling condition. Although most who are disabled on a permanent basis, due to the limitations of their disability, usually become very low-income. Special needs populations and their needs are diverse. Some groups require special needs housing for a limited time and others on a permanent basis. Two examples of housing needed on a permanent basis are group homes by some developmentally disabled adults and apartments with supportive services for the chronically mentally ill. The type of housing that is needed on a temporary basis includes confidential shelters and transitional housing for victims of domestic violence, supportive housing for pregnant teens, and emergency shelters and transitional housing for the homeless. Special needs populations require two major ingredients to ensure a stable housing situation: very low cost housing and supportive services. The type and number of supportive services required varies by population and by individuals within each population. Jurisdictions can help encourage an adequate supply of special needs housing by ensuring that its codes and regulations are not barriers to the provision of special needs housing throughout the City. Employment Federal Way is more a source for workers than a place to work, according to the Puget Sound Regional Council's (PSRC) Location of Jobs and People in Central Puget Sound, 1999. There are 30,012 jobs in Federal Way, according to another PSRC study, Covered Employment Estimates for 2002. This is not enough to employ Federal Way's approximately 60,000 potential workers aged 18 or older. This low ratio of people to jobs is why Federal Way is considered a bedroom community. Approximately 70 percent of those 30,012 jobs were in the retail and service sector. Jobs in government and education accounted for the next highest percentage with almost 13 percent. Federal Way's proportion of retail jobs is twice the regional average. Jobs in retail sales and service employment typically pay low wages and as a result, these workers have difficulty finding housing they can afford despite working full time jobs. Accordingly, there may be an imbalance between jobs available in Federal Way and the earnings needed to afford local housing. Ironically, this may result in employees working in the City commuting from other communities where cheaper housing is available and higher wage earners who live in Federal Way commuting to other cities for higher paying jobs. Revised 2005 V-6 FWCC — Chapter Five, Housing Housing Stock and its Condition According to the April 1, 2004, Washington State Office of Financial Management (OFM) estimates there are 33,249 housing units in Federal Way. Of this total, 18,377 are single family, 13,635 are multi -family, 1,219 are mobile homes or trailers, and 18 are special housing. The majority of Federal Way's housing is fairly homogenous. The housing primarily consists of single-family detached units, constructed in the sixties and eighties. According to the 2000 Census, almost 11 percent of those single-family homes are rentals, a lower percentage than the county's approximately 13 percent. There are some mobile home parks and a few duplexes located in the City. The rest of the housing stock tends to be two and three story apartment buildings. Although, the number of structures with 20 or more units has been increasing as a proportion of all housing in the last several years. (The composition of this housing is illustrated in the figure below.) Federal Way's housing provides only a narrow range of choices and does not fully reflect the range of housing options that could be built. Figure V-4 Federal Way's Housing Stock Mobile Homes 4% Multifamily 41% Single Family 55% Source: Washington State Office of Financial Management, April 2004 This lack of housing choice creates a situation where an increasing number of families find it difficult to obtain suitable housing in the community. It affects empty nesters and couples that have raised their families and who for life-style reasons, no longer need or want a large single-family house and the associated maintenance. Young adults, students, young married couples, and low-income workers would like to live in the community where they grew up or currently work, but often cannot find a house that fits their housing needs or cannot afford the available housing. Subsidized Housing Included in Federal Way's 33,249 housing units, is a limited amount of subsidized housing. In 2004, there were 443 King County Housing Authority (KCHA) Public Housing units and approximately 800 subsidized units owned by private non-profit agencies and reserved mostly for the elderly, physically disabled, or those with other special housing needs. In addition, as of February 2004, 1,141 households were renting in Revised 2005 V-7 FWCC — Chapter Five, Housing Federal Way using KCHA Section 8 vouchers. A household with a Section 8 voucher can live anywhere in the county. The tenant pays 30 to 40 percent of their income toward the rent and HUD pays the remainder —up to a certain limit. Tenants are encouraged to pay no more than 30 percent of their income, but are permitted to pay up to 40 percent if necessary to obtain suitable housing. The demand for both subsidized housing and vouchers far out strips supply. For example, in February 2003, 364 Federal Way residents were on the waiting list for public housing; households are typically on the waiting list for 1 %2 to 2 years. In addition, 420 Federal Way residents were on the waiting list for Section 8 vouchers- however, the Section 8 waiting list is closed to new households and it is not expected to open for the foreseeable future. Housing Condition For the most part, the housing stock in Federal Way is in good condition. The City has very little concentration of substandard housing, which is typically found in older urban areas. However, houses in poor condition do exist in isolated cases around the City and in small pockets. The King County Assessor's Office provides information related to housing construction quality, which is a good indicator of housing condition. The Assessor's data indicates an overall housing stock of average to better quality. There are a few areas, however, where clusters of buildings have lower quality rankings. Two such areas of note are the Westway and Lake Grove neighborhoods. The City is aware of the housing condition in these areas. In Westway, the City and a group of interested housing and social service agencies are working with the community to identify approaches to improve the neighborhood. The goal is to create a model for neighborhood involvement and planning that could be replicated in other neighborhoods. Preventing existing affordable housing stock from deteriorating is a key to retaining existing affordable housing. Housing Cost and Affordability The term "affordable" is not dollar -specific; it is used in a relative sense. In the case of housing, "affordable" typically is defined as housing costs that total no more than 30 percent of a household's gross income. That affordable dollar amount, of course, changes depending upon the income level of each household. The following table shows the annual income, affordable monthly housing cost, and affordable home price, by household size, for each income group. Unfortunately, housing costs often take a bigger bite out a household's income than the recommended 30 percent. For higher income households, this still leaves enough money to pay for other necessities and perhaps some luxuries. It is lower income households that are negatively impacted if they are unable to find affordable housing. According to the 2000 Census, in Federal Way almost three-quarters of households earning 50 percent or less of median family income spend over 30 percent of their income on housing; almost 40 percent of those households spend over half of their income on housing. Table V-4 provides more information on residents overpaying for their housing in Federal Way. Revised 2005 V-8 FWCC - Chapter Five, Housing Table V-1 2004 Income Levels and Affordable Housing Costs by Household Size Affordable Monthly Housing Cost equals 30% of the household's income. In the case of homeownership, the cost includes principal, interest, and property taxes. The Affordable Home Price assumes a 5% down payment on a 30 year mortgage at a 6% interest rate. Percent of One Person i Person Three Personi IncomeMedian Annual Income $ 16,350 $ 18,700 $ 21,050 $ 23,350 30% Affordable Monthly $ 410 $ 468 $ 525 $ 585 Housing Cost Affordable Home Price $ 72,000 $ 86,700 $ 97,300 $ 108,500 Annual Income $ 27,250 $ 31,150 $ 35,050 $ 38,950 50% Affordable Monthly $ 683 $ 780 $ 878 $ 975 Housing Cost Affordable Home Price $ 119,800 $ 136,900 $ 154,100 $ 171,200 Annual Income $ 43,600 $ 49,850 $ 56,100 $ 62,300 80% Affordable Monthly $ 1,090 $ 1,245 $ 1,403 $ 1,558 Housing Cost Affordable Home Price $ 191,400 $ 218,600 $ 246,200 $ 273,500 Annual Income $ 54,500 $ 62,300 $ 70,100 $ 77,900 Affordable Monthly $ 1,363 $ 1,558 $ 1,753 $ 1,948 100% Housing Cost Affordable Home Price $ 239,200 $ 273,500 $ 307,700 $ 341,900 Annual Income $ 65,400 $ 74,750 $ 84,100 $ 93,500 120% Affordable Monthly $ 1,635 $ 1,870 $ 2,103 $ 2,338 Housing Cost Affordable Home Price $ 287,100 $ 328,300 $ 369,100 $ 410,400 Ownership Housing The cost of ownership housing in Federal Way, like other places in King County, has been increasing. In Federal Way, the average price of a single-family home in 2003 was $233,980, an increase of 24 percent since 1999, and the average price of a condominium increased by 37 percent to $120,958. Revised 2005 V-9 FWCC — Chapter Five, Housing Table V-2 2003 Housing Sales Prices in Federal Way Vice 2003 Change Since 1999 Average Single -Family Price $233,980 24% Average New Single -Family Price $286,247 17% Average Condominium Price $120,958 37% Source: Northwest Multiple Listing Affordability of Ownership Housing Compared to some other parts of the county, Federal Way's ownership housing is relatively affordable. For instance, in 2003, the average price of a home in King County was $352,956, approximately $120,000 more than in Federal Way. As the table below shows, in 2003, the average priced single-family house was affordable to households over 80 percent of median income, while a three or four person household below 50 percent of median could afford an average priced condominium in Federal Way. Table V-3 Affordability of Home Purchase in Federal Way, 2003 Income Requi ed for Income Required Average -Priced Single Average -Priced New I Average -Priced Family Home Sin le Family Home Condominium 1 Person 100% Median 120% Median Just Over 50% Household Median 2 Person 100% Median Over 100% Median Less Than 50% Median Household 3 Person 80% Median Over 80% Median Less Than 50% Median Household 4 Person Less Than 80% Median Over 80% Median Less Than 50% Median Household Rental Housing The Dupre + Scott Apartment Reports track rents by the size of the building: 1 to 19 unit buildings and 20 or more unit buildings. The vast majority of rental buildings in Federal Way are less than 20 units. Therefore, this section will examine rents for these smaller rental buildings. It makes a difference since average rents vary based upon the size of the building. Rent in buildings with 1 to19 units have less expensive one -bedroom units (by $87 a month) but more expensive larger units (from $87 to $387 more a month). This Revised 2005 V-10 FWCC — Chapter Five, Housing could be because so many of Federal Way's single-family homes are rentals and single- family houses are the most expensive rental type. Rents in buildings with 1 to 19 units average $586 for a one bedroom, $818 for a two bedroom, $1,207 for a three bedroom, and $1,426 for a four bedroom. Affordability of Rental Housing The following table, derived from the 2000 Census State of the Cities data tables, provides some valuable information, but can easily result in erroneous assumptions. For instance, it makes it appear that there are not enough rentals for households over 80 percent of median income. However, the 850 units cited as affordable are just those relatively few rentals that are expensive enough to equal 30 percent of these higher households' incomes. All the rentals affordable to lower income households are, of course, affordable to these higher income households as well. The Census further informs us that only about 50 percent of the housing affordable to each income group is actually occupied by that income group. This demonstrates that other income groups are renting units with rents that either equal much less or much more than 30 percent of household income. Table V-4 Quantity and Affordability of Federal Way's Rental Housing for Each Income Group Source: 2000 Census Note: The percent overpaying are the percent of households paying more than 30% of household income on housing. Table V-4 also illustrates the need for housing for households earning 30 percent or less of median income. For instance, by comparing the number of renter households earning 30 percent or less of median income with the number of rental units affordable to this income group, we find that there is 1,803 fewer affordable housing units than needed for this income group. This is further illustrated in the last column of the table, which shows that almost 80 percent of these households pay more than 30 percent of their income for rent. In addition, a significant portion of the few housing units that are affordable to these very -low income households were built before 1970, implying that fewer are being built more recently. Revised 2005 V-11 FWCC — Chapter Five, Housing Federal Way's rental housing, as with the rental housing throughout the county, is generally affordable to households in the 50 to 60 percent of median income range and above. As Table V-5 shows, it is the households at 40 percent of median income and below that have the most difficulty in finding affordable rentals; although, larger households at 50 percent of median income also lack for affordable rental housing. For example, a three -person household earning 30 percent of median income pays $292 more than they can afford for a two -bedroom apartment in Federal Way. The figure also demonstrates why overcrowding may be so prevalent in Federal Way. Low-income households can only afford rentals with three or more bedrooms by doubling or tripling up with other households. Table V-5 Affordability of Federal Way's 2004 Average Rents 1 BR $586 ($178) ($41) $95 $232 $325 (1 person) 1 BR $586 ($119) $37 $192 $349 $372 (2 people) 2 BR $818 ($351) ($195) ($40) $117 $372 (2 people) 2 BR $818 ($292) ($117) $58 $234 $418 (3 people) 3 BR $1,207 ($624) ($428) ($234) ($39) $465 (4 people) 3 BR $1,207 ($576) ($366) ($156) $55 $502 (5 people) 4 BR $1,426 ($701) ($460) ($219) $23 $576 (7 people) 4 BR $1,426 ($655) ($398) ($141) $116 $613 (8 people) Source: Dupre + Scott 1-19 Apartment Report, Betsy Czark & Associates In conclusion, it appears that the rental market is providing affordable rentals to households above 50 percent of median and ownership of single-family housing for households above 80 percent of median, and ownership condominium for those at approximately 50 percent of median. Therefore, all the City's affordable housing Revised 2005 V-12 FWCC — Chapter Five, Housing programs, current and proposed, (e.g., density bonuses, inclusionary zoning, impact fee waivers, federal Community Development Block Grant JCDBGJ funding, etc.) should target these income groups not otherwise being provided with affordable housing by the private market. Future Housing Growth The purpose of the GMA is to assist every city in responsibly planning for growth. Growth will occur. We can either scramble to accommodate this growth or plan for it. Left alone, the housing market will build housing in the easiest and most profitable manner to meet the housing demand. Unfortunately, unless guided by good policy, zoning, development regulations, and incentives, this market -driven response usually does not supply the diversity of housing choices and prices that result in a healthy and attractive community. Housing Targets During their September 25, 2002 meeting, the GMPC adopted a motion to update the targets for new households and jobs for the period, 2001 — 2022. These targets were based on a methodology developed over a two-year period by the King County Planning Directors. The adopted 2001 — 2022 housing target for Federal Way is 6,188 new residential units. Of that 6,188-unit target, per the CWPPs, 20 percent (1,238 units) should be affordable to households at or below 50 percent of median, and 17 percent (1,052 units) should be affordable to households between 50 and 80 percent of median income. Housing Capacity As is described in the Land Use chapter Federal Way currently has a capacity for 5,538 new residential units, including 3,265 detached single-family homes and up to 2,273 multiple -family units. The capacity for 1,415 of those multifamily units is located in mixed -use development zones. Given the 6,188 housing unit target above, Federal Way, at the time of the target adjustment, had a capacity deficit of 650 housing units. The City will increase its capacity in order to eliminate this deficit in a number of ways. For instance, in order to encourage more residential development, the City will consider a number of changes, including a change to the definition of density for conventional subdivisions. Currently, density is based on minimum lot sizes. The change would base density on gross acreage. This should result in relatively more lots than presently allowed. In addition, the City is focusing its policy and development efforts on the City Center and mixed -use zones to ensure that the projected multifamily housing is built in those areas. For instance, it has adopted a ten-year exemption from property taxes for multi -family development within the City Center. The City is also preparing a Planned Action SEPA for the City Center, which would allow environmental review to occur in advance of development. This is an incentive for developers since it allows development to proceed more quickly. As part of the Planned Action SEPA, the City is considering allowing increased height for structures in the City Center, which would increase potential capacity for new residential dwelling units. Revised 2005 V-13 FWCC — Chapter Five, Housing Meeting the Need for Housing In addition to ensuring the land capacity to accommodate the expected growth in households, the City must do what it can to ensure diverse housing opportunities for all income groups. Although no city can guarantee that the housing built will be affordable to all income groups, cities can encourage and facilitate housing that is more affordable using factors it does control, such as land use regulations. For instance, the City can ensure that it has an adequate amount of land zoned to facilitate the development of affordable housing opportunities, such as smaller lot sizes, townhouses, cottage housing, cluster housing, accessory dwelling units, duplexes, triplexes, small-scale apartments, senior apartments, and single -room -occupancy housing. Zoning and Development Regulations Jurisdictions place the most significant controls on housing development through land use controls and zoning. By a careful evaluation and revision of land use regulations, Federal Way can significantly influence the amount, type, design, and affordability of the housing built in the community. Federal Way, like most urban and suburban jurisdictions, is already "built out"; therefore, the greatest opportunities for expanding the types of housing available are in infill and redevelopment, not new development. The first component of Federal Way's housing strategy is to promote in -fill while protecting the character and quality of its existing single-family residential neighborhoods. For instance, it is possible to increase the number of units in existing single-family neighborhoods without changing the neighborhood character by allowing accessory dwelling units, duplexes, cottage developments, or low -density multifamily structures. The City already allows cluster housing in single-family zones; however, other techniques such as lot averaging may be added to the Federal Way Revised Code (FWRC) to encourage compatible development on difficult sites and near environmentally sensitive areas. Implementation of the City's design guidelines will ensure that in -fill development will be compatible with existing neighborhoods. The second component of the housing strategy is to encourage higher density residential uses in the I-5/Highway 99 corridor, including the City Center. Row houses, townhouses, condominiums, and mid -rise residential buildings are appropriate in these areas given the availability of utilities and other infrastructure, access to public transportation, jobs, shopping, entertainment, and social and human services. This plan anticipates that during the next 20 years, the City Center and the Highway 99 corridor will redevelop and accommodate the majority of the City's new housing units, particularly multifamily housing units. The area will gradually become a denser, mixed use, pedestrian friendly, high amenity, high quality vital part of Federal Way. The third part of the strategy is to ensure that there is sufficient land available for other housing needs such as government assisted housing, manufactured housing, housing for low-income families, and special needs housing, including group homes and foster care facilities. The Land Use chapter and FWRC provide support for these types of housing. A critical issue in providing a sufficient amount of this housing is to remove any regulatory barriers to locating such housing throughout Federal Way. Revised 2005 V-14 FWCC — Chapter Five, Housing Affordable and Special Needs Housing Strategies One way that Federal Way can encourage special needs and affordable housing is by removing regulatory barriers and ensuring an adequate amount of land zoned to facilitate affordable housing, such as smaller lot sizes, townhouses, cottage housing, cluster housing, accessory dwelling units, duplexes, triplexes, small-scale apartments, senior apartments, single -room -occupancy housing, and boarding homes. A critical element that makes housing more affordable is cost-conscious development regulations. Subdivision and development regulations should be modified to ensure that land is used efficiently; that the regulations reflect current safety needs, and that they permit and encourage construction of a broad range of housing types. For instance, structural setbacks and street widths could be modified to facilitate small lot developments, cottage housing, cluster housing, and zero -lot line developments. In addition, since the private housing market mostly targets those earning middle and upper incomes, the City should consider providing extra incentives or requirements for developers to build housing affordable to those with less financial resources. The City already requires rental housing developments of 25 units or more to provide affordable housing units, and it also offers an affordable housing density bonus in the City Center. Other programs it could offer include impact fee waivers, parking requirement reductions, and affordable housing requirements in conjunction with transit -oriented development. One incentive program alone is often not enough to encourage developers to participate. For example, a study by the Growth Management Planning Council (GMPC), Affordable Housing Incentive Program for King County, suggests that, depending upon economic factors, a density bonus program needs to be combined with other incentives in order to be fiscally feasible. If the City provides incentives, cost-conscious development regulations, and allows affordable housing types, the private market is more likely to provide housing affordable to low- and moderate -income households. However, it is impossible for the private housing market to meet the affordable housing needs of very low-income households, which includes many with special needs. For example, a senior or disabled person on Supplemental Security Income has an income of about $570 a month, which is about 13 percent of median income. After food and other essentials, this person does not have much money left to pay for housing. Furthermore, rents that are affordable to this income group cannot cover the basic operating and maintenance cost of the housing. Substantial capital development subsidies, as well as rent subsides, are needed to make new construction affordable to very low-income households. To help meet this need for subsidized housing, Federal Way uses the funds available, such as its federal Community Development Block Grant (CDBG) dollars, to help fund needed housing and support services. Federal Way also works with the King County Consortium, neighboring cities, local, state, and federal funding sources, and service and housing providers to coordinate funding and to develop and implement effective housing policies and programs to meet future housing needs. Revised 2005 V-15 FWCC — Chapter Five, Housing 5.3 KEY HOUSING ISSUES Preserving Neighborhood Character Preserving existing neighborhood is an important community value in Federal Way. One of the reasons the community incorporated was to have more control over maintaining the character of its existing single-family neighborhoods. The FWCP recognizes that neighborhoods are special places and are valuable and important to the quality of life for many citizens. In particular, new development in established neighborhoods must be sensitively designed and constructed. Likewise, new multi -family or mixed use development located along arterials running through or adjacent to existing residential neighborhoods should be designed to minimize adverse impacts to its surroundings. Development Review Time is money to a housing developer. Thus, whatever the City can do to reduce permit - processing time will make housing more affordable. As part of the HB 1724 code revisions, which were enacted in 1995, the City revised the FWRC so that more land use decisions are administrative decisions, thereby avoiding time-consuming public hearings. The City also has in place a preapplication process that allows the developer to meet with City representatives at an early stage in the review process to ensure that the applicant understands City development regulations. Such early meetings allow the City and housing developer to agree on the best method to achieve a code compliant and mutually beneficial site plan prior to spending significant sums on costly design and engineering work. A significant portion of the cost of building housing is the cost of providing the necessary infrastructure. If the City is interested in providing housing that is affordable to very low income citizens, it could, to the extent economically practicable, provide the necessary infrastructure, or possibly subsidize the cost of providing public facilities such as streets, parks, utilities, transit facilities, public amenities, and social services. Federal and state grants, including CDBG funds are available and should be used where appropriate. Citizen Participation Housing policies and development, which results from these policies, impact the environment of Federal Way residents. Therefore, it is essential that citizens are involved both in developing policies, such as those in the FWCP, and in reviewing proposed housing developments. To accomplish this, the City has levels of citizen participation processes. The process used depends upon the scale of the development and its potential to impact Federal Way citizens. Both the public and developers should have a clear understanding of the citizen review process, including the types of issues that are open to discussion and the time frame for the review process. Revised 2005 V-16 FWCC — Chapter Five, Housing Good Design and Diversifying Housing Choice The City's design guidelines will ensure that Federal Way is able to maintain and improve the character and quality of its existing residential areas, while at the same time providing more diverse housing choices for its residents. New housing should be more diverse and designed in a way that contributes to community character and relates well to the existing neighborhood environment. It should reassure residents that they will be able to afford to live close to their jobs, friends, and families. The proposed housing diversity will also help preserve and maintain neighborhoods by ensuring that there are housing opportunities for a healthy mix of ages and incomes. Affordable and Special Needs Housing To be prosperous in the long run, Federal Way must have sufficient housing affordable to its bank tellers, firefighters, teachers, government employees, restaurant workers, sales clerks, and seniors on fixed incomes. Federal Way's goal is both to preserve existing affordable housing and to ensure that there is an adequate amount of special needs housing and housing affordable to its low and moderate -income residents. To this end, the City will eliminate regulatory barriers to special needs and expand opportunities to develop affordable housing. The City will also facilitate a range of affordable housing types throughout the City by revising its zoning and development codes as necessary. The City will also continue to offer density bonuses and other affordable housing programs to encourage private developers to provide affordable housing. In addition, the City will use its federal CDBG dollars and other resources to help fund the development and operation of special needs and affordable housing. Policy Coordination and Regional Participation The GMA and good planning practice require that each chapter of the FWCP be coordinated and consistent with goals and policies set forth in the other chapters. This is especially true of the Housing chapter, particularly as it relates to the Land Use and Transportation chapters. The City also recognizes that most of the housing issues found in Federal Way are common to the County, Seattle, and the other suburban jurisdictions. In order to ensure that it addresses this regional housing need effectively, and to help eliminate duplications of effort, the City should continue to coordinate with the King County Consortium, other relevant regional entities, and other South King County cities when developing policies and funding housing and housing -related services. Revised 2005 V-17 FWCC — Chapter Five, Housing 5.4 HOUSING CHAPTER GOALS AND POLICIES The following section establishes goals and policies for providing, preserving, and improving housing in Federal Way. These goals and policies provide a framework from which to develop implementation strategies and work programs for the community. The purpose of these goals and policies is to provide housing opportunities to all segments of the population. Consistent with GMA, these goals and policies should promote a variety of densities, housing types, and encourage preservation of the City's existing housing stock. Overall Goal Preserve and protect Federal Way's existing high quality residential neighborhoods and promote a variety of opportunities to meet the housing needs of all residents of the community and region. Preserving Neighborhood Character Goal HG1 Preserve and protect the quality of existing residential neighborhoods and require new development to be of a scale and design that is compatible with existing neighborhood character. Policies HP1 High -density housing projects, with the exception of senior housing, will not be permitted in existing single-family residential neighborhoods. More moderate densities such as cottage housing will be considered. HP2 Amend development regulations to accommodate a diverse range of housing forms that are compatible with neighborhood character and create an effective transition between the City Center, business areas, and residential neighborhoods. HP3 Continue to allow accessory housing units within single-family neighborhoods in a way that protects residential character, maintains specific design standards, and complies with all applicable laws. Review accessory housing regulations and, if necessary, revise any regulation that inappropriately limits their development. HP4 Maintain a strong code enforcement program to protect residential areas from illegal land use activities. Revised 2005 V-18 FWCC — Chapter Five, Housing HP5 Subject to funding availability, conduct periodic surveys of housing conditions and fund programs, including housing rehabilitation, to ensure that older neighborhoods are not allowed to deteriorate. HP6 If allowed by applicable law, development inside and outside the City should be required to provide their fair share of onsite and offsite improvements. Community Involvement and Development Review Goal HG2 Involve the community in the development of new housing to a degree that is consistent with the scale of impact on the surrounding neighborhoods. Policies HP7 Continue to encourage public input into development of planning and regulatory documents through a formal public process characterized by broad, thorough, and timely public notice of pending action. HP8 Consider the economic impact of all development regulations on the cost of housing. HP9 Maximize efficiency in the City's development review process and ensure that unnecessary time delays and expenses are eliminated. Continue to provide streamlined permitting processes for development that is consistent with the FWCP and FWRC, and that has no adverse impacts. HP10 Encourage community input, where appropriate, into the development permit process by providing thorough and timely information to the public. HP11 Continue to assist developers with housing proposals at the earliest possible opportunity, including preapplication meetings to produce projects that can be reviewed quickly and maximize their ability to receive permits. Good Design and Diversifying Housing Choice Goal HG3 Develop a Comprehensive Plan and zoning code that provide flexibility to produce innovative housing solutions, do not burden the cost of housing development and maintenance, and diverse the range of housing types available in the City. Revised 2005 V-19 FWCC — Chapter Five, Housing Policies HP12 The FWRC and Land Use chapter of the FWCP will be coordinated to facilitate locating housing affordable to low-income, very low-income and special needs households throughout the City, especially around the City Center and other areas that provide proximity to low wage employment, safe and convenient access to transportation and human services, and adequate infrastructure to support housing development. HP13 Continue to use design guidelines to ensure that new and infill developments have aesthetic appeal and blend into surrounding development. HP14 Establish appropriate minimum densities for each zone and encourage new residential development to achieve maximum allowable density based on gross area to ensure that the City can house the anticipated population growth. HP15 Review zoning, subdivision and development regulations to ensure that they further housing policies and don't create unintended barriers. This is of particular importance for small lot and cottage housing developments. In order to facilitate small lot and cottage housing developments, it is particularly important to revise, as necessary, the subdivision and development regulations that govern their development. HP16 As appropriate, reduce minimum lot sizes to allow construction of smaller, detached single-family houses on smaller lots. HP17 Increase capacity and encourage greater diversity of housing types and costs for both infill and new development through various methods, such as inclusionary zoning, density bonuses, transfer of development rights, cluster housing, cottage housing, garden housing, duplexes, and low to moderate density housing types. HP18 Continue to permit mixed -use residential/commercial development in designated commercial areas throughout the City. Develop incentive programs to ensure an adequate amount of housing is developed in these areas. HP19 Increase the amount of undeveloped open spaces in both infill and new development parcels, by expanding the use of cluster development and allowing housing techniques such as lot averaging, and zero lot line standards. HP20 Establish administrative procedures to permit innovative housing designs and techniques, provided they are of high standard and consistent with the FWCP. HP21 Continue to provide incentives such as density bonuses for multi -family housing, and expand the types of incentives offered to encourage new developments to include affordable housing. HP22 Periodically review and update development regulations to incorporate opportunities for new housing types. Revised 2005 V-20 FWCC — Chapter Five, Housing Housing Affordability Goal HG4 Develop a range of affordable housing opportunities for low-income households consistent with the CWPPs and the needs of the community. Policies HP23 Promote fair housing access to all persons without discrimination. HP24 As estimated by CWPPs, maintain sufficient land supply and adequate -zoning within the City to accommodate 17 percent of the City's projected net household growth for those making 50 to 80 percent of King County's median income and 20 percent making less than 50 percent of median income. HP25 Require a portion of new housing on sites of significant size to be affordable to low-income households at a level not provided otherwise by the private market. Developers should be compensated for providing this affordable housing by increased density or other benefits. HP26 Revise the City's affordable housing density bonus program to provide housing at affordability levels not provided otherwise by the private market. At a minimum, any affordable rental units should be affordable and rented to households below 50 percent of county median income, and ownership units should be affordable and sold to households at or below 80 percent of county median income. HP27 Ensure that any new affordable housing required by the City remains affordable through some tool approved by the City, such as recording a lien on the property. In the case of homeownership projects, the lien can be structured as a deferred second mortgage to the homebuyer, due upon sale if the subsequent buyer does not meet the income eligibility standards. HP28 Coordinate all City affordable housing programs so that a developer can use multiple incentives or programs for a single project. Required affordability levels and duration of affordability should be the same for all programs. HP29 Allow and encourage use of manufactured housing in residential zones, provided it conforms to all applicable federal, state, and local requirements and is compatible with the character of the surrounding neighborhood. HP30 In order to maintain existing affordable housing, the City should continue to allow manufactured home parks in existing locations. However, new manufactured home parks will not be permitted, nor will expansion of existing parks be allowed. Revised 2005 V-21 FWCC — Chapter Five, Housing HP31 Encourage new residential development to achieve maximum allowable density based on gross area. HP32 Explore federal, state, and local resources to assist in financing affordable rental and ownership housing. Encourage expansion of home ownership options through such means as first time home buyer programs, housing cooperatives, lease -purchase ownership, and other housing models. HP33 Consider delaying, deferring, or exempting affordable housing from development fees, concurrency requirements, payment of impact fees, offsite mitigation, and other development expenses that do not compromise environmental protection or public health, safety, and welfare concerns, or constitute a nuisance. HP34 Support tax law amendments that provide relief to owners of affordable and special needs housing. HP35 Identify low-income and very low-income housing resources that may be lost due to redevelopment or deteriorating housing conditions. Develop strategies that seek to preserve this existing housing, and that seek to provide relocation assistance to households that are displaced as a result of any redevelopment. HP36 Annually monitor residential development to determine the total number of new and redeveloped units receiving permits and units constructed, housing types, developed densities, and remaining capacity for residential growth for all income levels and needs. HP37 Integrate and coordinate construction of public infrastructure with private development to minimize housing costs wherever possible or practicable. Special Needs Housing Goal HG5 Develop a range of housing opportunities that meet the requirements of people with special housing needs, including the elderly, mentally ill, victims of domestic abuse, and persons with debilitative conditions or injuries. Policies HP38 Periodically review the FWRC and remove any regulatory barriers to locating special needs housing and emergency and transitional housing throughout the City as required by the federal Fair Housing Act, to avoid over -concentration, and to ensure uniform distribution throughout all residential and mixed -use zones. Revised 2005 V-22 FWCC — Chapter Five, Housing HP39 Modify the FWRC's definition of family in order to simplify and clarify the definition and remove any potential barriers to siting housing for protected classes as defined in the federal Fair Housing Act HP40 Review permit applications for special needs housing in close coordination with service providers and the City's Human Services program. HP41 Assist special needs housing developers, local service organizations and self- help groups to obtain funding and support. HP42 Ensure that access to special needs housing is provided without discrimination. Goal HG6 Develop emergency shelter and transitional housing facilities for the homeless. Policies HP43 Coordinate City actions related to homelessness with the City's Human Services Program and non-profit housing and human services providers. HP44 Clarify the City's Social Services Transitional Housing (SSTH) definition and regulations and make necessary changes to result in adequate opportunities to develop transitional housing in Federal Way. HP45 Emergency shelters and transitional housing should be permitted and regulated to ensure there are adequate opportunities to locate them throughout the City, to avoid over -concentration of facilities, to ensure that such housing is properly managed, and to avoid or mitigate significant impacts on existing residential neighborhoods or other surrounding uses. Regional Participation Goal HG8 Coordinate and integrate the City's housing programs with regional housing efforts and with local housing and service providers. Policies HP46 Policies and regulations related to affordable housing should be consistent with CWPPs and multi -county policies. HP47 Establish effective links with King County and other area cities to assess need and create housing opportunities for low-income and special needs households, Revised 2005 V-23 FWCC — Chapter Five, Housing and develop housing programs that address issues common throughout the region. HP48 Subject to availability of funds, participate in the production and periodic update of a housing needs assessment for the City and the region to ensure that policy is based upon a rational evaluation of housing needs and priorities. HP49 Ensure equitable and rational distribution of affordable housing throughout the region that is compatible with land use, transportation, and employment locations. Revised 2005 V-24