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2021-05-19 Planning Commission PacketCommissioners City Staff Lawson Bronson, Chair Tim O’Neil, Vice-Chair Keith Niven, Planning Manager 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 K:\PLN Planning Commission\2021\Agenda\Agenda 05-19-21.docx City of Federal Way PLANNING COMMISSION May 19, 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 May 5, 2021 4. PUBLIC COMMENT 5. COMMISSION BUSINESS a. Discussion – Informational Briefing on Short-Term Rentals 6. STAFF BUSINESS a. Manager’s Report 7. NEXT MEETING a. June 2, 2021, 6:30 p.m. – Canceled b. June 16, 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 May 5, 2021 CITY OF FEDERAL WAY PLANNING COMMISSION May 5, 2021 City Hall 6:30 p.m. Zoom MEETING MINUTES Commissioners present: Tim O’Neil, Wayne Carlson, Diana Noble-Gulliford, Tom Medhurst, Dale Couture, Eric Olsen, Jae So, and Anna Patrick. Commissioners absent: Lawson Bronson (excused) and Hope Elder. City Staff present: CD Director Brian Davis, Planning Manager Keith Niven, Associate Planner Chaney Skadsen, City Attorney Eric Rhoades, and Administrative Assistant II Tina Piety. Consultant Kevin Ramsey BERK Consulting. CALL TO ORDER Vice-Chair O’Neil called the meeting to order at 6:30 P.M. MINUTES The April 21, 2021, minutes were approved as presented. PUBLIC COMMENT None COMMISSION BUSINESS Discussion, Housing Action Plan (HAP): Strategies Implementation –Planner Skadsen delivered the staff presentation. This is for information only. She introduced the consultant Kevin Ramsey from BERK Consulting. Planner Skadsen commented that the city has been working on this effort for over a year. Overall findings include that the rate of housing development is not keeping up with the demand and there is a lack of variety of housing type and affordability. She reiterated the HAP objectives, which are: Promote new housing development that expands housing choices and is inclusive to community needs. Encourage homeownership opportunities and support equitable housing outcomes. Plan for continued growth and ensure that the built environment promotes community development and increases the quality of life for Federal Way’s existing and future residents. Preserve the existing affordable housing stock to prevent displacement pressure. Eight strategies were developed to achieve these objectives as follows: Planning Commission Minutes Page 2 May 5, 2021 1) Promote a dense, walkable, mixed-use City Center as a complete neighborhood. 2) Promote mixed use, walkable, subareas and neighborhood centers. 3) Increase diversity in housing choice through expanding missing middle development opportunities. 4) Encourage Accessory Dwelling Unit (ADU) production. 5) Ensure that financial and regulatory incentives for mixed-income housing are effective. 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) Protect tenants through the development of a rental housing inspection program. Planner Skadsen then turned the presentation over to Consultant Ramsey to discuss the proposed Implementation Matrix and Priority Schedule. Consultant Ramsey stated that housing strategies are interrelated and work together to encourage new development that addresses housing needs. Some strategies are dependent upon others to be effective. The Implementation Matrix and Priority Schedule breaks down each strategy into a set of actions the city can take to implement each strategy. For each action, the matrix includes: Priority (short-term, medium-term, long-term). Level of effort: rough measure of the amount of staff time or resources needed to implement. Duration: estimate of the number of years it will take to implement. The lead department responsible for implementing, as well as any partners that will be essential for success. Measures of success: Including benchmarks for implementation as well as measures of actual impact in the community. City staff can use this document to develop a workplan and allocate resources needed to carry out implementation of the HAP. He then went over the proposed implementation actions (short-term and medium/long-term) for each strategy. For each one, he included an example of how a similar strategy is working in a different jurisdiction. He noted the state is encouraging ADUs. Strategy #5 refers mainly to multifamily housing. Federal Way does have some incentives that encourage mixed-income housing, but they are not being used. Consultant Ramsey commented that the city first needs to show that market-rate multifamily will work in Federal Way; then low-income can be encouraged. Commissioner Noble-Gulliford had a question on impact fees. She noted that there are apartment complexes in the works (DevCo and one on 348th & 1st). The needs of our school district and their taxing authority are different from neighboring districts. A bond for 450 million was approved a few years ago, but it doesn’t address all the district’s needs. How should they make up the difference with or without school impact fees? Consultant Ramsey stated that the school impact fees may only be used for new development. The new development will help support the district’s current needs. It is a balancing act. Commissioner Noble-Gulliford asked in regard to the city’s proposed rental inspection program, how does it compare to the current Landlord Tenant law? And in regard to the cost, who will pay? Planner Skadsen replied that the program is in the midst of being developed and these issues haven’t been dealt with yet. Vice-Chair O’Neil asked if the addition of specific goals (say so many ADUs by 2025) has been considered, or is this the Council’s job? Consultant Ramsey replied that some communities do have specific goals. The city is in the process of adopting growth targets that could be used to develop goals It is a policy choice the city can make. Vice-Chair O’Neil encouraged the creation of specific goals because it will be the best way to determine the success of our work. Planning Commission Minutes Page 3 May 5, 2021 Commissioner Medhurst commented that ADU’s seem more popular in city center then other city neighborhoods. Are they providing affordable housing or just allowing affordable in the city center? If you leave out the downside (impact fee) high density mixed-use seems our best option. Planner Skadsen stated that ADU’s are popular for those downsizing. Consultant Ramsey commented that there is a large supply of single-family homes with many bedrooms and only one to two people living there. If the city allowed it, they could use the additional space as an ADU. ADU’s could provide a cheaper way to live in a single-family neighborhood. They could provide additional housing without a radical transformation of the neighborhood. Vice-Chair O’Neil stated that in his experience people create an ADU for family, not to rent it out. Usually it is a new owner who rents it out. Changed regulations may encourage rental ADU’s. Consultant Ramsey said that in Seattle some people worried that allowing more ADU’s would negatively affect neighborhoods, but that hasn’t happened. He has seen some homes Seattle where the builder included an ADU, but they are rare. STAFF BUSINESS Manager’s Report – Vice-Chair O’Neil asked about the status of the IRG developments. Director Davis replied that the city has three applications for the property. SEPA and land use approval have been issued for the first application. The SEPA and land use were appealed, but upheld with conditions. One condition was to obtain required federal permits and they are working with the Corps of Engineers to do so. Once this is completed, they will submit their building permit application. For the second application, SEPA has been issued and land-use is still under review. The third application is working on SEPA. Manager Niven has prepared a calendar with tentative Planning Commission topics and dates for the remainder of the year (enclosed). Not every meeting date has a topic and he encouraged the Commissioners to make suggestions of topics they feel should be considered. The meeting was closed. NEXT MEETING May 19, 2021, 6:30 p.m., Zoom Meeting ADJOURN The meeting adjourned at 7:37 P.M. K:\Planning Commission\2016\Meeting Summary 04-21-21.doc 2021 Planning Commission Tentative Calendar Topics May 2021 Date Potential Topic May 5 HAP May 19 Briefing on Short-term rentals June 2 June 16 HAP Hearing Sign Code Amendments (Tentative) July 7 July 21 Briefing on Comprehensive Plan Docket August 4 Briefing on Downtown planning August 18 September 1 September 15 Comprehensive Plan Amendment Hearing October 6 Comprehensive Plan Amendment Hearing Continuance (if necessary) October 20 November 3 November 17 December 1 Training Commission Elections December 15 Department of Community Development 33325 8th Avenue South Federal Way, WA 98003-6325 253-835-2607 www.cityoffederalway.com Jim Ferrell, Mayor Memorandum To: Planning Commission From: Keith Niven, AICP, CEcD Date: May 19, 2021 Re: Informational Briefing on Short-Term Rentals Meeting Objective Staff will brief the Commission on Short-Term Rentals and why the city might be looking to adopt additional regulations. Background For this Memorandum, the term “Short-Term Rentals” shall include Airbnb, FlipKey, HomeAway, Vrbo, and other internet-based short-term vacation rental platforms, as well as private parties utilizing single-family or multi-family dwellings in the city for short-term rentals. The Federal Way Revised Code (FWRC), Title 19 (“Zoning and Development Code”), does not specifically address short-term rentals. In absence of a specific code direction, in 2007 Community Development issued an Interpretation (07-105266-00-UP) relating to allowing vacation rentals in single-family residences in the city. That interpretation stated: “A vacation rental residence shall be an allowable use in a single-family residential zone based on meeting requirements related to maximum occupancy, number of required parking spaces, and signage; availability of local property representative; notification to homeowners’ association; obtaining all required licenses; and having weekly solid waste collection.” In 2019, the state passed legislation addressing short-term rentals (RCW 64.37). Definitions are provided in RCW 64.37.010 clarifying that: 1. It is not a hotel, motel, bed & breakfast, inn, or timeshare. 2. It applies to rentals of 30 consecutive nights or less. 3. It does not apply to owner-occupied dwellings where fewer than three rooms are rented at any time. RCW 64.37 also provides for consumer safety (RCW 64.37.030) and liability insurance (RCW 64.37.050). Planning Commission May 19, 2021 Informational Briefing on Short-Term Rentals Page 2 of 3 Although the city’s code interpretation may have provided adequate direction 14 years ago, and the recently adopted state statute provides added clarity, the number of short-term rentals in the city has increased and the City Council has asked staff to lead a policy discussion with the City Council on this topic. This issue was briefly discussed at the April 5, 2021, Land Use and Transportation Committee meeting and is scheduled for the July 6, 2021, Council Special Meeting. There are many reasons the city may want to consider the adoption of code to better manage the use of short-term rentals in the city. These reasons could include the following: a. Collecting missed revenue I. Lodging Tax II. Permit License fees III. Business License fees IV. Fees for violations b. Controlling nuisance Issues I. Noise II. Parking III. Vandalism c. Limiting community impacts I. Turn stable neighborhood into a transient community II. Property values III. Remove potential affordable rentals from the community IV. Impact on local hotels and bed & breakfasts d. Protection of health and safety I. Safe building/room egress II. Working smoke/CO detectors As the city contemplates the need for managing this activity, the degree of regulation could vary from prohibition to taking no action except for monitoring. Planning Commission May 19, 2021 Informational Briefing on Short-Term Rentals Page 3 of 3 Next Steps 1. Staff is scheduled to make a presentation on this topic to the City Council on July 5, 2021. 2. Should the Council desire additional regulations to be applied in the city, staff will work on writing an ordinance and developing an implementation strategy, returning to the Planning Commission for a recommendation.