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2021-04-07 Planning Commission MinutesPlanning Commission Minutes Page 1 April 7, 2021 CITY OF FEDERAL WAY PLANNING COMMISSION April 7, 2021 City Hall 6:30 p.m. Zoom MEETING MINUTES Commissioners present: Lawson Bronson, Tim O’Neil, Wayne Carlson, Diana Noble-Gulliford, Dale Couture, Hope Elder, Jae So, and Anna Patrick. Commissioners absent: Tom Medhurst and Eric Olsen (both excused). City Staff present: CD Director Brian Davis, Planning Manager Keith Niven, Associate Planner Chaney Skadsen, Senior Planner James Rogers, City Attorney Eric Rhoades, and Administrative Assistant II Tina Piety. CALL TO ORDER Chair Bronson called the meeting to order at 6:30 P.M. MINUTES The March 17, 2021, minutes were approved as presented. PUBLIC COMMENT None COMMISSION BUSINESS Discussion, Housing Action Plan (HAP) Strategies Briefing – Senior Planner Skadsen delivered the staff presentation. This is for information only. The goal of the city’s HAP document is to layout a comprehensive housing policy direction from which regulatory changes can be implemented. Federal Way’s HAP includes: • Housing Needs Assessment • Stakeholder Engagement & Public Participation • Housing Policy, Code, and Permitting Review • Housing Objectives and Strategies • Implementation Schedule The HAP objectives are to: 1. Promote new housing 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. Planning Commission Minutes Page 2 April 7, 2021 The Housing Needs Assessment determined that new housing production is not keeping pace with demand, which increases competition and drives up housing prices. The city needs to add 6,800 new units before 2040. The assessment also determined that 40 percent of all households are cost-burdened (over 13,000) with the greatest needs are households with an income below 50 percent of the Area Median Income (AMI). In addition, it was determined that there are disproportionate impacts in the black, indigenous, and people of color (BIPOC) communities. Staff developed 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 in mixed-use and multifamily zones. 3) Increase diversity in housing choice through expanding missing middle development opportunities. 4) Encourage Accessory Dwelling Unit production. 5) Evaluate and consider revisions to the Federal Way Multifamily Dwelling Unit Limited Property Tax Exemption (MFTE) program. 6) Review school impact fees on multifamily housing. 7) Coordinate affordable housing development and preservation with nonprofit developers, 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. Chair Bronson opened the meeting to public comment. Sam Pace, Housing Specialist with the Seattle King County REALTORS®. In summary, he is supportive of the city’s HAP specifically, the goal of increasing residential building capacity in the city and emphasizing Missing Middle Housing and ADUs. However, he is concerned the HAP may not go nearly far enough with regard to capacity. He believes the city’s comprehensive plan designations and accompanying zoning and development regulations place a cap on the amount of new housing that can be built in the city. They provide an upper limit on how much housing will be available in Federal Way. He encourages the city to “right-size” future downtown and TOD housing capacity based on 50-year needs, rather than the 20-year framework that he believes has proven to be a systemic failure for the last 30 years. One item that would help to attract homebuilders would be “additional predictability” by “grandfathering” existing uses in downtown and TOD areas, and then provide additional “overlay zoning” that allows development to meet 50-year market demand as an “outright permitted use.” The city has non-financial tools that hold enormous promise if used effectively. Those tools involve the regulatory authority and power to authorize, and to provide, legal capacity for enough housing in the city to ensure that everyone who needs a place to live will have access to housing they can afford. [His written comments are attached.] The Commission received two additional public comments by email that Assistant Piety forwarded to the Commissioners. They are attached. Commissioner Noble-Gulliford asked Mr. Pace to provide examples of non-financial tools. Mr. Pace responded that fully utilizing ADUs, downzoning and up-zoning as appropriate, and planning using a 50- year horizon are examples of some non-financial tools available to the city. Commissioner Elder suggested a change to the code so that a property owner requesting an ADU is not required to live on the property for at least six months out of the year. This would lead to more use of ADUs. Planning Commission Minutes Page 3 April 7, 2021 Commissioner O’Neil suggested the city allow more flexible zoning specifically to allow residential in the City Center zone, specifically for The Commons. He also suggested eliminating single-family zoning and exempting ADUs from impact fees. Director Davis explained that city center zoning allows residential zoning and due to financial reasons, The Commons hasn’t included residential, but expect they will in the future when it becomes more financially feasible. Commissioner Carlson expressed concern about Mr. Pace’s suggestion that the city use a 50-year timeline for planning because the PSRC doesn’t use a 50-year timeline (they use 20 years) when developing area housing and job numbers to be used for planning. This means the city would be planning for housing and job numbers that may be different from the official area numbers. Commissioner Patrick expressed concern that the city should consider equity compared to the surrounding neighborhoods/cities and King County overall. Our policies need to set the city up for success moving forward. She expressed concern over lack of tax revenue from the newer LIHTC apartments. The city has a number of large apartment complexes where a large number of people live, but the city does not receive property tax from these LIHTC apartments except for the retail portion. This leaves us with a large population but no revenue from it for the duration of the tax exemption program. The city needs to consider alternatives to pay for our “infrastructure” (roads, schools, fire, police, etc.). We need look beyond the designated AMI tax bracket and examine the actual tax bracket of the rentals compared to other cities and be on the defensive. The numbers do not match up. Commissioner Noble-Gulliford expressed concern over the financial feasibility for different housing types (duplexes, ADUs, cottage housing, etc.) and asked if there are construction and buyer loans available for the different types. Planner Chaney replied she will have to research this. Commissioner Noble-Gulliford also expressed concern the city/staff is implying that BIPOC communities will receive special services. The City should not racially discriminate against anyone and the 1968 Fair Housing Act has been in place for decades to prevent any discrimination. Planner Chaney replied that is not the intent, but we need to be aware of how they have been treated in the past and not repeat it. Commissioners Noble-Gulliford and Patrick suggested the city consider offering a program that will educate people on home-buying (similar to what the city offers to educate on recycling). Chair Bronson expressed the need for sewers in areas of the city still using septic systems. Commissioner Patrick expressed concern over allowing ADU’s in neighborhoods without sidewalks. Discussion, Preliminary Growth Targets Briefing – Senior Planner Rogers delivered the staff report. This is for information only. The Growth Management Act (GMA) provides the foundation for the development of regional planning policies via the Puget Sound Regional Council (PSRC), and those policies shape King County Countywide Planning Policies (CPP), which in turn provides guidance for the development of our planning policies. The CPPs, developed by the King County Growth Management Planning Council (GMPC), establish growth targets for each jurisdiction. The growth targets currently being established will be used for our update to the 2024 comprehensive plan. Our comprehensive plan will link these growth targets to land use assumptions, guiding where people will live and work within our city. This process happens every six to eight years, and coincides with the comprehensive plan update schedule. The methodology to develop the targets is a five-step process: Planning Commission Minutes Page 4 April 7, 2021 • Step 1 – Create Countywide Regional Allocations • Step 2 – Select Data Factors • Step 3 – Collect Data • Step 4 – Convert Data into Percentage Shares • Step 5 – Create Preliminary Targets After two rounds of negotiations between local jurisdictions and the state, Federal Way’s current targets are: housing at 11,260 and jobs at 20,460. At this point, the anticipated housing units have all been allocated, but there are still 27,899 anticipated jobs yet to be allocated. The public comment period will run through early May. This will be the city’s opportunity to adjust if needed. Amendments to the CPPs targets, based on public comments, will be presented to GMPC for approval by June 24. The GMPC is scheduled to adopt the CPPs and targets during the third quarter of the year. In the fourth quarter, the adopted CPPs and targets will go to the cities for ratification. Commissioner Carlson asked if there had been any direction from the City Council. He noted that Issaquah took virtually no population and other communities varied considerably based on local growth desires. Director Davis responded that staff had not formally presented the draft allocation to the Council. Commissioner Carlson expressed surprise that the Council had not yet been advised about the discretion it has with its population allocation within the Core Cities regional geography. Director Davis responded staff has not yet formally presented these findings to the Council. Commissioner Noble-Gulliford asked if these targets are in addition to our current targets? Planner Rogers replied that they are in addition. STAFF BUSINESS Director’s Report – Director Davis introduced our new Planning Manager, Keith Niven. NEXT MEETING April 21, 2021, 6:30 p.m., Zoom Meeting ADJOURN The meeting adjourned at 8:11 P.M. K:\Planning Commission\2016\Meeting Summary 04-07-21.doc TO: Planning@CityOfFederalway.com Testimony of Sam Pace City of Federal Way Planning Commission April 7, 2021 Good evening, My name is Sam Pace. I’m a Housing Specialist with the Seattle King County REALTORS®. I’m here this evening representing the 7,000+ members of our Association. We would begin by noting that the focus of GMA Goal #4 in RCW 36.70A.020 (4) is focused on a variety of housing options affordable to all economic segments of the population. Because housing is a necessity of life, the very real need for housing doesn’t disappear, or decline, just because rents and prices increase, which is what happens when there is not enough housing for everyone who needs a place to live…and that has been the situation in Federal Way - and throughout King County - since at least 2011 when the recovery began. We believe the Council, the Commission, and City Residents join us in wanting Federal Way to offer a great Quality of Life. Quality of Life begins with a good job in a company that has a great future, and a home is where that job goes at night. But we don’t have enough housing for everyone who needs a place to live. In fact, even before the Legislature approved incentives for cities to adopt Housing Action Plans in 2019, our research indicated an existing shortage of 240,000 housing units in King County alone. So, we are supportive of: The goal of increasing residential building capacity in the city, and emphasizing Missing Middle Housing and ADUs, but we are concerned the Housing Action Plan may not go nearly far enough with regard to capacity. It’s critically important that the Planning Commission, City Council, and the Housing Action Plan expressly recognize that the City’s Comprehensive Plan designations, and accompanying zoning and development regulations, place a cap on the amount of new housing that can be built in the city. They provide an upper limit on how much housing will be available in Federal Way. Here’s one bit of context to illustrate why we think it’s important to keep that “limiting function” front and center. The Federal Way School District has more than 23,000 students. If just 15% of those graduate every year, that’s 3,450 graduates, annually, but this Housing Action Plan seeks to achieve 339 additional housing units each year. The housing targets you have seen referenced in connection with the Needs Assessment and HAP are minimums, not maximums, under state law…and they are only based on 20-year projections. But housing units that get built under this HAP will remain in place for more than 50-years (which is the functional and economic life of most residential construction). For this reason, the City’s Housing Action Plan should avoid under-utilizing opportunities to provide capacity that is responsive to actual demand, especially in areas where Transit-Oriented Development is anticipated. The place to begin to address this enormous disconnect between prior planning and actual housing demand is to “right-size” future Downtown and TOD housing capacity based on 50-year needs, rather than the 20-year framework that has proven to be a systemic failure for the last 30 years. A continuation of that three-decades of failure throughout King County (this is not a challenge in just Federal Way) will fall hardest on the most economically vulnerable members of the community. Federal Way has failed to keep pace with its housing targets. One item that would help to attract homebuilders would be “additional predictability.” The Housing Action Plan could help with predictability for both builders and current residents (and minimize NIMBY concerns) by “grandfathering” existing uses in Downtown and TOD areas, and then provide additional “overlay zoning” that allows development to meet 50-year market demand as an “outright permitted use” - rather than a “conditionally permitted use.” As projects start to pencil for builders (based on costs, regulatory exactions and market conditions), existing property owners will gravitate towards voluntary sales, and the construction of new housing at 50-year densities will begin to occur. Housing Policy and code review changes - including “Form-based Code” approaches – in the HAP are encouraging, and appear well intended. Nevertheless, it’s important to remember that the impact will be marginalized without both enormous increases in capacity, and predictability about what can be built. Finally, being intentional about additional “Missing Middle Ownership Housing Opportunities” is critically important for “taking would-be buyers out of the rental market” so that less affluent households (often very diverse households) are not forced to compete with more affluent would- be buyers for the limited supply of rental housing. Historically, government has only been able to provide about 5% of the housing supply. So, it’s extremely unlikely the City will ever have enough money to buy housing for everyone who needs it. But the City does have non-financial tools that hold enormous promise if you have the courage and foresight to use them effectively. Those tools involve the regulatory authority and power to authorize, and to provide, legal capacity for enough housing in the City to ensure that everyone who needs a place to live will have access to housing they can afford. Thank you for the opportunity to offer these comments. Sincerely, SEATTLE KING COUNTY REALTORS® Sam Pace Sam Pace sam@sampace.com (253) 569-2663 From:Gina Clark To:Stacey Welsh; Tina Piety; Brian Davis; Keith Niven; Chaney Skadsen Cc:Jim Ferrell; Jeri-Lynn Clark; Susan Honda; Marco Lowe Subject:Draft Housing Action Plan Date:Wednesday, April 7, 2021 2:24:48 AM Attachments:image001.png image002.png image003.png image004.png image005.png Federal Way Draft HAP Planning Commission April 7 2021.pdf [EXTERNAL EMAIL WARNING] This email originated from outside of the City of Federal Way and may not be trustworthy.Please use caution when clicking links, opening attachments, or replying to requests forinformation. If you have any doubts about the validity of this email please contact IT Help Deskat x2555. Good morning, Chair Bronson and Federal Way Planning Commissioners. Attached, please find a letter of support for staff’s initial draft of the HAP, including additional comments from MBAKS for Planning Commission’s consideration. I’m officially on vacation after hitting send on this email, but will be returning next Monday. I will be happy to answer any questions at that time. Take care, and be well. Gina Gina Clark | Government Affairs Manager, King County p 425.460.8224 c 425.268.1156 335 116th Ave. SE, Bellevue, WA 98004 mbaks.com ­­ ­­­ We aspire to be the most trusted and respected housing experts in the Puget Sound region. April 7, 2021 Honorable Lawson Bronson Chair City of Federal Way 33325 8th Ave. S. Federal Way, WA 98003 RE: Draft Housing Action Strategies Dear Chair Bronson and Federal Way Planning Commissioners: With nearly 2,700 members, the Master Builders Association of King and Snohomish Counties (MBAKS) is the largest local homebuilders’ association in the United States, helping members provide communities a range of housing choice and affordability. MBAKS thanks the City for the opportunity to submit comments on the draft of the Housing Action Plan (HAP). MBAKS applauds planning staff’s efforts in the draft HAP and supports, in full, the recommendations and priorities staff has proposed. Federal Way needs more housing choice along a spectrum of affordability. With the Puget Sound Regional Council (PSRC) still estimating 1.8 million more people and 1.3 million more jobs in our region by 2050, maximizing space matters to create homes for people today and tomorrow matters. And it especially matters when the supply of housing continues to be at record lows. According to Up for Growth, our state underproduced housing by 225,000 units between 2000-2015. If we continue with our historic building patterns, 67% of housing will be single-family residential, 29% will be some form of missing middle (duplex, triplex, ADU) and medium density (podium apartments), and 4% high density (apartment towers). According to the Northwest Multiple Listing Service, King County only had 0.85 month of housing inventory available in February. An indicator for a healthy housing market is six-month’s supply. MBAKS Monthly Builders Bulletin Low supply helps inflate housing price. In February 2021, the median price of single- family homes and condos was $679,075 in King County. For single-family homes only, the median price in King County rose 11.11%, from $675,000 a year ago to $750,000. In Seattle, the median single-family home price for February was $798,000, a 9.24% increase from February 2020. As families, first-time homebuyers, seniors, single-parents, teachers, police, fire, nurses, and grocery clerks search for housing, they are increasingly looking for more housing choice and affordability, as more are priced out of single-family home ownership. And as seen in the past, as home rental and mortgage prices continue to rise in Seattle and on the Eastside, those seeking more affordable living tend to move further north, deeper into Snohomish County, or south, deeper into King County, where prices remain slightly more attainable. According to the National Association of Homebuilders annual report, Priced Out, the median single-family home price for the combined Seattle-Tacoma-Bellevue area in 2020 was $542,762, requiring a minimum income of $116,574 to qualify for a standard loan. In 2020 there was a population of 1,571,761 in the Seattle-Tacoma-Bellevue region, of which 639,320 people could qualify to buy a single-family home. But 932,441 people could not qualify for homeownership at these rates. Furthermore, for every $1,000 increase in the price of a home, another 1,557 people are priced out of the market. However, this number does not consider many factors we should, including an equity lens that considers long-standing exclusionary zoning practices, redlining, preferential lending, and other significant challenges faced by BIPOC communities as they compete for homeownership, search for affordable rents, and struggle to narrow economic and opportunity gaps. Federal Way’s Housing Needs Assessment, completed by the South King County Coalition on Homelessness Partnership (SKCCHP), and the draft HAP, is an incredible step in the right direction to identify the full range of need and provide the planning, concrete steps, and implementation tools to fill that need. MBAKS understands the difficult balance cities face balancing housing, infrastructure, economic development, and the environment, among others. But given the ongoing housing crisis that impacts every community now and for the foreseeable future, including Federal Way, MBAKS urges the Planning Commission to support staff’s initial recommendations and to go bold in vision, goals, and implementation. In addition to staff’s recommendations and strategies, MBAKS would respectfully add the following for consideration as the City seeks to add a range of housing types along a spectrum of affordability: • Remove Single Family Zoning: As staff’s initial draft moves forward, consider bolder steps, and allow more housing choice everywhere in Federal Way including in single-family zones. Housing choice, medium density units, missing middle are not new concepts but were co-opted in the early 1900’s by exclusionary zoning policies, redlining, and preferential lending practices. Today, most area within cities are still zoned single-family residential and do not allow housing choice within those zones, for rental or ownership. This means most of our cities are locked to additional housing opportunities such as ADU/DADU or cottage, carriage, duplex, triplex. As Federal Way continues to grow and finds more pressure on available land and housing costs, consider removing single-family zoning. Kirkland took these steps last March. Many cities have or are also considering it. Minneapolis: https://www.brookings.edu/blog/the- avenue/2018/12/12/minneapolis-2040-the-most-wonderful-plan-of-the-year/ Berkley: https://www.mercurynews.com/2021/02/24/berkeley-to-end-single- family-residential-zoning-citing-racist-ties/ Sacramento: https://sacramentocityexpress.com/2021/01/25/city-council- shows-strong-support-for-allowing-more-housing-types-in-single-family- neighborhoods/ Portland: https://www.strongtowns.org/journal/2020/8/13/5-things-you- should-know-about-portlands-new-housing-reform • Maximize Efficiencies: Missing middle housing is missing because it is difficult to build. Land in our region is expensive, as is labor, supplies, regulations, and fees (think Federal Way’s $16,000 per unit school impact fee as an example). Availability of land is also shrinking and vacant and available lots often present development challenges. Think critical areas, for example. Maximizing uses on existing land within existing urban growth areas is vital to prevent sprawl, utilize existing infrastructure, create jobs-housing and jobs-education balance, and benefit from transit. To help produce more affordable housing on expensive and valuable land, cities and applicants need to maximize efficiencies. Jurisdictions and homebuilders (market rate or affordable) need to collaborate to get the best use of the land to help house the most people by offering as much choice and affordability as possible at price points home builders can afford to build. A couple of visuals recently published in The Urbanist illustrate the points. Please keep in mind these are simply examples, with rough numbers and square footages to provide illustration: People-Housing Efficiencies: The first is an example of ways to maximize land to provide housing choice to house more people. Cost-Affordability Efficiencies: The second picture from The Urbanist illustrates how to maximize costs of land and construction with that of home ownership per unit. In either scenario, and for any type of housing product, it is vital that communities and homebuilders work closely and openly to maximize efficiencies to meet needs. Scrub Your Entire Code: Ensure the rest of your zoning, land use, building, and development codes accommodates housing choice and affordability within each planning area. Staff has indicated this is a priority, and MBAKS supports. https://www.strongtowns.org/journal/2018/3/21/kick-the-tires-on-your- local-zoning-code In addition, when updating codes, consider amendments to simplify, incentivize, and streamline process for short plats, fee simple townhomes, duplex/triplex, ADUs/DADUs, transit-oriented development, and other upzone, rezone, and infill opportunities. https://www.psrc.org/sites/default/files/hip-townhomes.pdf https://www.psrc.org/sites/default/files/hip-upzone.pdf https://www.psrc.org/sites/default/files/hip-infill.pdf • Form Based Code: Staff mentioned form-based code and Federal Way may want to consider it depending on housing goals. As seen in Shoreline, form- based code can help a jurisdiction provide housing for more diverse households while providing a broader range of affordability. It can produce more urban densities that support walkable communities, boost local retail and commercial services, and build for existing or future transit needs. Form-based code also gives a level of predictability. It allows jurisdictions and applicants to work within known design, form, scale, bulk, placement, and relationship of one building to another and of building to street. It focuses on people, not uses, and allows for maximizing of space. • End Parking Minimums: Parking is expensive to construct. It is not environmentally friendly, is often underutilized, and takes up valuable land where housing could be. When working with limited land area, smaller bulk, form, design, space should be maximized for people and environment, not cars, especially near transit. We should work together to more carefully study, analyze, and consider alternatives before making room for more parking. https://www.psrc.org/sites/default/files/hip-parking.pdf https://www.strongtowns.org/journal/more-evidence-that-we-have-too- much-parking • Streamline Regulation: Consider streamlining the regulatory process for medium density, missing middle, and affordable housing projects. Homebuilding is expensive and takes a long time. Land costs, permit/building/inspection fees, impact and mitigation fees, environmental review, design and engineering, utilities, labor, supplies, to name a few. The cost of lumber, for example, has risen 110% since last April, adding approximately $16,000-$20,000 to the cost of a 2200 square foot single-family home. Work with builders and developers, architects, engineers, and affordable housing advocates to provide ways to reduce regulations and streamline process to keep costs down, ultimately for the end renter or buyer. As mentioned by staff, Federal Way’s impact fees on multifamily are cost prohibitive to most builders and will absolutely prevent the City from reaching its housing needs goals. Bonding requirements in Federal Way are costly and prohibitive to many homebuilders and should be amended sooner rather than later. There are other streamlining and permitting amendments that can make a significant difference in timing and cost to housing production. Federal Planning staff has indicated their interest in working together to help move these issues forward, and MBAKS looks forward to the opportunity. https://www.psrc.org/sites/default/files/hip-reg-streamlining.pdf • Incentivize Housing: Cities can help incentive the construction of more affordable housing by offering incentives. If Federal Way has not considered adding more robust incentives for housing choice, MBAKS would encourage it. Washington state law (RCW 36.70A.540) gives cities and counties authority to enact incentive zoning programs to encourage affordable housing. Incentive zoning provides a menu of incentives and public benefits, which local code must provide. These may include: Density bonuses Parking requirement reductions Multi-family Tax Exemption Planned Action EIS Incentive Zoning Public Land for Affordable Housing Permitting Authority Additional FAR Additional height bonuses Additional setback and lot adjustments Property tax exemptions Affordability incentives • Value Small Parcels Too: Consider value and use in your small or irregularly shaped parcels. Sites where builders and cities do not have to assemble land for larger projects. Make room for smaller builders to build, and for production of duplex, triplex, quad, townhomes. https://www.strongtowns.org/journal/2019/2/14/savor-your-small-parcels- and-create-more-of-them • Value Smaller Units Too: Zone for and incentivize smaller residences (generally 600 to 1,500 square feet) too, and at higher densities. These enable homeownership and equity opportunities, including for BIPOC communities, seniors to downsize and age in place, and provide housing for college students, smaller families, and single parents. A system based on allowed density either dwelling units per acre, or square footage per unit often encourages developers to build units as large and as expensive as the market will accept. • Build Support: Continue to build community support for a range of housing types, affordability, and diverse neighbors. The community survey staff conducted was successful, easy to take, relatable, and produced some great insight. SeaTac is also doing some great community engagement as part of their HAP work and would be happy to discuss strategies, resources, tools. Visit their website to learn more. https://www.psrc.org/sites/default/files/hip-community-support.pdf • Prepare for Displacement: Displacement can be physical or economic. And displacement can be particularly real around areas of planned transit or in more established, older areas of the community. There are tools to help preserve existing affordable housing and to help prevent or curb displacement. Communities around our region are addressing both in a variety way with several tools to help. This newly released report on anti- displacement strategies is particularly useful. https://www.psrc.org/sites/default/files/hip-displacement.pdf Finally, do not forget about our partners in the world of subsidized affordable housing at or below 50% AMI. They have been valuable partners in our work to help produce housing choice and affordability. Federal Way already works closely with SKCCHP, but the Housing Development Consortium (HDC) is another great resource. Patience Malaba is the government affairs director and Mallory VanAbbema is the policy and advocacy manager. patience@housingconsortium.org mvanabbema@housingconsortium.org Thank you for your consideration and opportunity to share information. MBAKS truly appreciates the opportunity. If you have any questions or comments, please feel free to contact me at gclark@mbaks.com or (425) 268-1156. Sincerely, Gina Clark Government Affairs Manager, King County cc: Mayor Jim Ferrell City Council Brian Davis, Community Development Director Keith Niven, Planning Manager Chaney Skadsen, Associate Planner Stacey Welsh, Principal Planner Tina Piety, Administrative Assistant II 1 Chaney Skadsen From:Brian Davis Sent:Tuesday, March 30, 2021 12:28 PM To:Chaney Skadsen Subject:Fwd: Housing Action Plan Strategies - Draft Attachments:Draft Housing Strategy for Internal Review FWPS comments.docx Brian Davis Community Development Director City of Federal Way Begin forwarded message: From: Sally McLean <smclean@fwps.org> Date: March 30, 2021 at 10:42:02 AM PDT To: Brian Davis <Brian.Davis@cityoffederalway.com> Cc: Danielle Pfeiffer <dpfeiffe@fwps.org>, Tammy Campbell <tcampbell@fwps.org> Subject: Housing Action Plan Strategies - Draft [EXTERNAL EMAIL WARNING] This email originated from outside of the City of Federal Way and may not be trustworthy. Please use caution when clicking links, opening attachments, or replying to requests for information. If you have any doubts about the validity of this email please contact IT Help Desk at x2555. Hello Brian, Thank you for the opportunity to review and comment on the draft Housing Action Plan Strategies. I focused my attention and comments on the section related to multifamily impact fees. I also made edits and added comments to the document itself if that is more efficient. Here is a summary of comments and suggested edits: 1. Change the title from “impact fees” to “school impact fees” 2. Consistency with neighboring jurisdictions is NOT part of the jointly created (Master Builders and School Districts) formula calculations. Indeed the formula recognizes that there are different costs and impacts in different communities. I would prefer this be struck from the notes. 3. We are supportive of clarifying the designation (single-family or multi-family) of town homes, duplexes and accessory dwelling units. Please note there are times that the single-family fee is higher than the multi-family fee. 4. Can you provide information about the single family “deferred payment”? I wasn’t aware there were any deferred payment option. In general, the District objects to this as an option, as the cost of providing capacity occurs prior to occupancy in order to permit and install portables (6-8 months). Thank you again for the opportunity to be part of this committee. I appreciate learning more about housing needs within the City of Federal Way. Sally D. McLean Chief Finance & Operations Officer 2 Federal Way Public Schools (253) 945-2042 (253) 391-6989 (cell) From: Brian Davis <Brian.Davis@cityoffederalway.com<mailto:Brian.Davis@cityoffederalway.com>> Sent: Tuesday, March 23, 2021 8:12 AM To: Sally McLean <smclean@fwps.org<mailto:smclean@fwps.org>> Subject: Housing Action Plan Strategies - Draft STOP. THINK. VERIFY. This email was received from an external source (not @fwps.org) and may not be trustworthy. Stop, think, and verify the source of the message before you click links, open attachments, or respond. Please report phishing emails to Microsoft (directions<https://docs.microsoft.com/en- us/office365/SecurityCompliance/submit-spam-non-spam-and-phishing-scam-messages-to-microsoft- for-analysis>). If you need further assistance, please attach the suspicious message to a new email to helpdesk@fwps.org<mailto:helpdesk@fwps.org>. Sally, Our Housing Action Plan consultant has gathered feedback from the advisory committee, Planning Commission, City Council, and regional data. They have come up with the attached list of strategies and I wanted you to have a chance to review it with your team since one of the strategies is “Analyze Impact Fees on Multi-family Housing.” Please let me know your thoughts. The next step is to present this to the Planning Commission in preparation for the full plan (which we have not received yet) to be adopted. If possible, please send me your feedback by next Tuesday. I appreciate your assistance and perspective on this. Brian Davis Community Development Director, City of Federal Way 33325 8th Ave So., Federal Way, WA 98003 253-835-2612 | Brian.Davis@cityoffederalway.com<mailto:Brian.Davis@cityoffederalway.com> April 22, 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, Housing Policy, Code, and Permitting Review, the Visual Preference Survey, and additional engagement with the Advisory Committee, City Council, Planning Commission, stakeholders. The five proposed objectives for the Housing Action Plan are shown in Exhibit 1. Exhibit 1. Proposed Objectives for the Housing Action Plan Objective Description Needs Addressed Increase Production/Diversity Encourage new housing development in a variety of formats to expand housing choices for a diversity of household types and income levels.  Historic underproduction of housing has contributed to rising housing costs.  Federal Way needs to increase annual housing production to meet forecasted demand.  Increasing housing diversity is needed to expand housing choices (renter and ownership) for all income levels Homeownership Opportunity Support greater equity in homeownership opportunity.  Shortage of lower-cost homeownership opportunities  Lack of pathways to attainable homeownership  Disparities in homeownership due in part to barriers experienced by BIPOC households Enhance Character Enhance the character and livability of existing neighborhoods.  Ensuring new housing is woven into the existing fabric of Federal Way to promote community cohesion, integration, and vitality. Complete Communities Promote complete communities by tying housing production to improved infrastructure, resources, and amenities.  Both new and existing residents need access to infrastructure, services, and amenities that enable them to thrive.  These may include frequent transit, parks and open space, neighborhood-serving businesses, schools, social services, etc. Prevent Displacement Help residents to stay in their homes through the preservation of existing affordable housing and actions to reduce displacement pressure.  Many lower-income residents face eviction and displacement pressures as housing costs escalate rapidly.  There are significant racial disparities in displacement pressure. About 4% of Black households see an eviction filing each year, compared to only 1.5% of White households. Exhibit 2 lists a set of preliminary draft housing strategies for achieving the five objectives. The table notes the objective(s) to which each strategy is most closely related. Then the following pages provide detailed descriptions of each strategy Internal Draft April 22, 2021 Federal Way | Housing Action Plan 2 Exhibit 2 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 Increase Production/ Diversity Homeownership Opportunity Enhance Character Complete Communities Prevent Displacement Encourage Transit-oriented Development   Revise Parking Minimums   Add Flexibility to Ground Floor Requirements  Allow “Missing Middle” Housing Types    Increase Ownership Opportunities    Encourage Accessory Dwelling Units  Incentivize Inclusive and Accessible Housing Options  Update Design Standards  Encourage Affordable Housing Development  Plan For, and Invest in, Complete Communities   Analyze Impact Fees on Multifamily Housing   Establish a Manufactured Home Park Zone  Support Affordable Housing Preservation   Strengthen Tenant Protections  Internal Draft April 22, 2021 Federal Way | Housing Action Plan 3  Encourage Transit-oriented Development What? Encourage higher density development and safe and pleasant connections to high capacity transit. In general, transit-oriented development (TOD) areas are ¼ to ½ mile around frequent, high capacity transit. The greatest opportunity lies in Federal Way’s City Center (future) light rail station area, the southern green circle in Exhibit 3. Secondary opportunities exist for the area around the future South 272nd St Station and along the existing RapidRide A Line. Though Figure 1 focuses on the northern part of the city, additional routes to address in long-range planning include: • Planned RapidRide along S 320th St connecting to Auburn (Metro Connects 2025 Plan) • Pierce County Transit routes, including Route 500 and 501 to Tacoma and 402 to Puyallup. Two routes run along Pacific Highway south of the transit center and then split ways, and one runs along 20th Ave S. Why? Lower car ownership rates, increasing transit ridership (outside of the COVID-19 pandemic), 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. Currently adopted plans and development regulations for the City Center zones also point to a less auto-focused downtown. People are generally willing to walk up to 10 minutes (1/2 mile) for frequent, high capacity transit, and bike from up to 3 miles away. For local, frequent bus routes, people are willing to walk up to 5 minutes (1/4 mile). However, if low density development is built within station areas, that removes the opportunity for more people to live or work near transit for the foreseeable future. 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 Exhibit 3 High capacity transit walksheds Internal Draft April 22, 2021 Federal Way | Housing Action Plan 4 areas to have densities exceeding 15 to 20 homes per acre and/or 50 jobs per acre, and if designated a Regional Growth Center, densities of at least 45 people (resident/employee) per acre (VISION 2040, pg 81). If done right, 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? Encourage transit-oriented development for market rate development and affordable options through a combination of complementary actions, including:  Plan for, and invest in, complete communities, with an emphasis on the following:  In the City Center Subarea Planning effort, explore specific opportunities, challenges, and strategies to support transit-oriented development. Revisit the City Center-Core (CC-C) and City Center-Frame (CC- F) zone building heights, streetscape, usable open space, and parking standards to ensure higher design quality for this important TOD area.  Support additional long-range planning around transit, including the planned S 272nd St Station existing and planned bus rapid transit.  In station area planning efforts, identify physical barriers, solutions, and funding mechanisms for ensuring safe and pleasant paths for people walking, biking, and rolling to transit.  Change Comprehensive Plan classifications within a ½ mile and ¼ mile of transit to allow higher density zoning.  Related strategies include:  Relax Parking Minimums  Add Flexibility to Ground Floor Requirements  Update Design Standards  Analyze Impact Fees on Multifamily and Attached Housing  Encourage Affordable Housing Development Case Studies  Lynnwood planned 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.  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.  Minneapolis requires minimum densities around rail transit stations, ranging from 50 dwelling units per acre in the Urban Center to 15 dwelling units per acre in the outer suburbs. Internal Draft April 22, 2021 Federal Way | Housing Action Plan 5  Revise Parking Minimums What? Revise the parking requirements for off-street parking for Multifamily and Mixed-Use developments particularly for developments in close proximity to high-capacity transit. Why? Parking is an expensive component of real estate development. Excavation for below-ground parking is expensive, and above-ground structured parking occupies valuable building space. Both typically need to be built with costly concrete construction. Even less expensive surface parking requires large areas that could be used for open space or leasable building space. Renters in most cities, including Federal Way, typically have fewer cars per household than homeowners,1 and the availability of free parking encourages people to acquire more cars and drive more than they would otherwise.2 Allowing developers and the City to continue reduced parking requirements where appropriate can reduce housing costs and traffic impacts of new development. How and Where? The following adjustments would bring Federal Way’s parking standards closer to trends in comparable cities:  Apply new Washington state parking minimum limits within ¼ mile of frequent transit, which include light rail and Rapid Ride for market rate and affordable developments (law takes effect July 2021).3  Implementation method: code amendment  Revise and simplify dwelling unit definitions and types outlined in FWRC 19.05.040.  Revise parking standards to encourage reductions for studios and one bedrooms and flexible adjustments for 2+ bedrooms  Continue support of Transportation Demand Management plans to allow reduced parking requirements where appropriate. Case Studies Parking minimums vary widely from city to city. Many jurisdictions have worked towards reducing or eliminating parking minimums in recent years.  In 2019, Anacortes reduced parking minimums to 1 space per studios or 1-bedroom unit, 1.4 spaces per 2- bedroom unit, and 1.6 spaces per 3-bedroom unit.  An Oregon law passed in 2019 reduced parking minimums for missing middle housing for most cities in the state to one per unit.  In 2021 the cities of South Bend, Indiana, and Berkley, California eliminated parking minimums city-wide. 1 US Census, ACS 2019 5-Year Estimates, Table B25044 2 Adam Millard-Ball, J. W. (2020). What Do Residential Lotteries Show Us About Transportation Choices? https://doi.org/10.7922/G2319T55 3 http://lawfilesext.leg.wa.gov/biennium/2019-20/Pdf/Bill%20Reports/House/2343- S%20HBR%20FBR%2020.pdf?q=20210308171353 Internal Draft April 22, 2021 Federal Way | Housing Action Plan 6  Add Flexibility to Ground Floor Requirements What? Relax strict ground floor commercial requirements in most commercial zones to allow greater flexibility for residential uses. 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. 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 ground floor of all streets. How?  Consider applying a ground floor commercial requirement along only those street frontages that are most critical and allowing flexibility on secondary streets where street level retail may be less viable.  Implementation method: overlay district map  Couple these flexible provisions with design standards to emphasize stoops and other similar active/pedestrian-friendly ground level frontages for residential uses.  See “Update Design Standards” Case Studies  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. Wenatchee Block-Frontage Standards Map Internal Draft April 22, 2021 Federal Way | Housing Action Plan 7  Allow “Missing Middle” Housing Types in Single Family Zones What? Expand opportunities for market rate development of Missing Middle housing types such as duplexes, triplexes, and/or other small home-types in the Residential Single Family (RS) zones where appropriate. Duplexes and townhouses are examples of “missing middle” housing, connected homes that are not allowed in the vast majority of Federal Way’s RS zones (shown in yellow in the map on the right). 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 are middle-sized housing, aimed at people with middle- incomes. 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 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. This action, if adopted before April 1, 2023, is exempt from SEPA appeal. How?  Remove barriers for missing middle housing types in single-family zones.  Implementation method: code amendments and review process  Allow attached dwelling units like Missing Middle in single-family zones  Encourage Missing Middle typology of 4 units and more on lots in close proximity to schools, parks, transit stops, or commercial uses.  Allow development of duplexes and triplexes under the same process as single-family homes, rather than requiring director approval, which adds time and cost to development.  Consider applying single-family impact fees to all 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  Ensure compatibility with existing neighborhoods  Implementation method: code amendments Internal Draft April 22, 2021 Federal Way | Housing Action Plan 8  See “Update Design Standards”  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 were a top priority among survey respondents.  Revise front and side yard setbacks for duplexes, triplexes, and townhouses Case Studies  In 2019 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.  In 2018 Minneapolis amended its comprehensive plan to allow duplexes and triplexes in formerly single- family zones. Internal Draft April 22, 2021 Federal Way | Housing Action Plan 9  Increase Ownership Opportunities in Multifamily Zones What? Encourage development of market rate townhome and condominium development to increase entry level homeownership opportunities at a lower-cost. Why? Homeownership is highly desirable for many Federal Way households. It can provide greater economic security, residential stability, and an important financial asset to the homeowner. However, rising demand for homes has pushed home prices out of reach for low- and middle-income families. With a rising population and a fixed supply of land, new homeownership opportunities can best be pursued by increasing the number of shared-wall ownership options like townhouses and condominiums. Shared wall homes are also more energy efficient that 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. How?  Consider form-based code provisions in which density is governed by height limits, parking and conformance with stronger site and building design standards.  Implementation method: code amendment  Particularly, implement in downtown, high density, multifamily and TOD areas. Case Studies  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.  Townhouses have been widely built in the Puget Sound region over the past several decades. Issaquah, Redmond, and Seattle have high-quality examples of townhouses that provide ownership opportunities, high population densities, direct street-level access, and attractive visual character. Internal Draft April 22, 2021 Federal Way | Housing Action Plan 10  Encourage Accessory Dwelling Units What? Encourage the construction of market rate and accessible housing options by removing code barriers for accessory dwelling unit (ADU) ADUs are small dwelling units such as a basement apartment, garage apartment, or backyard cottage 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 lives on-site if an ADU is to be rented to the tenant. 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. This action, if adopted before April 1, 2023, is exempt from SEPA appeal. How?  Remove barriers  Implementation method: code amendments  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 possibly from 800sf to 1,200sf remove minimum size  Revise accessory use code to more easily permit ADU’s over garages.  Promote ADU development  Implementation method: permitting and promotional activities  Simplify ADU permitting through providing community preapproved ADU plans at low cost  Include plans that are designed accessibly for those living with a disability and mobility needs and that serve populations aging in place  Coordinate with ADU developers in the region for community preferences.  Establish ADU program to advertise to the community Internal Draft April 22, 2021 Federal Way | Housing Action Plan 11 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 22, 2021 Federal Way | Housing Action Plan 12  Incentivize Inclusive and Accessible Housing Options What? Incentivize diversity of market rate and income restricted affordable housing options and sizes that align with community profile and housing need. Why? Federal Way has a diverse community profile from single individuals to multigenerational families with varying housing needs. It is important the housing supply include a variety of housing sizes, designs, and typology for both renters and owners. The housing stock lacks small units like studios and unit sizes suitable for larger families. How? Remove barriers for development of smaller entry level housing options and incentivize income restricted units include a variety of sizes. • Remove barriers for ADU development to support intergenerational households and populations desiring to age in place. o Implementation method: code amendment  See “Encourage Accessory Dwelling Units” for removing barriers promoting ADU’s including accessibility needs • Encourage a balance of unit size options in such as, multifamily developments, townhouses, duplexes, triplexes. o Implementation method: code amendments and programmatic  Consider providing standards for unit size variety in developments over a certain size for owners and renters.  See “Revise Parking Minimums”  See “Encourage Affordable Housing Development” Internal Draft April 22, 2021 Federal Way | Housing Action Plan 13  Update Design Standards What? Pair all regulatory strategies to encourage new types of housing development with updated design standards to ensure compatibility and livability. Why? Design standards help ensure that new housing contributes to a community’s vision for desirable, healthy, and safe neighborhoods. While they do not create additional housing, design standards can help to mitigate impacts of density, building massing/scale, parking and vehicle access areas, and service elements. Balanced design standards should promote good design without imposing prohibitively costly standards on new developments. Federal Way’s existing design guidelines (Federal Way Municipal Code Chapter 19.115) focus on safety and orderly development. As zoning codes are adapted to encourage housing production, design guidelines should be updated for clarity, easy implementation, and accordance with best practices for livable and transit-oriented neighborhoods. How?  Develop design standards in conjunction with any Housing Action Plan-related code revisions to ensure accordance with plan goals.  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 (like weight rooms), and landscaped shared open space (like 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.  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.” Example open space standard for duplexes showing minimum width and depth Internal Draft April 22, 2021 Federal Way | Housing Action Plan 14  Encourage Affordable Housing Development 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 to very low-income individuals and families. There are a variety of options that the city can pursue, and it is likely that a combination of actions will be most effective. These actions could include alternative development standards or incentives for new affordable housing, such as: What? The City has a variety of policy and code requirements to ensure affordable housing development such as: • Inclusionary zoning requirements per FWRC 19.110.010(2) from 2 unit or 5% of total (whichever is greater) of rental units affordable at 50% AMI for developments 25 units or more for developments. • Density bonus per 19.110.010 (3)(a) One bonus market rate unit for each affordable unit included in the project; up to 10 percent above the maximum number of dwelling units allowed in the underlying zoning district. Why? Make it easier and less costly for nonprofits or other developers to construct new housing that includes units with rents that are regulated to stay affordable for lower-income residents. How?  Revise the multifamily tax exemption (MFTE) program to incentivize projects affordable to 0-50% AMI level rather than only to 50% AMI and higher as has been built recently.  Provide front of the line treatment permitting for developments exceeding minimum affordability requirements.  Identify suitable public or nonprofit land that could be donated or leased for affordable housing development  Plan For, and Invest In, Complete Communities This strategy would dedicate additional resources for Long Range Planning staff to work with residents to develop community-backed visions and plans for station areas, neighborhoods, and city as a whole. The goal of this work would be to chart a path for development and city investment which aligns areas expected to see new housing production with improvements to infrastructure, resources, and amenities. These improvements could include:  Investments in infrastructure such as lighting, roadways, transit, sidewalks, or parks.  Neighborhood-serving commercial areas with appropriate services and amenities catering to residents’ needs. Internal Draft April 22, 2021 Federal Way | Housing Action Plan 15  Analyze School Impact Fees on Multifamily Housing New population growth in a community increases demand for public infrastructure and services. Charging impact fees on new residential development can be an important tool for partially funding these growth-related needs. However, impact fees also increase the cost of providing new housing. And when the rates are set significantly higher than neighboring jurisdictions, they can discourage developers from building any new housing. Federal Way has seen no new multifamily housing development (such as apartments, condominiums, or townhomes) other than senior housing projects following the adoption of school impact fees in 2017. Stakeholder input indicates that local developers do not consider Federal Way to be a viable location for multifamily development due in part to the significantly higher school impact fees compared to other jurisdictions in the region. The primary factor for these higher rates is the number of new students generated by the new housing, which is almost six times the King County average. In December 2020 the Federal Way City Council adjusted its school impact fee rate schedule for multifamily housing, creating tiers based on bedrooms. However, the rates remain significantly higher than those imposed in neighboring jurisdictions. Implementing this strategy would include a review and adjustment of the school impact fee rate schedule for multifamily housing with consideration for consistency with neighboring jurisdictions, and 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 townhomes and duplexes. Additionally, deferred payment of school impact fees option should be allowed for multifamily developments opposed to only single family per (FWRC 19.95.055).  Support Affordable Housing Preservation Federal Way provides housing that is relatively naturally occurring affordable compared to many other communities in the region. Much of this housing is at risk of becoming less affordable due to rapidly rising housing costs, affordability requirements that are due to expire in coming years, or redevelopment pressures in light rail station areas. Maintaining existing unregulated (or “naturally occurring”) and regulated affordable housing units can often be cheaper than constructing new units (although both are needed). This strategy prevents the potential displacement of Federal Way residents by identifying opportunities to support the purchase of existing housing and ensuring it remains affordable in years to come. It builds on strategies featured in the South King County Subregional Housing Strategies Framework.4 Success will require a combination of actions, such as:  Work with South King Housing and Homeless Partner (SKHHP) network to develop a revolving loan fund for preservation opportunities  Monitor expiring regulated affordable housing properties  Monitor expiring unregulated “naturally occurring” affordable housing properties  Require notice of intent to sell for properties with rents under certain amounts. -4 ECONorthwest, 2020. South King County Housing Action Plan – Task 3.2 Housing Strategies Framework. Commented [SM1]: Consistency with neighboring jurisdictions is NOT part of the formula calculations. I would prefer this be struck from the notes. Commented [SM2]: Supportive of this clarification (although at times the single family fee can be higher than the multi-family fee) Commented [SM3]: Can you provide information about the single family “deferred payment”? I wasn’t aware there were any deferred payment option. In general, the District objects to this as an option, as the cost of providing capacity occurs prior to occupancy in order to permit and install portables (6-8 months). Internal Draft April 22, 2021 Federal Way | Housing Action Plan 16  Establish a Manufactured Home Park Zone What? Establish a new zone and apply it to all or some of the mobile and manufactured parks in Federal Way to support displacement prevention and/or mitigation. Why? Manufactured Home Parks (MHPs) provide natural affordable housing in Federal Way including a form of affordable homeownership. The availability of mobile and manufactured housing has been decreasing across King County as park land is redeveloped into less affordable housing or other uses. Redevelopment of Federal Way’s manufactured home parks would cause displacement and significant hardship of low- income households including many senior households. How and Where? Currently, Manufactured Home Parks are an allowed use in Federal Way’s multifamily residential (RM) and single-family residential (RS 5.0) zones. Federal Way has 7 manufactured home parks with approximately 1,018 homes. Establishing a Manufactured/Mobile Home Park Zoning Designation can prevent park closures and displacement of park residents by limiting the ability of the land to be converted into another use. A manufactured home park zoning designation would require the landowner to have the property rezoned before attempting to develop it. This creates an opportunity for the City to preserve affordable housing in the community by preventing the conversation of manufactured home parks to other uses. A new Manufactured Home Park zoning district can be established for all or some of the City’s existing Manufactured Home Communities to ensure that goals for the preservation of affordable housing are balanced with other policy objectives such as transit-oriented development. Case Studies  City of Kent. 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.  City of Kenmore. Kenmore created a Manufactured Housing Community (HMC) Zoning District to preserve MHCs 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.  City of Tumwater. Tumwater created a Manufactured Home Park land use designation and zoning district. Internal Draft April 22, 2021 Federal Way | Housing Action Plan 17  Strengthen Tenant Protections The Housing Needs Assessment found that, 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 patterns in other South King County communities. Eviction is an extremely traumatic and disruptive event that can often result in homelessness and/or prolonged housing insecurity. Evictions also disrupt the social fabric in neighborhoods where households are forced to leave their homes. 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. This strategy calls for the city to review and evaluate these new tenant protections and determine if additional actions are needed to improve their effectiveness at preventing evictions and providing housing stability. This evaluation should include engagement with affected community members. Additional actions could include supporting expanded access to tenant education and legal assistance or developing a relocation assistance program to mitigate impacts when displacement cannot be prevented. These kinds of actions could be implemented through partnerships with nonprofit providers or neighboring jurisdictions through SKHHP.