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Planning Commission PKT 01-18-2017January 18, 2017 6:30 p.m. City of Federal Way PLANNING COMMISSION AGENDA 1. CALL TO ORDER 2. ROLL CALL 3. APPROVAL OF MINUTES December 7, 2016 4. AUDIENCE COMMENT 5. ADMINISTRATIVE REPORT 6. COMMISSION BUSINESS • Elections • Briefing Multi - Family Moratorium 7. ADDITIONAL BUSINESS 8. ADJOURN Commissioners Lawson Bronson, Chair Tom Medhurst, Vice -Chair Hope Elder Wayne Carlson Tim O Neil Sarady Long Diana Noble- Gulliford Anthony Murrietta, Alternate KAPlanning Commission\2017Wgenda 01- 18- 17.doc City Hall Council Chambers City Staff Planning Manager Margaret Clark, Principal Planner E. Tina Piety, Administrative Assistant 253 -835 -2601 www city_,(jederalway.com CITY OF FEDERAL WAY PLANNING COMMISSION December 7, 2016 City Hall 6:30 p.m. City Council Chambers MEETING MINUTES Commissioners present: Tom Medhurst, Hope Elder, Wayne Carlson, Sarady Long, Tim O'Neil, Diana Noble - Gulliford, and Anthony Murrietta. Commissioners absent: Lawson Bronson (excused). City Staff present: Principal Planner Margaret Clark, Senior Planner Dave Van De Weghe, Assistant City Attorney Mark Orthmann, and Administrative Assistant Tina Piety. King County Historic Preservation Program: Historic Preservation Officer Jennifer Meisner and Preservation Architect Todd Scott. CALL TO ORDER Vice -Chair Medhurst called the meeting to order at 6:30 p.m. APPROVAL OF MINUTES The minutes of October 19, 2016, were approved as presented. AUDIENCE COMMENT None ADMINISTRATIVE REPORT Principal Planner Clark stated that the City Council extended multi - family moratorium for six months. Currently, staff intends to bring a public hearing to the Planning Commission on this matter in March 2017. COMMISSION BUSINESS Study Session — Historical Preservation Program Senior Planner Van De Weghe delivered the staff report. He reviewed what was discussed at the last Planning Commission study session on this topic. He also went through the staff responses to questions raised by the Commissioners at the last session, as stated in the staff report. Staff is seeking guidance for changes to the King County ordinance the Commission would like to see. (At the last study session, the Commission indicated they want to enter into an interlocal with King County, but there are changes they want to make to the ordinance.) Historic Preservation Officer Jennifer Meisner and Preservation Architect Todd Scott from the King County Historic Preservation Program also gave a presentation to the Commission. Historic Preservation Officer Meisner gave an overview of the King County Historic Preservation Program. The purpose of the program is to identify, evaluate, protect, and enhance historic properties; and sustain the historic character. According to the King County Comprehensive Plan, "The County shall advocate for and actively market its historic preservation services to agencies and cities that could benefit from such services." This is why the county offers an interlocal agreement (ILA) to county cities to assist with managing a historic preservation program. She noted that they have an archeologist on staff to provide archeological services. She went over the responsibilities under the ILA of the county, city, special commissioner, and ILA staff. Under the ILA, Federal Way would appoint a special commissioner to sit KAPlanning Commission \2016 \Meeting Summery 12 -07- 16.doc Planning Commission Minutes Page 2 December 7, 2016 on the King County's Historical Preservation Committee. The King County Historic Preservation Program Historic offers free training on their services to ILA cities. Preservation Officer Meisner stated that the ILA can vary with each jurisdiction. It is an incentive based program that can provide benefits to homeowners (such as a special valuation tax program). Preservation Architect Scott described the City of Kirkland's program. He went over how they identify historic resources and engage volunteers. He also spoke about their historic residence ordinance and showed some of their landmark properties. He noted that Federal Way could have signage and/or design guidelines in the ILA. One "of the aspects of the ILA will be a survey. King County will work with the city on this survey. It is likely that King County will have some information. They will work with the Federal Way Historic Society and will also use the report completed by the city's consultant, Artifacts, in October 2015. Commissioner Long asked what kind of modifications other ILA cities have requested. Preservation Architect Scott replied that appeal procedures may differ and some require council review and/or approval of designation requests. They have not received any appeals for landmark designations; they have received a few for the requests to make changes to a landmark designated building. King County works with the requester /owner on the application to be sure they understand the process and what is expected of them and what to expect once a decision has been made. Discussion was held about how the tax incentive works. It was noted that an entire neighborhood could be designated as a historic district. Depending on how the ILA is worded (i.e. owner consent is not needed), a property could be declared part of a historic district even if they do not want to be. Vice -Chair Medhurst opened the meeting to public comment. Simone Perry, 33030 38`" Avenue South, Federal Way — If I have a property that does not have a historic designation, is there any protection? — Historic Preservation Officer Meisner responded that property is not protected if it has not been designated a historic landmark. — Ms. Perry commented that she is concerned that historic properties may be lost because they have not been designated. The next step will be for staff to present a draft ordnance and ILA to the Planning Commission for their recommendation. ADDITIONAL BUSINESS Principal Planner Clark announced that Community Development has a new director (Brian Davis). He apologizes that he is unavailable this evening. He will attend the next Planning Commission meeting. Commissioner Carlson asked about the status of the required NPDES permit principles. Principal Planner Clark stated that SW Quality Program Coordinator Mindi English is working on it and the city anticipates meeting its requirements. Vice -Chair Medhurst validated the work of the Planning Commissioner who is also on city staff. There has never been an occasion where the integrity or decision making of this commission has been compromised. The Commissioner brings much knowledge and value. ADJOURN The meeting was adjourned at 7:50 p.m. KAPlanning Commission \2016Weeting Summary 12- 07- 16.doc CITY OF Federal Way PLANNING COMMISSION STAFF REPORT DATE: January 18, 2017 (Revised January 17, 2017) TO: Lawson Bronson, Planning Commission Chair FROM: Brian Davis, Community Development Director Margaret Clark, Principal Planner SUBJECT: Briefing on the Multi - Family Housing Moratorium I. II. III. IV. BACKGROUND The City of Federal Way adopted a six -month moratorium on the expansion or creation of multi- family housing per Ordinance No. 16 -821 on June 7, 2016. The moratorium was renewed for six months on December 6, 2016, and is set to expire on June 6, 2017. MULTI - FAMILY HOUSING IN FEDERAL WAY Multi- family housing is allowed in the Multi- Family Residential (RM) zones as a stand -alone use, and in the Neighborhood Business (BN), Community Business (BC), Commercial Enterprise (CE), City Center -Core (CC -C), and City Center -Frame (CC -F) zones as part of a mixed -use residential/commercial project. The moratorium covers all multi - family and senior housing except for duplexes, triplexes, accessory dwelling units, townhouses, and cottage housing. REASON FOR THE MORATORIUM The reason for the moratorium is to give the City Council time to review the multi - family zoning and development regulations to determine whether such zoning and development regulations are appropriate for the type of multi- family development that the Council envisions for the city. TIMELINE The following is the anticipated timeline for completion of the code amendments: Process Date Check -in with Council January 3`d Planning Commission Briefing January 18`h SEPA Notice to Newspaper February 2nd Issue SEPA Determination February 3rd Council Retreat (Council Briefing) February 4`h 14 -Day Comment Period Ends February 17`h Planning Commission Staff Report January 18, 2017 Briefing on the Multi- Family Housing Moratorium Page 1 of 7 V. VI. Process Date Notice of Planning Commission Public Hearing February 24th 21 -Day Appeal Period Ends March 10`' Planning Commission Public Hearing March 15`h Land Use /Transportation Committee Meeting April 3' City Council 151 Reading May 2nd City Council 2 °d Reading May 16 1h Notice in Newspaper May 18`h Ordinance Effective Moratorium Ends May 23`d June 6`h BRIEFINGS Staff briefed the Planning Commission on the progress to date on the multi - family moratorium on October 5, 2016, at which time 18 potential actions to improve the quality of multi- family development were discussed. The Planning Commission was in favor of all potential actions except for Number 16, which stated, "Require multifamily complexes to provide supportive services (such as mental health counseling, chemical dependency, and substance abuse counseling) and related services, to the tenants of the project, the nature and extent of which shall be determined by the developer /owner in cooperation with the City." Thereafter, on October 18`h, staff made a similar presentation to the City Council. The City Council concurred with the Planning Commission: therefore, staff has removed Number 16 from the list (Exhibit A). At that meeting, the City Council had a number of questions and requested further research. This is summarized in Section VI of this memorandum and responses are given, if available so far. Comments and Questions from the City Council Question #1 — If the proposed 17 changes shown in Exhibit A were adopted, resulting in a higher quality for multi - family development of more than 100 units, would we be able to meet the affordable targets for housing for the low and very low income? Response: The countywide need for housing by percentage of Area Median Income (AMI) is: 50 -80% of AMI (moderate) 30 -50% of AMI (low) 30% and below AMI (very-low) 16 %of total housing supply 12 %of total housing supply 12% of total housing supply Presently, the city's affordable housing inventory is as follows: Income Levels Need Have Rental 51 -80% of AMI (Moderate) 16% of Total Housing Supply 41.3% - 3+--50% - - --- — 6 of Total Housing-Supply— o Planning Commission Staff Report January 18, 2017 Briefing on the Multi- Family Housing Moratorium Page 2 of 7 Income Levels Need Have 30% & below AMI (Very Low) 12% of Total Supply 3.5% Owner - Occupied 51 -80% of AMI (Moderate 16% of Total Housing Supply 24.0% 31 -50% of AMI (Low) 12% of Total Housing Supply 4.2% 30% & below AMI (Very Low) 12% of Total Supply 1.0% If we were to adopt the 17 potential code amendments shown in Exhibit A, the cost to develop would most likely increase, for example, requiring structured parking would add approximately $26,000 per parking space to the cost of development. Many of the other actions, such as #4 through #6, #10, and #11 may result in a decrease in the number of units, thus reducing the profitability of the development. Adopting these actions may result in a higher quality of development; however, the number of units constructed may decrease. Based on the experience of A Regional Coalition for Housing (ARCH), a partnership of the County and East King County Cities, housing for the low and very low income can only be provided with subsidies. Even multi - family units financed with state tax credits do not serve the low and very low income populations. Developments financed with tax credits are affordable to those at 60 percent or less of AMI, which is considered moderate income. Question #2 — Can you explain how the security - related amendments would work? If adopted, would the requirements be retroactive to the existing multi - family? Response: Staff is still researching this item. Question #3 — How are other jurisdictions addressing multi- family development in terms of their regulations? Response: Staff is in the process of researching design guidelines of the following cities': • Auburn ■ Puyallup • Bellevue ■ Redmond • Burien ■ Renton • Des Moines ■ SeaTac • Issaquah ■ Seattle • Kent ■ Tacoma • Kirkland ■ Tukwila Question #4: How do the school district fees compare to other cities around us? Response: As shown in the following table, for all of the surveyed cities with School Impact Fees, except for the City of Federal Way, single family impact fees are greater than those for multi - family. 1 Based upon the deadline for completing the moratorium, we may not be able to review the guidelines of all listed cities. Planning Commission Staff Report January 18, 2017 Briefing on the Multi - Family Housing Moratorium Page 3 of 7 COMPARISON TABLE FOR 2016 SCHOOL IMPACT FEES IN SELECTED CITIES City Population # Housing Units # Single Family Units % Single Family Units Single Family Impact Fee # Multi- Family Units % Multi- Family Units Multi- Family Impact Fee South King County Federal Way 90,760 37,166 20,116 54 $2,899 15,777 43 $9,273 Kent 122,900 46,693 25,935 56 $4,990 18,929 40 $2,163 Renton 98,470 41,285 22,229 54 $5,643 18,075 i 44 $1,385 Burien 48,810 20,153 12,481 62 $7,528 7,663 38 $6,691 East King County Bellevue 135,000 59,041 32,429 55 $4,419 26,605 45 $2,266 Kirkland 83.460 37.765 21,257 56 $9,715 16,422 43 $816 Redmond 59,180 26,141 12,572 48 $9,715 13,229 51 $816 Issaquah 33,330 15,082 7,683 1 51 $4,635 7,398 49 $1,534 Pierce County Puyallup 38,950 17,014 10,053 59 $3,005 6,800 40 $1,585 Question #5: Related to the Fair Housing Act, how perilous would our funding sources be if we adopted these potential code amendments? Or are we more concerned about removing inventory that may be developed as affordable housing; can we be more informed about the impacts? Response: It is difficult to respond to this question. Courts have held that the Fair Housing Act (FHA) may be violated where the effect of a land use or zoning decision discriminates against far .. 1 deprived f .w 'a' T T... A__ aL - UT A 'a *- - t illlilorltles iil �0 1aI as they are uepriveu Gi ii0iisirig OppOl LuniLieS. vilucL uLC i iir%, iL is L1oL necessary to prove that land use officials intended to discriminate against minorities in denying a specific housing project, or otherwise making a land use decision. The U.S. Department of Housing and Urban Development (HUD) has recently adopted the Affirmatively Furthering Fair Housing (AFFH) Rule, which requires the city to prepare an Assessment of Fair Housing (AFH) Plan. The city will be preparing the AFH Plan in conjunction with other jurisdictions. The AFH Plan would identify impediments to providing fair housing and adopt actions to eliminate those impediments. The AFH Plan must be submitted to HUD for review and acceptance and compliance with the AFH Plan will be required in order to receive any funding from any federal agency, or indirectly through the State of Washington; e.g. Community Development Block Grants (CDBG). Question #6: How soon do you think that you will be able to come back with a recommendation? Response: We are hoping to have a recommendation for the February 4`h Council Retreat. Planning Commission Staff Report Briefing on the Multi- Family Housing Moratorium January 18, 2017 Page 4 of 7 Question #7 — Are they addressing housing affordable to the very low income on the eastside by using the ARCH structure? Response: ARCH is a partnership of the King County and East King County cities who have joined together to assist with preserving and increasing the supply of housing for low- and moderate - income households in the region. ARCH assists member governments in developing housing policies, strategies, programs, and development regulations. It also assists people looking for affordable rental and ownership housing. The ARCH Housing Trust Fund was created in 1993 as a way to directly assist the development and preservation of affordable housing in East King County. The trust fund is capitalized by both local general funds and locally controlled, federal CDBG funds. ARCH's member governments have supported a wide range of housing created and operated by local organizations and private developers that serve individuals, families, seniors, homeless, and persons with special needs. Between 1993 and 2011, ARCH member jurisdictions committed over $34 million to this fund, including CDBG and general funds. Also included in this amount is over $7 million in contributions of land, fee - waivers, and other in -kind donations. Funding is made available as loans or grants depending on affordability levels and other fiinding sources. Projects receiving local funds sign covenants ensuring affordability levels are maintained long term. Types of projects include: rental and ownership housing for lower income families; senior housing; homeless and transitional housing; and housing for persons with special needs. ARCH Awards loans and grants to developments that provide below - market rate housing. Since 1993, the ARCH Housing Trust Fund has funded over 2,575 units of East King County housing for families, seniors, and persons with special needs. • Makes surplus public land available for housing. Waives impact and permit fees, e.g., Habitat's Newcastle project received $190,000 of ARCH funding, including over $28,000 in waived permit fees granted by the City of Newcastle. Question #8: Do you have the numbers that show the differences in the income levels in King County? Response: There are no differences in available data between the different parts of King County. Although housing is generally more affordable as you go south, the methodology of measuring affordability is the same. The following table shows the 2016 King County Median Income Levels by Household Size Percent of Area Median Income One Person Household Two Person Household Three Person Household Four Person Household Five Person Household 30% $19,000 $21,700 $24,400 $27,100 $29,300 40% $25,320 $28,920 $32,520 $36,120 $39,040 50% $31,650 $36,150 1 $40,650 $45,150 $48,800 60% $37,980 $43,380 $48,780 $54,180 $58,560 Planning Commission Staff Report January 18, 2017 Briefing on the Multi - Family Housing Moratorium Page 5 of 7 Percent of Area Median Income I One Person Household Two Person Household Three Person Household I Four Person Household Five Person Household 70% $44,310 $50,610 $56,910 $63,240 $68,320 80% $50,640 $57,840 $65,040 $72,240 $78,080 90% $56,970 $65,070 $73,170 $81,270 $87,840 100% $63,300 $72,300 $81,300 $90,300 $97,600 115% $72,795 $83,145 $93,945 $103,845 $112,240 120% $75,960 $86,760 $97,560 $108,360 $117,120 Question #9: Typically, very low income residents may be able to pay monthly rent, but are unable to pay rents for the first and last months as well as a security deposit. Is there anything that anyone is doing in this country or in Canada to give landlords incentives to take away these requirements? Can we offer incentives to landlords to take away the security deposit and last month's rent up- front? Response: A new Seattle law, which goes into effect this month, requires a landlord to allow a tenant to pay the security deposit, fees, and last month's rent over the course of a payment plan. This law will also cap the total amount of security deposits and nonrefundable fees landlords can charee at no more than one month's rent. In addition, nonrefundable fees can't exceed 10 percent of one month's rent unless the cost of the tenant's screening report exceeds that amount. The length of the payment plans will depend on the details of the lease, and the law will allow landlords to skip offering payment plans if they keep the total move -in costs to less than a quarter of the monthly rent. An exception was made for landlords who rent rooms in their single- family homes where they also live. S RENT SECURITY DEPOSIT ETHAN UP TO SIX MONTH I I NON - REFUNDABLE FEES* I AP MOMORS RENT PAYMENT PLAN LAST *Limited to those fees explicitly allowed by State Statues Question #10: Are there specific targets for low income housing? Response: There are no targets in the Fair Housing Act, but there are targets in the Countywide Planning Policies (CWPPs). Please refer to response under Question #1. Planning Commission Staff Report January 18, 2017 Briefing on the Multi - Family Housing Moratorium Page 6 of 7 Question #11: How does the Growth Management Act (GMA) look at the numbers of low income housing in a community versus affordable housing units? Response: Affordable housing is housing that is affordable to a household that earns 80 percent of median income or less. In addition, the occupants must pay no more than 30 percent of their income for rent and utilities, or for mortgage, taxes, and insurance for the housing to be considered affordable. The GMA itself does not quantify how much affordable housing must be provided. It requires the comprehensive plan to identify sufficient land for housing, including but not limited to, government- assisted housing, housing for low- income families, manufactured housing, multi - family housing, group homes, and foster care facilities. It also requires the plan to provide for existing and projected housing needs for all economic segments of the community. The CWPPs establish three tiers of affordable housing— moderate, low, and very low (refer to Question #1). Question #12 -- Are we considering the Section 8 voucher holders or public housing when we look at how we are meeting our affordable housing targets ? Response: There are two types of Section 8 programs: Tenant -based Housing Choice Vouchers, which provides Section 8 subsidies to households (these vouchers stay with the households). It is difficult to include those subsidized units that accept the Tenant -based Housing Choice Vouchers as affordable housing as the owner /landlord may not always accept the voucher; for example there may be a change in ownership. 2. Project -based Vouchers provide rent subsidies to tenants, but stays with the unit. The King County Housing Authority (KCHA) owns and manages nearly all of this type of public housing. The Project -based Housing Choice Vouchers, such as those administered by KCHA, were counted in the affordable housing inventory used in measuring how we are meeting our affordable housing targets. Question #13: Is there a way for the city to require landlords to accept Section 8 Vouchers, since many landlords do not accept them and there are more households with Tenant -based Housing Choice Vouchers than there are housing units that will accept these vouchers? Response: Kirkland, Redmond, Bellevue, Seattle, and most recently Renton have adopted regulations which prohibit a landlord from discriminating against certain types of income sources, like Section 8. This is commonly referred as "Source of Income Discrimination (SOID) Protections." Kent and Tukwila are presently pursuing similar legislation. The Housing Development Consortium Seattle -King County is willing to provide assistance if Federal Way chooses to adopt similar legislation. KA2016 Code AmendmentsWultifamily Code Amendments \Planning Commission Briefings\O 11817 Briefing \Revised Final 011817 Briefing.docx Planning Commission Staff Report January 18, 2017 Briefing on the Multi - Family Housing Moratorium Page 7 of 7 EXHIBIT A Potential Actions to Improve Quality of Multi- Family Development A. Amendments to the FWRC The following code changes would be applied to stacked multi - family with more than 100 units: 1. Require underground parking for multi - family units; except structured parking would be allowed in the CC -C and CC -F zones. 2. Require a certain percentage of commercial on the ground floor of buildings in all zones (CC -C, CC -F, BC, BN, and MF) if located along an arterial or collector and are visible from the right -of -way. This excludes gyms and other uses considered accessory to the multi - family uses. 3. Prohibit the concentration of apartments with a large number of bedrooms by requiring a mix of one, two, three, four, and five bedroom units. 4. Require a certain percentage of a unit to be shared living area, e.g., living and dining rooms. 5. Require a certain percentage of the gross floor area of the apartment building to be common areas for social gathering. 6. Require a certain percentage of the gross floor area of the apartment to be designated as private open space, such as a patio, porch, deck, balcony, yard, or shared entry porches or balconies. 7. Require mandatory participation in garbage, recycling, and composting programs. 8. Require minimum space for solid waste enclosures to accommodate containers for garbage, recyclables, and compostables. 9. Require operational plans for solid waste storage and conveyance, whether interior or exterior, and establish a maximum allowable distance from unit entries to exterior solid waste storage. 10. Minimize bulk of buildings by restricting the number of units in each building. 11. Buildings shall insure maximum compatibility with surrounding land uses and structures. Where the site adjoins single - family residential uses, or single - family residential zones, or less intensive multi - family zones or uses, building heights shall be reduced and side yard setbacks shall be increased. 12. Require each apartment complex to have a Safety Plan, e.g., common areas such as laundry rooms or any room which is not visible from publicly travelled places must have posted hours of operation and be kept secure at other times. 13. Require security cameras in shared areas, e.g., lobby, community rooms, playground. 14. Require a maintenance plan and/or adopt an inspection program to be financed by landlord fees. 15. Require impact fees to offset the need for calls by the police and fire departments. 16. Enforce the parking and critical areas provisions of the FWRC. 17. Come up with a new parking requirement based on number of bedrooms. B. Legislative Approach Lobby the state Housing Finance Commission to adopt a rule which requires a mix of affordable and market rate housing units when tax credits are awarded.