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2021-04-07 Planning Commission PacketCommissioners City Staff Lawson Bronson, Chair Tim O’Neil, Vice-Chair Brian Davis, CD Director Wayne Carlson Hope Elder E. Tina Piety, Administrative Assistant Diana Noble-Gulliford Tom Medhurst 253-835-2601 Dale Couture Eric Olsen, Alternate www.cityoffederalway.com Jae So, Alternate Anna Patrick, Alternate C:\Users\tinap\Desktop\Agenda 04-07-21.docx City of Federal Way PLANNING COMMISSION April 7, 2021, 6:30 p.m. City Hall, Zoom Meeting AGENDA 1. CALL TO ORDER 2. ROLL CALL 3. APPROVAL OF MINUTES a. Planning Commission Meeting of March 17, 2021 4. PUBLIC COMMENT 5. COMMISSION BUSINESS a. Discussion – Housing Action Plan Strategies Briefing b. Discussion – Preliminary Growth Targets Briefing 6. STAFF BUSINESS a. Director’s Report 7. NEXT MEETING a. April 21, 2021, 6:30 p.m. 8. ADJOURNMENT Notice: Pursuant to Governor Inslee’s Proclamation 20-28, all in-person meetings are prohibited until further notice. The Mayor and City Council encourage you use one of the following ways to participate in the meeting: • Join here https://cityoffederalway.zoom.us/j/92039948345?pwd=b3RBOGdQeUw5ZEFQSi8rblhlZ0hRQT09 • Call in and listen to the live meeting (888) 788-0099 or 253-215-8782 • Public Comment may be submitted via email here, or sign up to provide live comments here • Zoom meeting code 920 3994 8345 and passcode 431768 Planning Commission Minutes Page 1 March 17, 2021 CITY OF FEDERAL WAY PLANNING COMMISSION March 17, 2021 City Hall 6:30 p.m. Zoom MEETING MINUTES Commissioners present: Lawson Bronson, Tim O’Neil, Wayne Carlson, Diana Noble-Gulliford, Dale Couture, Tom Medhurst, Eric Olsen, and Anna Patrick. Commissioners absent: Jae So and Hope Elder. City Staff present: CD Director Brian Davis, Senior Planner James Rogers, City Attorney Eric Rhoades, and Administrative Assistant II Tina Piety. Sound Transit Staff: Andrew Austin and Curvie Hawkins. CALL TO ORDER Chair Bronson called the meeting to order at 6:30 P.M. MINUTES The March 3, 2021, minutes were approved as presented. PUBLIC COMMENT None COMMISSION BUSINESS Discussion, Preliminary Sound Transit Briefing – Mr. Austin introduced the briefing and Mr. Hawkins delivered the briefing. Mr. Austin stated that any comments made tonight will not be official Sound Transit comments. To ensure your comments are heard by Sound Transit, please use one of Sound Transit’s official comments channels as shown on PowerPoint Slide 31 and at the end of these minutes. The briefing was on- the Operations & Maintenance Facility (OMF) South Draft Environmental Impact Statement (DEIS) Findings, specifically: • The three site alternatives. • DEIS differentiating & key results. • Public outreach & environmental review timeline. The OMF South is one of four planned in the region (one north between Lynwood and Everett, one east near Bellevue, and one central in Seattle). The OMF will clean and store 144 vehicles and is expected to create over 470 living-wage jobs. Sound Transit started the EIS process in 2014 and expects to produce the Final EIS in mid-2022, with the final site selection in mid to late 2022. The EIS analysis includes the affected environment, impacts, and Planning Commission Minutes Page 2 March 17, 2021 potential mitigation measures and specifically, transportation, the natural environment, and the built environment. The process started with 24 alternative sites, which have been reduced to three (Midway Landfill, Federal Way South 336th Street, and Federal Way South 344th Street). Each alternative site has pros and cons. The Federal Way alternatives will require a mainline track to be built that is considered part of the Tacoma Dome Link Extension (TDLE). The Midway Landfill site is the most “problematic” because of its contaminated soils. The soils will cause any development on the site to sink, leaving Sound Transit with three options:  Platform Option Buildings and tracks will be supported by a 3.5-foot-thick concrete platform (~35 acres) on ~700 drilled shafts at 120 – 180 feet deep.  Hybrid Option A partial excavation with tracks supported by a 1-foot-thick concrete slab over a 3-foot-thick beam system (~30 acres), and buildings supported on ~110 drilled shafts at ~140 feet deep.  Full Excavation Option Complete excavation/replacement with imported soils. Mr. Hawkins gave an overview of the site comparisons and differences. Sound Transit analyzed the sites for residential and business displacements and discovered the South 344th Street site will have the most of both. For estimated employee displacements and community and social resource impacts (mainly to churches), again the South 344th Street site will have the most of both. For wetland, stream, and forest impacts, the South 336th Street site will have the biggest impact on them. The Midway Landfill site will have the longest construction duration, the most daily construction truck trips, and the largest annual operating cost estimate. Also, the Midway Landfill site has the largest conceptual cost estimate. In regards to constructing the mainline track to the Federal Way sites, the South 344th site will have the most residential, business, and employee displacements, as well as the most impacts to wetlands, streams, and forests. Public participation opportunities and notifications include a website, social media, print and online ads, email listserv, property owner briefings, mailers, press releases, open houses, and community listing sessions. The next online public meetings and hearings are scheduled for March 24th and March 30th. Sound Transit is committed to accessibility and translation services. Public comment on the DEIS will be accepted until April 19th. Mr. Austin stated that Sound Transit will create a summary of the DEIS public comments. The comments will be considered in the final preferred alternate decision process. Commissioner O’Neil asked what criteria will be used for the final preferred alternate decision. Mr. Austin replied that the data points as shown in the slides and the DEIS, as well as the public comments, are what will be used. Commissioner Medhurst asked if the estimated construction includes the acquisition of the land? Mr. Hawkins responded that the acquisition cost is included for the two Federal Way sites. It is not included for the Midway Landfill site because Sound Transit expects to lease, not purchase the land. Commissioner Carlson commented that WDFW has adopted new regulations/processes, does the DEIS use these. Mr. Hawkins said he doesn’t know if the DEIS uses them but the Final EIS will use any regulations/ processes adopted since the DEIS was done. Commissioner O'Neil expressed concern that the city may lose tax revenue because of the business displacements. Mr. Hawkins stated that depends on where the businesses choice to relocate. Director Davis asked if Sound Transit staff makes a recommendation of a final preferred alternate. Mr. Austin responded that the Sound Transit staff does not make a recommendation. Chair Bronson asked if construction of the mainline tracks through Federal Way is part of the TDLE why was it part of this presentation? Mr. Hawkins replied it was included to be open and above board about what would need to happen if one of the Federal Way sites is chosen. Planning Commission Minutes Page 3 March 17, 2021 STAFF BUSINESS Director’s Report – Director Davis announced the Housing Action Plan (HAP) draft strategies discussion has been rescheduled to April 7, 2021; there will also be a discussion on growth targets that night. Staff is scheduling a second meeting on the HAP strategies on April 21st and is prepared to hold a third meeting if the Commissioners decide they need a third meeting to fully understand the HAP proposal. He also announced that Keith Niven has been hired as Planning Manager. He will start on March 29th and will attend the April 7th Planning Commission meeting. NEXT MEETING April 7, 2021, 6:30 p.m., Zoom Meeting ADJOURN The meeting adjourned at 7:40 P.M. K:\Planning Commission\2016\Meeting Summary 03-17-21.doc Housing Action Plan: Strategies Briefing Page 1 of 4 COMMUNITY DEVELOPMENT DEPARTMENT 33325 8th Avenue South Federal Way, WA 98003-6325 253-835-7000 www.cityoffederalway.com Jim Ferrell, Mayor MEMORANDUM Date: April 7, 2021 To: Federal Way Planning Commission From: Brian Davis, Director Keith Niven, Planning Manager Chaney Skadsen, Associate Planner Subject: HOUSING ACTION PLAN: STRATEGIES BRIEFING MEETING OBJECTIVE Review the housing objectives and proposed strategies developed for the Federal Way Housing Action Plan (HAP). BACKGROUND On March 2, 2021, the Federal Way HAP team of city staff and consultants presented the housing objectives and high-level strategies to the councilmembers at a City Council Special Session. The purpose of this meeting was to solicit councilmember feedback on a set of preliminary objectives for the HAP that are consistent with requirements outlined by state law and ensure that the project development is on a course consistent with the Council’s direction. HAP EXPECTATION The objective of the city’s HAP document is to lay out comprehensive housing policy direction from which regulatory changes can be implemented. The intent of this plan is that regulatory changes occurring after adoption be towards the goal of increasing residential building capacity in the city. The HAP will include a refined set of actionable strategies and a schedule for implementation that will direct future regulatory amendments, sub area planning, and long-range planning activities. The strategies selected in the HAP will be implemented over time following proper planning protocol and appropriate community engagement and participation resulting code and comprehensive plan amendments. For example, to implement the strategy to Encourage Accessory Dwelling Units would require going through the normal code amendment process, including Planning Commission review and recommendation to the Land Use and Transportation Committee and adoption by ordinance by the City Council. HOUSING OBJECTIVES AND STRATEGIES The housing objectives and strategies were developed using data collected from the Subregional Housing Framework, Housing Needs Assessment for Federal Way, Code and Policy Review, and input received from the Councilmembers, Planning Commissioners, Advisory Group, Visual Preference Survey, and the Public. Housing Action Plan: Strategies Briefing Page 2 of 4 HOUSING NEEDS ASSESSMENT • The rate of new housing production in Federal Way is not keeping pace with demand or comprehensive plan growth targets. One reason is the lack of multifamily housing construction since mid-2017 following a moratorium on multifamily housing permits and an increased impact fee to support the Federal Way School District. There has also been a lack of “missing middle” housing, such as townhomes and multiplex formats. The underproduction of housing is contributing to intense competition for available housing which is driving up housing costs faster than the incomes of residents. • Federal Way needs to add about 6,800 new units before 2040 to accommodate population growth and account for past underproduction. This equates to an average production of 339 additional units each year, a 68 percent increase over recent housing production trends. • The city needs a diversity of new housing types, including both rental and ownership products that cater to a variety of income levels and housing needs. This includes “missing middle” housing types, such as townhomes and condominiums, that can support more affordable homeownership opportunities. • The planned link light rail stations in Federal Way provide an excellent opportunity for the city to encourage new higher-density housing production in a location where residents will have access to jobs and opportunities. • Nearly 40 percent of all households in Federal Way are cost-burdened (over 13,000 households in total). Cost burden is most common among both owner and renter households with incomes below 50 percent of area median income (AMI). Black, indigenous, and persons of color (BIPOC) households disproportionately experience housing cost-burden. HOUSING POLICY AND CODE REVIEW • The goals and policies in Federal Way’s Housing Element are generally supportive of encouraging construction of both affordable and market rate housing in a greater variety of housing types and at prices that are accessible to a greater variety of incomes. • New housing production is limited by code provisions that present regulatory barriers and disproportionate impact fees. • The highest impact opportunities to reducing code barriers include: o Introducing form-based code approaches in place of strict lot-size and density requirements. o Relaxing ground floor commercial requirements in all but critical block frontages to provide more flexibility for single-purpose multifamily residential projects. VISUAL PREFERENCE SURVEY • A strong majority of 226 surveyed Federal Way residents responded positively to images of several housing formats that could be encouraged in the HAP. These include duplexes and triplexes in single-family zones, townhouses in multifamily zones, and apartments or condominiums in commercial and downtown zones. • Survey responses were sensitive to different building designs. Images with the lowest scores included heavily paved areas with no landscaping, garages as a predominate feature, a lack of private entry definition, and monolithic or messy designs. • See the Housing Options Visual Preference Survey Results Summary (enclosed) for additional findings. Housing Action Plan: Strategies Briefing Page 3 of 4 As a result, four housing objectives were established: 1. Promote new housing development that expands housing choices and is inclusive to community needs. 2. Encourage homeownership opportunities and support equitable housing outcomes. 3. 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. 4. Preserve existing affordable housing stock to prevent displacement pressure. The housing strategies below are actions, such as a regulatory policies, tools, and programs that are designed to achieve the housing objectives listed above. There are broad housing needs in Federal Way, spanning across a spectrum of income, housing size, and typology. A single housing strategy will not effectively address the diverse needs and fulfill the goal of all housing objectives. Alternatively, a series of strategies designed to work together to shape opportunities for development of the kinds of housing needed is necessary to effectively implement the Federal Way HAP. The Exhibit 1 matrix connects the nine selected strategies to the four plan objectives. It also links to a detailed strategy description containing ideas about how the strategy can be best implemented in the City of Federal Way. Exhibit 1 – Proposed Housing Strategies for Consideration and Related Housing Objectives Visualize which category of housing development the strategy is designed to directly support. The categories are market rate, income restricted affordable housing, and those that apply to both. Strategy Promote Housing Options Encourage Homeownership Plan for Quality Growth Preserve Affordable Housing #1 Promote a dense, walkable, mixed-use City Center.    #2 Update development regulations and design standards to be responsive to changing conditions.   #3 Increase diversity in housing choice through expanding missing middle development opportunities.    #4 Encourage Accessory Dwelling Unit production.  #5 Evaluate and consider revisions to MFTE program.  #6 Review and adjust school impact fees on multifamily housing.   Housing Action Plan: Strategies Briefing Page 4 of 4 The attached “Proposed HAP Strategies for Planning Commission Consideration” contains more details on the proposed strategies. ATTACHMENT A. Proposed HAP Strategies for Planning Commission Consideration NEXT MEETINGS • 4/21/21 – Planning Commission: Strategies and Implementation Matrix • 5/19/21 – Planning Commission: Public Hearing – Draft Housing Action Plan Strategy Promote Housing Options Encourage Homeownership Plan for Quality Growth Preserve Affordable Housing #7 Coordinate affordable housing development and preservation with community groups and the South King Housing and Homelessness Partnership (SKHHP).   #8 Establish a Manufactured Home Park closure chapter in the zoning code.  #9 Protect tenants through the development of a rental housing inspection program.  April 1, 2021 1 Federal Way Housing Action Plan Proposed Housing Strategies for Planning Commission Consideration This document presents a set of proposed objectives for addressing housing needs in Federal Way to increase residential building capacity and promote the development of market rate housing with provisions for income restricted affordable housing and preservation of naturally occurring affordable housing. These objectives and strategies were informed by the Housing Needs Assessment (HNA), Housing Policy, Code, and Permitting Review, the Visual Preference Survey, and additional engagement with the Advisory Committee, City Council, Planning Commission, and stakeholders. Housing Action Plan Objectives 1. Promote new housing development that expands housing choices and is inclusive to community needs. 2. Encourage homeownership opportunities and support equitable housing outcomes 3. 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. 4. Preserve existing affordable housing stock to prevent displacement pressure. There are nine strategies with implementing actions that realize the identified objectives #1 Promote a dense, walkable, mixed-use City Center. #2 Update development regulations and design standards to be responsive to changing conditions. #3 Increase diversity in housing choice through expanding missing middle development opportunities. #4 Encourage Accessory Dwelling Unit production. #5 Evaluate and consider revisions to MFTE program. #6 Review school impact fees on multifamily housing. #7 Coordinate affordable housing development and preservation with community groups and the South King Housing and Homelessness Partnership (SKHHP). #8 Establish a Manufactured Home Park closure chapter in the zoning code. #9 Protect tenants through the development of a rental housing inspection program. April 1, 2021 2 Housing Action Plan Strategies The Exhibit 1 matrix connects the nine selected strategies to the four plan objectives. It also links to a detailed strategy description containing ideas about how the strategy can be best implemented in the City of Federal Way. Exhibit 1 Proposed Housing Strategies for Consideration and Related Housing Objectives Visualize which category of housing development the strategy is designed to directly support. The categories are market rate, income restricted affordable housing, and those that apply to both. Strategy Promote Housing Options Encourage Homeownership Plan for Quality Growth Preserve Affordable Housing #1 Promote a dense, walkable, mixed-use City Center.    #2 Update development regulations and design standards to be responsive to changing conditions.   #3 Increase diversity in housing choice through expanding missing middle development opportunities.    #4 Encourage Accessory Dwelling Unit production.  #5 Evaluate and consider revisions to MFTE program.  #6 Review school impact fees on multifamily housing.   #7 Coordinate affordable housing development and preservation with community groups and the South King Housing and Homelessness Partnership (SKHHP).   #8 Establish a Manufactured Home Park closure chapter in the zoning code.  #9 Protect tenants through the development of a rental housing inspection program.  Internal Draft April 1, 2021 Federal Way | Housing Action Plan 3 #1  Promote a dense, walkable, mixed-use City Center.  What? The Puget Sound Regional Council (PSRC) designated Federal Way’s City Center Core (CC-C) zone as a Regional Growth Center. A key element of Regional Growth Centers is to promote dense, walkable, mixed- used areas. To date, there has been limited residential development located in the Federal Way’s Regional Growth Center (CC-C) zone. In 2024, the Sound Transit LINK station is planned to open and serve Federal Way north bound commuters. Future connections are planned for the Tacoma Dome Link Extension Station. To support the addition of high capacity transit access, higher density residential development and safe and pleasant connections to resources and amenities will fulfill the key elements to the Regional Growth Center area. Why? Concerns about greenhouse gas emissions from driving alone, growing interest in mixed-use neighborhoods, and desire for active, healthy ways of getting around are trends in the Puget Sound region pointing to community support for transit-oriented development (TOD). Currently adopted plans and development regulations for the City Center zones also point to a less auto-focused downtown. Higher levels of activity—i.e., increased number of homes and businesses/organizations/institutions—combined with safe and pleasant connections and gathering spaces near transit achieves the following:  Livable, vibrant, people-friendly places that serve the full spectrum of Federal Way’s residents and businesses.  Increased access to opportunity—the ability to easily reach jobs, education, healthcare, and services— through improved transit access.  A critical mass of transit riders to support the transit investment. PSRC calls for high capacity transit-served areas to have densities exceeding 15 to 20 homes per acre and/or 50 jobs per acre, and in a Regional Growth Center, densities of at least 45 people (resident/employee) per acre (VISION 2040, pg 81). Transit-oriented development leverages existing assets like local businesses, cultural anchors, and parks and adds to their vibrancy (and doesn’t displace them). Complementary development supports existing businesses and enlivens public spaces. How?  Revisit the City Center-Core (CC-C) and City Center-Frame (CC-F) zone building heights, streetscape, usable open space, and consider providing provisions for minimum densities to ensure TOD supportive  Evaluate city owned assets and future capital improvements in and around the City Center area appropriate for public and private partnerships. Internal Draft April 1, 2021 Federal Way | Housing Action Plan 4  Review the city’s existing Local infrastructure Financing Tool “LIFT Tax” program to support City Center development.  In the City Center Subarea Planning effort, explore specific opportunities, challenges, and strategies to encourage transit-oriented development. Consider a phasing plan that demonstrates how the station area can intensify over time and offers flexibility to meet changing community needs.  In station area planning efforts, identify physical barriers, solutions, and funding mechanisms that promote safe and pleasant paths for people walking, biking, and rolling to transit and other amenities. Related Strategies:  #2 Update development regulations and design standards to be responsive to changing conditions.  #5 Evaluate and consider revisions to MFTE program. Related Objectives: #1 Promote Options, #2 Encourage Homeownership, and #3 Plan for Quality Growth Case Studies  Lynnwood is also designated a Core City and Regional Growth Center by PSRC. Lynnwood is planning for coming light rail, developing the City Center Subarea Plan (2005), Streetscape Plan (2014), Lynnwood Transit Center Multimodal Accessibility Plan (2016), City Center Subarea Implementation Strategies Report (2017), City Center Parks Master Plan (2018), City Center Design Guidelines (2019), and others. These planning efforts set the vision for the area and development and design standards, and has attracted hundreds of new units just prior to light rail arrival in 2024.  Kent’s “Meet Me on Meeker” initiative is an effort to update the main corridor to the historic downtown, complement new development, and better connect residents with businesses through updated streetscape design and construction standards. Pairing one side of the road with wide sidewalks, a landscaped buffer/amenity zone and on-street parking, the other featuring a multi-modal promenade that extends from community trails to the downtown.  Many Puget Sound cities require minimum densities around transit, including Mountlake Terrace, Bothell, Bellevue, and Redmond. Mountlake Terrace Town Center uses a minimum height – four stories – rather than a minimum density, paired with a prohibition on surface parking near the future light rail station. Internal Draft April 1, 2021 Federal Way | Housing Action Plan 5 #2  Update development regulations and design standards to be responsive to changing conditions in mixed-use and multi-family zones.  What? In Federal Way the City Center-Core (CC), City Center-Frame (CC-F), and Community Business (BC) zones currently require at least 60% commercial frontage on the ground floor of all street facing facades. Federal Way has not seen any new multifamily development (besides senior housing) in recent years. Promoting desired and predictable development in the mixed-use and multi-family zones can be achieved through form-based code. Form-based code is a land development regulation that fosters predictable built results and a high-quality public realm by using physical form (rather than separation of uses) as the organizing principle for the code. Open space standards are an important consideration for design standards. These should be scaled based on the size of the development and should provide clear expectations for the types of space required. Private open space (such as balconies or yards), common indoor amenities (such as weight rooms), and landscaped shared open space (such as rooftop decks), serve different purposes and are appropriate for different kinds of development. Different housing types also offer advantages and constraints for providing open space. Why? While a mix of uses can help improve walkability and vibrancy, requirements for ground-floor retail in new multifamily projects can prevent development by reducing the financial feasibility of projects with space that is less profitable to developers. Ongoing transformation in the retail sector triggered by the rise of online shopping and big-box stores make street level retail a risky real estate asset. Newly constructed ground floor retail spaces in mixed-use buildings sometimes sit vacant, degrading the pedestrian environment that ground-floor retail requirements were intended to improve. Flexible or highly targeted requirements can concentrate retail space on the most viable corridors and reduce costly mandates in other areas. The best design standards offer a strategic mix of predictability and flexibility. This includes integrating clear minimum standards for site and building design so that the community knows what to expect as development occurs. Options for flexibility provide the applicant ways to have some adjustment while still meeting the intent of the standards. Such provisions are often called “departures,” “alternative designs” or “administrative adjustments.” These strategies encourage development of market rate townhome and condominium development to increase entry level homeownership opportunities at a lower-cost. Shared wall homes are also more energy efficient than free-standing houses and are cheaper to build. Federal Way’s rules for townhouses and condominiums are complex and restrictive, which makes new construction slower and more expensive than in other cities. Internal Draft April 1, 2021 Federal Way | Housing Action Plan 6 How?  Consider form-based code provisions in which density is governed by height limits, parking and conformance with stronger site and building design standards.  Consider amending the ground floor commercial requirement in mixed-use zones to promote flexibility.  Couple these flexible provisions with design standards to emphasize stoops and other similar active/pedestrian-friendly ground level frontages for residential uses.  Revise and simplify dwelling unit definitions and types outlined in FWRC 19.05.040.  Collaborate with Public Works department to identify areas for phased parking standards near the development of future mass transit.  Continue support of Transportation Demand Management (TDM) plans to allow reduced parking requirements where appropriate. Consider self-reporting as part of TDM plan for monitoring, evaluation and enforcement. Related Strategies:  #3 Increase diversity in housing choice through expanding missing middle development opportunities.  #5 Evaluate and consider revisions to MFTE program.  #6 Review school impact fees on multifamily housing Related Objectives: #1 Promote Housing Options, and #2 Encourage Homeownership Case Studies Parking minimums vary widely from city to city. Many jurisdictions have worked towards reducing or eliminating parking minimums in recent years.  Wenatchee’s 2019 housing code update includes design guidelines to ensure pedestrian-friendly design in higher density and mixed-use zones. Specific pedestrian-oriented streets in the historic downtown require non-residential use and have more stringent design guidance.  Anacortes’ code includes standards for live-work units, which accommodate ground-floor residential use with the flexibility to convert to commercial use when market conditions permit.  Condominium development has slowed significantly in the past decade due to litigation-related costs for developers. Senate Bill 5334, passed in 2020, attempted to address flaw’s in Washington’s legal framework for condominiums and may lead to increased production in coming years. Wenatchee Block-Frontage Standards Map Internal Draft April 1, 2021 Federal Way | Housing Action Plan 7 #3  Increase diversity in housing choice through expanding missing middle development opportunities.  What? Strategically expand opportunities for market rate development of missing middle housing types such as duplexes, triplexes, townhomes, cottage housing, and courtyard apartments in the Residential Single Family (RS). Currently single-family zones make up nearly 70% of the city zoned area, while only 1.1% of the city zoned area is RS5.0 allows limited missing middle options. Why? In Federal Way and many communities, the only housing choices are single-family homes on large lots or medium to large multifamily buildings. Such limited options do not reflect the wide range of needs of differing family sizes, household incomes, and cultural groups. One solution is encouraging a larger variety of housing types, often referred to as the “missing middle” as they typically not allowed by many zoning codes. They are also some of the most affordable forms of housing in terms of construction-cost-per-square-foot. In general, these types are more affordable than detached single-family homes and offer a greater range of design and locational choices than larger apartment buildings can offer. They also offer more flexible ways for communities to add compatible density into established neighborhoods and provide more opportunities for residents to have stability and build wealth through homeownership. If low density development is built within Sound Transit LINK station areas and amenity rich areas, that removes the opportunity for more people to live or work near transit for the foreseeable future. It will be decades before redevelopment would occur. It’s important to strategically locate residential density. Related Strategies:  #2 Update development regulations and design standards to be responsive to changing conditions.  #5 Evaluate and consider revisions to MFTE program.  #6 Review school impact fees on multifamily housing. Related Objectives: #1 Promote Options, #2 Encourage Homeownership, and #3 Plan for Quality Growth How?  Consider removal of barriers for missing middle housing types in single-family zones.  Analyze areas that can support redevelopment and where additional housing capacity can occur and would be supported by the neighborhoods. Integrate proposed changes into Comprehensive Plan update and FWRC. Internal Draft April 1, 2021 Federal Way | Housing Action Plan 8  Encourage missing middle typology of 4 units or more such as, courtyard apartments and townhomes and more on lots in amenity rich areas proximate to schools, parks, transit stops, or commercial uses.  Allow development of duplexes and triplexes on all corner lots and be reviewed under the same process as single-family homes, rather than requiring a separate land use approval, which adds time and cost to development.  Consider lower impact fees for missing middle housing typology.  Revise minimum lot size for townhouse developments from the current standard of 5,000 sf per unit to improve the financial feasibility of this type of development and opportunity for infill.  Revise front and side yard setbacks for duplexes, triplexes, and townhouses. Revise lot coverage permitted for higher density single family residential uses. Consider requiring minimum “open space” instead of maximum “lot coverage”  Expand cottage housing and compact single-family housing options to more single-family zones and consider allowing attached units.  Reevaluate cottage housing and compact single-family housing lot criteria. Consider reduction to required minimum lot and development size.  Revise the City’s Comprehensive Plan (related to Traffic and Street Sections), Non-Motorized Plan, and Park PROs plan. Review ADA Transition Plan for required revisions.  Pair all regulatory strategies to encourage new types of housing development with updated design standards to ensure compatibility and livability.  Add design standards for façade modulation, covered entries, pitched roofs, and integration of design details. These should also include strict standards on garage/driveway width and design. Case Studies  The City of Kirkland recently passed a missing middle housing reform which removed regulations such as, minimum lot sizes, proximity limitations, floor area ratios, and cottage housing developments.  In 2019, the City of Wenatchee revised its zoning code to allow duplexes, triplexes, cottage housing, and townhouses in almost all low-density residential zones.  An Oregon law passed in 2019 requires all cities above 25,000 to allow duplexes, triplexes, fourplexes, and cottage clusters to be built on all land that allows detached houses. Internal Draft April 1, 2021 Federal Way | Housing Action Plan 9 #4  Encourage Accessory Dwelling Unit production.  What? Encourage the construction of market rate and accessible housing options by removing code barriers for accessory dwelling units (ADUs). ADUs are small dwelling units that share a parcel with a house (the primary dwelling unit). Detached ADUs, like a backyard cottage or garage apartment, aren’t connected to a house. Attached ADUs are contained within the house structure but have separate living facilities, like a basement apartment. Why? All cities in Washington above 20,000 population are required to allow ADU construction, but in most cities few ADUs have been built because restrictions like owner-occupancy and parking requirements can make adding an ADU difficult to finance or accommodate on a site. For ADUs to play a role in reducing housing scarcity, restrictions that severely limit ADU construction should be reconsidered. Owner-occupancy provisions require that the homeowner live in either the primary dwelling unit or ADU. Federal Way requires owner-occupancy, however, these provisions make it more difficult to finance construction of an ADU, add to the permitting process, and are generally considered to be unenforceable. Owner-occupancy requirements applied to ADUs are also an unusual housing provision because homeowners are rarely prevented from renting out detached houses or condominiums. Related Strategies:  #2 Increase diversity in housing choice through expanding missing middle development opportunities.  #6 Review school impact fees on multifamily housing. Related Objectives: #1 Promote Options How? Remove barriers:  Eliminate owner-occupancy requirement for ADUs.  Consider reducing school impact fees on ADUs.  Allow on-street parking in front of the house, if available, to count toward the parking requirement.  Increase maximum allowed ADU size and remove minimum size.  Revise accessory use code to more easily permit ADUs over garages.  Remove minimum lot size requirement. Promote ADU development:  Eliminate stand-alone land use application process and conduct zoning review as part of the building permit.  Establish ADU program to advertise to the community Internal Draft April 1, 2021 Federal Way | Housing Action Plan 10  Invest in planning staff resources to simplify ADU permitting for the community by providing preapproved ADU plans at low cost.  Consider include plans that are designed accessibly for those living with a disability and mobility needs and that serve populations aging in place. Case Studies  In 2017 Vancouver, WA removed ADU owner-occupancy and parking requirements and allowed larger ADUs to be up to 50% of the size of the primary house.  In 2018 Olympia removed owner-occupancy requirements, eliminated parking requirements, and increased allowed heights for ADUs to 24 feet.  In 2019 Burien removed its owner-occupancy requirement, parking requirements (near transit stops), and allowed two ADUs on a lot if one is a detached ADU and the other is attached.  In 2020 Kenmore modified its owner occupancy provision so that it only applies in the first six-months after construction and removed minimum lot sizes. Internal Draft April 1, 2021 Federal Way | Housing Action Plan 11 #5  Evaluate and consider revisions to MFTE program.  What? While increased production of market-rate housing is an essential part of this Housing Action Plan, the housing market in Federal Way provides very few options that are income-restricted affordable units to very low-income individuals and families. There are a variety of tools that the city can pursue to increase the number of units that are income restricted. The City has a variety of policy and code provisions in place to ensure affordable housing development is built such as: • Mandatory inclusionary zoning per FWRC 19.110.010(2) require that developments with 25 units or more provide 5% of total of rental units be affordable for households with incomes at 50% AMI. • Optional density bonus per 19.110.010 (3)(a) allows one bonus market rate unit for each affordable unit included in the project; up to 10 percent above the maximum density of the underlying zoning district. • Multi-family dwelling unit limited property tax exemption (also known as MFTE) program is eligible in the CC-C and CC-F residential target areas per FWRC 3.30 serving at or below 80-115% AMI. • In looking at these tools, the MFTE program has not produced any affordable housing units. Why? The City should periodically review the measures it has in place to determine which are effective and which may need additional work to ensure that multifamily housing development integrate mixed income units effectively and support meeting community housing needs. Related Strategies:  #2 Update development regulations and design standards to be responsive to changing conditions.  #6 Review school impact fees on multifamily housing. Related Objectives: #1 Promote Options, #2 Encourage Homeownership, and #3 Plan for Quality Growth How? Evaluate the MFTE program to effectively result in the creation of affordable units. Consider revisions to the program requirements to serve 0-50% AMI levels. Internal Draft April 1, 2021 Federal Way | Housing Action Plan 12 #6  Review school impact fees on multifamily housing.  What? New population growth in a community increases demand for public infrastructure and services. Charging impact fees on new development is an important tool for partially funding growth-related improvements. However, impact fees also increase the cost of developing property. And, when the rates are set significantly higher than neighboring jurisdictions, they can discourage developers from building, including new housing. Why? No new multifamily housing development (such as apartments, condominiums, or townhomes) other than senior housing projects has occurred in the city since school impact fees were adjusted in 2017. Stakeholder input has indicated that local developers do not consider Federal Way to be a viable location for mew multifamily development due in part to its significantly higher school impact fees compared to other jurisdictions in the region. In December 2020, the Federal Way City Council adjusted its school impact fee rate schedule, for multifamily housing the fee uses tiers based on bedrooms, a flat rate is used to single family irrespective of bedrooms. The rates remain significantly higher than those imposed in neighboring jurisdictions. Related Strategies:  #2 Update development regulations and design standards to be responsive to changing conditions.  #4 Encourage Accessory Dwelling Unit production.  #5 Evaluate and consider revisions to MFTE program. Related Objectives: #1 Promote Options and #2 Encourage Homeownership, #3 Plan for Quality Growth How? Review and adjustment, if needed, of the school impact fee rate schedule for multifamily housing with consideration for the city’s policy goals of encouraging housing production and diversity. The City should also clarify whether multifamily impact fee rates apply to housing formats such as ADUs, townhomes, duplexes, and triplexes. $0.00 $5,000.00 $10,000.00 $15,000.00 $20,000.00 $25,000.00 2015 2016 2017 2018 2019 2020 2021 Annual Change in Federal Way School Impact Fee Multi-Family SF Mixed Use Internal Draft April 1, 2021 Federal Way | Housing Action Plan 13 #7 Coordinate affordable housing development and preservation with nonprofit developers, community groups, and the South King Housing and Homelessness Partnership (SKHHP).  What? Preventing displacement through promoting and preserving adequate affordable housing supply requires creative solutions and regional collaboration that cannot be solved within the city limits of one jurisdiction alone. There are many community entities that are interested in and work towards meeting the housing needs in Federal Way. This work can look like, but is not limited to organizations providing rental assistance, affordable housing developers, religious institutions, and anti-racism and racial equity advocates and Community based Organizations (CBOs) Why? The Housing Needs Assessment found that nearly 40% of all households in Federal Way are cost-burdened (over 13,000 in total), meaning they are spending more than 30% of their income on housing related costs. there is a large gap between the regulated units available and household and individuals that are cost-burdened. Housing insecurity and vulnerability to displacement does not treat all groups equally. On average, over 2% of renter households in Federal Way experienced an eviction filing each year between 2004 and 2017. This rate is nearly double for Black households, echoing similar inequitable patterns in other South King County communities1. Related Strategies:  #3 Increase diversity in housing choice through expanding missing middle development opportunities.  #5 Evaluate and consider revisions to MFTE program.  #9 Protect tenants through the development of a rental housing inspection program. Related Objectives: #1 Promote Options and #4 Preserve Affordable Housing How? Collaboration with these community entities will be essential to getting closer to meeting housing needs in Federal Way. Success will require a combination of actions, such as:  Coordinate with South King Housing and Homeless Partnership (SKHHP) network to support a revolving loan fund for preservation opportunities.  Monitor expiring regulated affordable housing properties.  Require notice of intent to sell for properties with rents under certain amounts.  Work with non-profit and religious institution interested in developing property for affordable housing construction.  Coordinate with the Diversity Equity and Inclusion manager to collaborate with CBOs serving the BIPOC (Black Indigenous People of Color) community that is disproportionately vulnerable displacement and historically excluded. 1 University of Washington. 2017. “The Evictions Study Map.” Center for Studies in Demography and Ecology. https://tesseract.csde.washington.edu:8080/shiny/evictionmaps/ Internal Draft April 1, 2021 Federal Way | Housing Action Plan 14 #8  Establish a Manufactured Home Park closure chapter to the zoning code.  What? Adopt a manufactured home park closure chapter in the zoning code that requires a park owner to prepare a relocation report and plan to assist park residents when a park is going to close. Why? Currently, Federal Way has 7 manufactured home parks with approximately 1,018 homes. Manufactured Home Parks (MHPs) provide naturally occurring affordable housing (NOAH) and homeownership opportunities in Federal Way to low- income households including many senior households. Adoption of local regulations to require an MHP owner to obtain approval of a relocation report and plan from the city before they can close a park would support low-income homeowners and renters at risk of displacement. The relocation report and plan must provide that the park owner will assist each tenant household to relocate. The relocation report and plan shall describe how the MHP owner intends to comply with Chapters 59.20 and 59.21 RCW, relating to mobile home relocation assistance, and with the other requirements of the new locally adopted closure chapter. No sooner than upon approval of the relocation report and plan, may the owner of the park issue the 12-month closure notice to the tenants. Related Strategy:  #7 Coordinate affordable housing development and preservation with community groups and the South King Housing and Homelessness Partnership (SKHHP). Related Objectives: #4 Preserve Affordable Housing How? This creates an opportunity for the City to support low-income households in the community by requiring adequate action by the landowner prior to converting manufactured home parks to other uses. Adoption of local regulations to require an MHP owner to obtain approval of a relocation report and plan from the city before they can close a park would support low-income homeowners and renters at risk of displacement. Case Studies  The City of Federal Way in 2015 evaluated proposed amendments related to regulations of Manufactured Home Parks, no final action was taken at that time.  The City of Kent established a Manufactured Home Park Zone that provides clarity on rules, regulations, requirements, and standards for the development, closure, and change in use of MHPs in the city.  The City of Kenmore created a Manufactured Housing Community zoning district to preserve MHPs and mitigate park closures. The enacting ordinance provides a mechanism to mitigate park closures, address the impacts of closure of MHPs, and offer landowners the ability to transfer their development rights. Internal Draft April 1, 2021 Federal Way | Housing Action Plan 15 #9  Protect tenants through the development of a rental housing inspection program.  What? Throughout South King County, the largest share of housing that is accessible to middle and low-income households is in the unregulated affordable housing stock. The Federal Way housing stock contains naturally occurring affordable housing (NOAH) that is affordable by nature of its age, location, condition, or amenities. In 2019 Federal Way residents passed the “Stable Homes Initiative” which created new protections for renters. Specifically, it limits the reasons for which a landlord can evict a tenant, requires a 120-day notice period when the landlord is removing the property from market, and requiring landlords to give tenants the option to renew a lease with at least 60 days’ notice prior to lease expiration. The city also provides limited financial support for legal assistance and credit counseling for preventing evictions. Why? Monitoring and maintaining existing unregulated and regulated affordable housing units can often be cheaper than constructing new units (although both are needed). This strategy calls for the city to expand tenant protections to ensure housing safety and collect data on the rental properties in the city. Related Strategies: #7 Coordinate affordable housing development and preservation with nonprofit developers, community groups, and the South King Housing and Homelessness Partnership (SKHHP). Related Objectives: #4 Preserve Affordable Housing How? Develop an inspection program and inventory of rental housing units in Federal Way to monitor their condition. Additional actions could include pairing this strategy with expanded access to tenant education and legal assistance.