Planning Commission - Regular Meeting

Arsene, we're ready.

All right, everybody. Thank you for being here. Hello. Hello. Hello. Hello. I know. I know. So we just got caught off guard, but we are actually live right now. So welcome to this evening's Planning Policy Commission. I wasn't ready for it either. We're going to call this meeting to order. It's currently 6.31 p.m. Today's meeting is a hybrid meeting. The Planning Policy Commission is in person, but staff or members of the public may be attending virtually or in person. I should have attended virtually, thinking of what's going to happen in about a half hour. Staff, do we have a quorum this evening?

Yes, we do.

Excellent, thanks Kristen. Okay, first item of business is to approve two sets of minutes. And the first set of minutes is for the May 28th meeting. As you may remember, we had some technical difficulties, so these meeting minutes are coming to us almost a month later. Having reviewed them, does anyone have any concerns? Any corrections? Okay, seeing none, those meeting minutes are approved. And next we will I look at the June 11th meeting minutes. Same questions, any concerns? Any corrections? Okay, the June 11th meeting minutes are also approved. We're gonna begin this evening with public comment. These are general public comments at this time for the commission or any of the regular business items we have on tonight's agenda. Has anyone signed up to make public comment this evening?

Yes, Chair, they have.

OK. We're going to offer some guidelines very quickly for our commenters. And for all those who would like to speak, we ask that you speak clearly and pause frequently. Please state your name each time before speaking. If you're attending virtually or by computer and you would like to speak, we ask that you also mute your microphone when not speaking. And if you're having any technical issues, please try joining the meeting using a different device, such as a smartphone or tablet. You can use the call-in information in the meeting invite to call in. This is an important part of the planning policy's public process. We take them seriously, are factored into the decisions that we make. Again, these comments could be general or anything on the business agenda this evening. We do ask that everybody limit their comments to five minutes or less. Okay, moving along. Who's our first speaker?

Carl Short.

Good evening, Commissioners. Nice to see you all again. My name is Carl Charette, Senior Director of Development with Avalon Bay Communities, representing NAOP and our Coalition of Housing Developers. As always, I want to thank the Commission and staff for the work you all are doing on the Promoting Building Investment Program. The PBI is crucial. It is the City's opportunity to focus on the items that move projects closer to feasibility, to actual groundbreaking, and ultimately to completion, resulting in an increased diversity of housing options for Issaquah residents. Today, Issaquah's regulatory framework is not producing housing at the pace we all want. Mandatory inclusionary housing requirements at low AMI levels that lack meaningful incentives have stalled development across the city, resulting in neither the market rate nor the affordable housing the program originally envisioned. That economic reality is clearly documented in the Eco Northwest report that the city commissioned and that you all have in your agenda. Viewed through the lens of prospective Issaquah residents, the city's current inclusionary program is asking residents in market rate apartments to carry the brunt of the cost of new affordable housing, upwards of $200 a month. This is not a viable model for a housing abundance in an environment of scarce capital. The conclusion is straightforward. It's time to revisit this program and consider recalibration for today's market conditions, as many of your peer municipalities are now exploring. Affordable housing requirements coupled with multifamily tax exemptions remain one of the most meaningful levers the city has to reinvigorate development in Issaquah. We would strongly encourage you to direct staff to advance a recalibrated MFTE program, one that is more broadly applicable with a 10% set aside at 80% AMI and without permanent affordability. That's a structure that the market can actually support as evidenced by strong demand for projects in the recently rezoned and recalibrated program in the Wilburton neighborhood of Bellevue. In parallel, the density bonus program needs to be recalibrated so the incentives are real. Today, for example, bonus density largely gets consumed by parking due to the city's high water table. It doesn't necessarily translate into more housing and should be thought of less as a bonus and more as a project requirement. We urge you to use this moment to improve these programs. These are well-established tools that can materially increase housing production if structured correctly. Thank you again for your time and leadership.

Okay. Thank you, Carl. I believe we have someone else. All right.

Christie triple. Sorry.

I haven't been here in a while. good evening planning policy council members i'm christy triple mvp for community development with rally properties here in issaquah rally properties has been part of the community for more than 70 years we have a 30-year development agreement with the city to redevelop our rally center and highland crossing neighborhoods over time I have also had the privilege of serving on the Esquire Chamber of Commerce Board twice, the Transportation Advisory Board, and the City's Economic Vitality Commission. So after working in this community for a very long time, I've attended more public meetings than I can count. So I've seen a lot. As Kristen knows as well. But I'm here tonight to talk about both agenda items. First of all, we second Carl and Nayop's sentiments. I'm here tonight with my peer because not only that we have a development agreement, but it's because we care about the broader future of housing here in Issaquah. We want to see housing created for people at every stage of life. whether they're moving here for the first time, downsizing, returning from college to begin their careers or to raise their own families. We want to thank the city staff and the PPC for undertaking the promoting building investment program. This is important work and a timely opportunity to fine tune title 18. We know it was a heavy lift, but there's also an opportunity to better facilitate high quality housing. That work is critical. We had agreed with Eco Northwest findings and we were disappointed that the recommended additional analysis was not pursued. We recognize, however, that does take time and money, but fast forward to today, you have something equally valuable. Developers and partners who are here actively wanting to invest in ISCWA and who are willing to share firsthand experience about what works and what other jurisdictions are doing successfully to encourage housing production. We all know that Issaquah presents unique development challenges that no one can control, including the high water table, critical areas, and other site constraints. What the city can control are the policies and the incentives that you're discussing tonight. We encourage you to seize this opportunity to strengthen the MFTE program, inclusionary zoning and development incentives. These are proven common sense tools that can meaningfully increase housing production and that will help the city achieve its housing goals. Choosing not to make such improvements, I think, unfortunately, would send a clear message to the development community that housing production isn't a priority. So we do appreciate your work. We know it's hard. It's a heavy lift. And you've already been through a big one with Title 18. So we appreciate you taking a look at that. And then one last thing, I'd like to speak to the second agenda item, which you'll hear further from Kristen on the urban village purpose language proposed edits. As a customer of the city with the development agreement and a partnership with the city, we are not aligned with the proposed change of language and we would request that it remain the same as adopted in the 2021 comp plan and at the time we had adopted our development agreement. And the reason for that is simple. Each development agreement is unique to its own and its purpose is grounded in the comp plan. And so it's important to remember that they are legally binding contracts with the city great to have an overarching description.

But to get too far in the weeds with a purpose statement, I think, is a little too much.

Anyways, thank you for your time. Appreciate it. And look forward to your conversation.

Thank you, Christy. Would anyone else like to speak?

There are no more, and there is no one online as well.

Okay, well, I want to thank Carl and Christy for sharing their comments with us. That will conclude our public comment. So we are going to move on to regular business. And we have two items this evening for regular business. And the first is a presentation from Principal Planner Kate Keeney and Senior Planner Emily Medina on proposed policy and code amendments related to the comprehensive plan amendments. One and two. regarding land use designation descriptions and changes to the names of residential zones. Kate and Emily, when you guys are ready, please go ahead.

One moment, please. Okay. And can anyone see that on the screen? Oh, sorry. Great. Okay, here is the presentation. Thank you, Chair. I am Kate Kaney and am here with Emily Medina. I will start the presentation and then we will switch places. So we are back to talk about proposed amendments for these final docket items. We did an introduction session on May 14th, I believe, And tonight we're back with actual proposals that were in your packet, policy proposals as well as proposals related to the code. One thing noted in your packet was that both of these amendments look at land use designations and zoning and so The amendments share some of the same changes, even though they were separately proposed. So that's something you may have seen. So I'm going to go ahead and start talking about the land use designation descriptions, adding those back in, and clarifying what the implementing zones are for those designations. So the Overall intent really was to clarify what land use designations really mean, what their purpose and intent are for the city. It's helpful, developers come in, look at the land use map and are not really sure. You can see the existing nine designations that we have to the right of your screen. Some of the questions we would get would be about what is retail exactly, What does commercial allow? And so those are some of the clarifications that we talked to you about earlier. It's all about making sure people understand what these land use designations are, where and how are we going to grow, how are we going to implement the vision in the comprehensive plan. So now I'm going to go ahead and talk about some of the proposals, starting with the land use map. Many cities call these flumes or future land use maps. We call it the comprehensive plan land use map, and it identifies land use in the city now and in the future. And this map is implemented by the zoning map and the zones. So what you see are proposed changes to the legend on the left of your screen. And one of the rationales behind some of these changes was not only to make the purpose and intent of the land use designations clear, but also to increase alignment with the land use code and the way the zones are described. So as you may recall, we talked about how there are five categories of zones, including residential, mixed use, commercial, urban village. And so in some of those cases, it was difficult to see the direct alignment between some of the zones, some of those zoning descriptions and categories. So our intent, again, was to clarify all of that with these new names. So what are the changes? We maintain conservancy, community facilities, community facilities privately owned. But then we made some changes specifically to residential, low density residential was mainly covering the single family zones. We'll be talking about those name changes again. But because of the middle housing amendments from last year, we want to make sure that low density residential didn't just mean single family to people. That residential also could better incorporate the meaning of middle housing as well as single family uses. So residential was the name we settled on. That residential designation is aligned with the residential zone category in Title 18. So then, the mixed use category in Title 18 was looked at, and we looked at the content of zones, we looked back at the descriptions of land use designations from former comprehensive plans, and we came up with three mixed use categories. Mixed use residential, primarily a residential category, mixed use medium, and mixed use high. Again, to get that alignment with the mixed use zone category in Title 18. Urban Village also is part of the mixed use zone category as well as its own thing. And then we had a category, or sorry, a land use designation called commercial. And it's implemented by intensive commercial zones. And because it mainly allows light industrial and mineral resource type uses with some heavy commercial or intensive commercial uses, To clarify what was allowed in that designation, we're proposing changing it to industrial. So this is where we landed on the nine land use designations. Oh, I just also want to mention, so not only are there proposed changes to the legend and the land use designation names, but also in the map, we haven't been able to change the colors of the map. We don't want to do that until you all have, and council has made some decisions and confirmed our direction. we will probably need to change some of the colors on the map to ensure that we have zones in land use designations and the color coding correct so that everything is aligned. So we'll come back with that. So let's go ahead and take a look at some of the key amendments in the land use and sustainability element of the comprehensive plan. This is the table of contents for that chapter. And as you can see, what's noted is where changes are proposed. So in your packet, in the existing conditions section, you may have seen some changes to the introduction to some data and diagrams. And there was language there about the land use map that was repurposed for one of the new sections I'll talk about in a second. Then the main changes under goals and policies were really in the first three sections that you see. Growth management, an existing section. I will go through that on the next slide, what the changes are proposed for that section. And then there are two new sections of the land use element that are proposed to help tell the story of growth and the purpose and background of the land use designations. And that's a new citywide growth strategy section and a section specifically that confirms and establishes the land use map and the land use designations. So that's really the list that I can share with you of changes. So now let's go one by one through what is proposed. And again, these are the key changes. There are some minor changes that were in your packet that I'm not going to go through. So this is that growth management section that starts off the land use chapter and what this section does is talk about how the city needs to maintain an adequate supply of appropriately zoned land to accommodate the projected growth that is identified in the King County countywide planning policies the CPPs so that was a process through the periodic update adopted in 2024 the adopted growth targets there are housing targets and there are job targets So what is proposed to be added underneath the diagram is a policy that helps explain what the diagram is. And so what's proposed is language that says plan to accommodate at least 35 additional housing units and 7,950 additional jobs between 2019 and 2044, the time horizon in the CPPs, as established by King County. It's just clarification about this is what the city's going to plan and accommodate for over the next 20 plus years as part of the background first. So what's the job of the land use designations then? How should we describe them as part of that story? The next slide talks about the new citywide growth strategy section. If you looked at some of the other cities and their comprehensive plans, many of them have a section that just goes right out and says, this is how we're going to grow. In the past, you might have a very general policy in your comp plan, and then maybe some of your sub area plans would tell the story. So to help clarify, you know, our understanding of, you know, where and how is the city going to grow? What are the land use designations going to help implement? This new section is proposed. So the goal is to talk about continuing to guide new growth and development to support thriving and sustainable neighborhoods everywhere in the city, throughout the city, and that they provide a variety of housing, jobs, services, and amenities for local communities. So that's sort of the high level. So then, like most of the sections of the comprehensive plan, there is a discussion, a section, and it talks about kind of the goal and the policies and it provides more context. So the context here is that, you know, the city is planning to accommodate most of the future housing and job growth within four neighborhoods, Central Issaquah, Issaquah Highlands, Tallis, and Lakeside. Now, we're trying to be as specific as possible, but is this the whole story? Still digging in, still might do some wordsmithing as we're looking back at the data. Maybe TALIS doesn't belong here because they're pretty fully developed, right? So we're just going to do a double check on that. But again, the idea is to tell a clear story about where and how the city's going to grow. Part of that story is that While most of the growth is gonna come into these four, three or four neighborhoods, the majority of all new growth is to be focused within the Central Issaquah Urban Core Regional Growth Center. We're working on that other comprehensive plan amendment about the RGC and this helps give policy basis for that growth. It helps describe the story. Additional growth will come in the city's other neighborhoods, including Old Town. And the reason is, you know, for revitalization, you know, just growth will come everywhere. It's equitable. That aligns with our other policies, but just in line with existing land use patterns. So that's a summary of the narrative in the discussion. So that is the precursor to the proposed policies. The first policy, again, to bolster that RGC, you know, Puget Sound Regional Council designated growth area. The idea is that, you know, focus most of the city's housing and job growth within the designated RGC within a walkable, equitable, transit-oriented community or set of communities. The next policy that's proposed is to talk about, well, you know, it's not just in one place that's going to grow. Allow growth outside of that urban core regional growth center and mixed use in residential centers and in the city's other neighborhoods as appropriate to ensure there's equitable access to opportunity, right? Diverse range of housing, jobs, services. Again, wordsmithing to confirm that, you know, should we have the names of those other neighborhoods? What's the real growth amount? That kind of thing. So also in the new growth strategy section, these last two talking about ensuring that future growth is supported by infrastructure and services. That's key. That's reiterated in other parts of comprehensive plan. And also recognize and plan for the unique role and character of our neighborhoods and really enhance and maximize our existing community assets even as we grow. So that is what is proposed in that new citywide growth strategy section. All right, so now this is where the land use designations will go, as well as information about the land use map. So the goal that is proposed is to achieve the city's preferred land use pattern as it's illustrated within that land use map by establishing and maintaining land use designations and implementing zones. This is to really create a new section for where all those descriptions can land, make it clear what we're trying to do with it. Also in land use policy AB1, we're going to work on the numbering, You know, it clearly establishes that, establish the general location and intensity of land uses through the land use map and where you can find the land use map because it is in the exhibits to this chapter. Another policy, define land use designations in their implementing zones according to this table below. And I'm just going to let it pop up here. So the table was in the memo and there's a lot in there. There are a couple of errors that I'm gonna highlight as we go through, and I'm just going to summarize what's in them. And I wanna share that many of the land use designation descriptions are from the 2014 comprehensive plan, which I believe was the last time the city had these descriptions in a chart with their implementing zones. And I think there was a streamlining process where those things were removed since then. So 2014, for this description of conservancy, purpose of the designation is to protect and preserve natural systems, et cetera. What zones are implemented by this designation? Community facilities and community facilities privately owned. These descriptions also from that 2014 comprehensive plan Providing areas for public benefit uses on public property for community facilities and then privately owned is to show and identify land owned by private entities or nonprofits dedicated to providing civic, cultural, et cetera, services to the public. So again, descriptions that help provide context. So next is the... was the low density residential designation proposed to change into residential so that it can not only speak to promoting single family but also middle housing uses, right? And so this description, I'll read some of it, was partially taken from the 2014 comp plan and also refreshed with some of the goals that we have today, especially regarding allowing middle housing. So the purpose of this designation is to provide a lower density residential environment that promotes high quality housing and a diversity of housing types. And then it goes into say specifically allow single family, middle housing, et cetera. And you will see to the right the new names for those single family zones. And my colleague Emily Medina will go through that when we talk about comprehensive plan amendment two after I present this information. So let's go ahead and turn from the residential zone category, sorry, residential land use designation. And that again aligns with the residential zone category in title 18. And now we're going to turn to the mixed use designation starting with mixed use residential. And that is the revised version of the multifamily residential existing designation. So the purpose of this designation is to provide medium and high density multifamily neighborhoods with a variety of urban services and commercial and other complementary uses. This language aligns almost exactly with what is in Title 18 in the zone descriptions for multifamily medium, multifamily high. So you will see in the implementing zone to the right of your screen, that we removed urban village multifamily from this implementing zone of the old multifamily residential. And actually, I should mention, put it into the residential zones because of the types of uses that were allowed. It did not allow commercial or mixed use. So that's why it landed there. So let's go ahead and talk about mixed use medium. So the purpose of this designation is to provide areas with a mix of retail, commercial, office, residential at a medium to high scale and density. And then also has a note about the cultural business district zone in Old Town. and some other information. And then on the implementing zones to the right, you can see some yellow highlights where there were some inadvertent errors in your packet. So I just want to be clear about which zones implement this designation. UVMUR was supposed to have moved to mixed use high. So sorry about that error. And Village Residential was supposed to be in this category. And just as a double check, because I know this is a little confusing, we wanted to show you why the zones that are proposed should be in this designation as an implementing zone. So you can see the heights and density information and whether staff feels it's a good fit for a mixed-use medium. So that would include village residential at the higher end of mixed-use medium. Okay, mixed use high. So the purpose of this designation is to provide that mix of uses at higher scales and densities to create vibrant urban environments and describes that the urban core zone promotes the highest scale and intensity of development in the city, that one of its goals is to create pedestrian transit-oriented communities within the RGC, also highlighting that and helping to bolster other policies on the RGC that we have. So the zones that implement this designation are to the right. Also, just as a double check, it's hard to understand what's involved with all those zones, so we thought this might be helpful. You can see mixed use, mixed use central Issaquah, urban village, mixed use residential, and the urban core zone, starting with the lowest intensity to the highest intensity zones. So that is that double check for you. All right, so now let's turn to the urban village zone. So the land use description that you see proposed here was from the 2014 comprehensive plans intent statement for this land use designation. And you can see the zones are the urban village zones indicating where the city has development agreements. This map's about to pop up on your screen. So you can see to the left of the screen Urban Village Rowley is in that central Issaquah area in that brown cross hatching. And Urban Village Lakeside to the right in the brown and white stripes. And then just the Urban Village in those brown lots over there in the highlands. So just to locate those for you. So we got some input about the proposed designation description. It aligns very closely with what is in Title 18. And again, this is from the 2014 Comprehensive Plan, and you can see, barely, maybe, to the right, the land use designation intent statement matched what I showed you on that blue screen with what was proposed. But it was raised to our attention that there's some really good language and maybe even better language on the left side of your screen. Under the land use designation and districts just kind of the titles for the designations i'm going to go ahead and read some of it because it's helpful it talks about the urban village designation recognizes that that master planning of larger parcels provides the opportunity for mixed use development clustering and phasing etc and that the designation is implemented by the adoption of a uv development agreement and uv zoning by city council There's some additional information on there, but these keywords, you know, promoting innovation, mixed-use zoning, and information about the development agreement is helpful. It was not part of the intent statement or the description from 2014, but we're thinking it should be considered perhaps as more viable or more accurate than what we were proposing initially. So I want you guys to think about it and we'll have some discussion about it where we can look a little bit more in our Q&A, which will happen shortly. Just wanted to point that out. Okay, so coming up to the end. The change to the commercial land use designation to industrial is here with the land use designation description that was from the 2014 comprehensive plan. Purpose of this designation is to provide areas for intensive commercial services, light industrial uses, and mineral extraction and processing. You can see to the right that we're not going to change the abbreviation for the zones, but IC turns from intensive commercial to industrial commercial. And Industrial Commercial Central Issaquah would also be a change. The idea is to really clarify what type of uses are allowed in this area. So, some considerations as you're thinking about questions. You know, were those proposed amendments clear? Are changes or additional information needed? You heard that we are thinking about some potential language changes. I can turn back to slides if you want to see them. or if you are just ready for the next part of the presentation, just let me know.

All right, well, thank you, Kate. Do we have any questions? We'll start with questions. Any questions for Kate? Yeah, Commissioner Zakaroff.

Thank you. Well, I was listening to the presentation. Thank you so much, Kate. And I was also listening to the public comments before the presentation, and I would really... Well, first, I do have a question. Why do we returning from the 2021st to the 2014? So, yeah.

And that... So there was not, to my knowledge, a 2021 Comprehensive Plan Amendment. I think there were some ordinances, maybe, but the language that... we received as part of the comments today are from this left hand section of the 2014 comprehensive plan amendment. So I'm not sure if additional things happened in 2021, but it's the same language that was shared with us earlier.

Thank you. And then the second question that I would have, while I kind of like it, to me it clarifies how it's now all of the residential zones are marked, so that's clear. I do have a question about the urban village, and because I had a chance to compare the previous explanation and current description, and why do we, it feels like there was like specifically developers were kicked out of that. So the development agreements that had a real designation, they kind of were kicked out, which I can understand why developers might be here and may be concerned about that. Thank you.

Sure, thank you for that.

Well, it can be a comment, yes. I understand why they're concerned and I would think that we might want to combine and to maybe... The previous language was clearer to me because I read both of them several times and it was clear to me how it was before.

Yeah, and it's a pretty unique designation and when we were sent this information, it was helpful to see I dug a little bit just to see, oh, where did this come from? And when I was working through this, the policy statement, the intent statements are the ones to the right on your screen here. But the detailed information about this is done through development agreement, that's helpful. Definitely want to pull that in. Discussion about mixed use. So we want to review this. We think it seems like there's a lot of good information in here to bring forward. If you all want to take a moment and share whether you think we should use that left-hand column information rather than the right-hand column information, that would be helpful, or a combination that would be helpful for us to know, or we can bring it back the next time we come and give you more time to think about it.

Please, Commissioner Zachroff.

Thank you. They both look different from what was kind of like provided according to the 2021st.

Well, so 2021, I think was, I think maybe it was just an ordinance because I don't believe there's a comp plan amendment process.

Yeah, we removed all land use designation descriptions in the 2015 version of comprehensive plan.

because we were just like the comment that we were provided that it has specific kind of like, uh, names of designated developers there.

So, um, I think that may just be an, I can tell you that the information that was attributed to 2021 that we were emailed earlier is exactly the same as what you see on the left hand side of your screen from the 2014 comprehensive plan. It's the same language. It's not in the intent statement section to the right. It was more of informational. But again, it seems very appropriate for the description of what's happening today and with the development agreement information useful. So again, if this kind of input you like, That version, you think a combination of what's on the left-hand of your screen and the right-hand of the screen is better. We're open to, we really want to hear what you guys think.

Okay, thank you.

Any comments? Can you switch back to the map related to this one real quick? I guess one comment I would have in relation to the language in agreement that the, I guess the 2021 ordinance language makes sense given the development agreements. It looks like since then though, I'm curious if the Highlands and Tallis are now no longer urban village or are they part of a development agreement?

No, that development agreements, those two development agreements sunsetted in 2018 and then they just became part of our regular land use code.

Gotcha. And that became just urban village?

No, now they're just the Issaquah Highlands and Tallis.

Gotcha. So do they need to be called out in the language as Tallis and Issaquah?

They are neighborhoods on our neighborhood map now. So we have the Issaquah Highlands neighborhood and the Tallis neighborhood, but they're not urban village. They're not zoned urban village anymore.

So if you were to go back to the language one more time, at the very end of the left-hand column, it mentions TALIS and Issaquah Highlands. So we could remove those, I think is what I'm saying. Yes, thank you.

Yeah, we would definitely bring it up to date. That's a great point.

But that being said, I understand and agree with the UV, Rowley, and Lakeside due to the development agreements. Yes, thank you.

Thank you, Vice Chair Patterson. That helped clear something up for me. Okay, any other comments? All right. Thank you, Kate.

Great. All right. So I'm going to go ahead and hand over the slides to Emily.

Good evening commissioners, Emily Medina, senior planner, and I will go over comprehensive plan amendment number two. Um, this one, if you will recall is clarifying names of residential designations and zones. So the key goals for this amendment is that our low density residential land use destinations and what is right now known as our single family zones need to be renamed to better represent their capabilities and the locations of what kind of housing can go in these zones, which is now more than single family housing and includes middle housing, as well as undertake any additional updates as necessary to make sure that our designations and our zonings and internal policies and codes are all consistent. So looking at our Title 18 broken down into its separate parts here, the main code amendments are gonna occur in Title IV, which is our zoning section. The main ones being the establishment of zones and then the zoning descriptions themselves. Pretty much every single other section of our code will be touched, but it will mostly just be the name change from single family to residential. Whereas with the establishment of zones and the zone descriptions, there's going to be more language changes to reflect consistency with the land use designations that Kate told you about. So what are our new zone names, proposed zone names? We are essentially removing single family, the word single family and replacing it with residential to try to keep us close to what our zone names are now. So conservancy residential becomes residential conservancy. And then the main ones that are changing are single family small lot, or excuse me, single family suburban is becoming residential large lot. And then single family duplex is becoming residential old town as that zone is only located in old town. And then you'll see the urban village just switching order around to maintain consistency with residential as the first word for all of our zones and it will be residential urban village. So summary of those keys descriptions which I was talking about are the ones outlined in yellow and these are the ones that are in the packet as well. So currently we have three residential zones section of code. So it is like an overarching residential zone that has been a another section for single family and another section for multifamily. We are now just going to have one residential zone section which will go over all of those residential zones and then some of the zones that were in the multifamily zone section are moving to the mixed use zone section. And then the mixed use zone section is going to be updated all the names and such and reorganized. Right now in our different sections, the way that the zones are listed are not from least to most intense. So while we're already in there, we are going to reorganize the order just so that it makes sense so that when you're scrolling through it's lowest to highest intensity. that's it mine's much more simple than kate's um so same considerations are the amendments clear any changes or additional information needed or any other questions that you all have thank you emily um okay we'll start with questions any questions for emily any comments for emily commissioner there there is a map mentioned can we see the map right i thought there it said earlier that there was going to be an overlay map Nope. I don't think so.

Okay. Sorry. Undertake additional. Okay. Nevermind.

The one time you wanted a map, you don't get a map. It seems pretty straightforward. Okay. Like staff's cleaning up some things, reorganizing some things, obviously taking the opportunity to, make it make a lot more sense for all of you and the developers that use our literature. Does anyone else have anything else they'd like to add for Emily? We can go back to Kate, sure. Emily, did you get what you needed?

Kate had the next slide anyway, so good segue.

All right, perfect, thank you.

I wanted to go back you had mentioned asking for a little bit of feedback on including the names of some of the neighborhoods on some of those I was thinking about it seems like the one that's impacted the most or the most focus would be the regional core urban growth center areas so I think it makes sense to call that one out but it seems like everything else is mostly kind of lumped into you know, will grow as needed or as conditioned in that area. So I'm, I guess I'm making a formal suggestion is I think it makes sense to call out the urban growth center or regional growth center part, but maybe we can just say, and other neighborhoods as it was kind of presented.

Can I just, um, thank you for that. I do just want to mention that, um, you know, I've been a newcomer to Esquire. I've worked here since November, which is great, but there, the, um, Some of the background environmental analysis was looking at mixed use in residential centers and recognizing that Issaquah Highlands is a center. It's not the high density central Issaquah, but it is a center that functions as kind of a pretty complete neighborhood. And so that's the idea for the growth that's coming. The zoning is a little higher there, so there is more growth to come there. Lakeside as a residential center is going to be built over the next few years. The idea would be to kind of reflect on that, but maybe just discussing at a higher level in context and making sure we have the data to support it. Are you amenable to that? I mean, maybe not calling out the names, but discussing this as, you know, centers. Okay.

Yeah, yeah. I think that makes sense for sure. As you mentioned, probably some more wordsmithing to be done before we get to the final. Yes, thank you, though. Yeah, that's great. All good.

All right. okay any other final comments for kate or emily okay thank you well just sorry one real quick thing i just wanted to share um that this uh is the first time i think we've shown you that the public hearing is likely in september and that there are a few more uh amendments uh proposals you haven't seen in turn including from the parks a system plan that one's kind of been sliced down a little bit so just some minimal updates for that as well as the Issaquah climate action plan also that'll come to you soon so that's all I've got thank you all right well thank you both great presentation I'm going to move on to the next item of regular business which is a presentation related to the promoting building investment code amendments

from planning manager Kristen Leeson and Andrew Bjorn from ARCH. ARCH stands for, for our listening audience or our television audience, a regional coalition of housing. Kristen and Andrew will be presenting an introduction to floor area ratios, fun stuff, inclusionary zoning, and the development bonus program. So Kristen and Andrew, please go ahead.

all right good evening yeah so this this is just our intro some of this you've heard before but we're going to hear it again okay all right so let me get this out of the way i apologize okay so we're going to talk about the goals of the amendments that we're going to make with this the we're going tonight we're also going to review the existing regulations that we have in place the just a quick quick overview of the Eco Northwest report, how these housing tools work together, and then what our next steps would be. Maybe. Come on. There we go. It did it. OK. So as a reminder, these are actually two of our 17 amendments that council has asked us to do. The floor area ratio and height consistency and then inclusionary zoning development bonus program and multifamily tax exemption. And the reason that we are doing these together now is because we cannot ask for something from developers, i.e. inclusionary zoning. unless we also give something back to the developers. So if we're going to do this, we need to potentially increase our FAR or base height or something like that, levers to be figured out, mixed with the inclusionary zoning, MFTE, and development bonus, keeping in mind that both the MFTE and development bonus are actually voluntary programs, and the inclusionary zoning is a mandatory program. So we'll talk about that in a minute. So the goals for these are the floor area ratio is to align the height and FAR requirements to get additional affordable units under the development bonus program. And they just say the potential action is to blend this with MFTE and inclusionary zoning to see what we can do. And then the goal for inclusionary zoning and the others are to recalibrate these to help improve development feasibility while still getting affordable housing that we need. to meet our targets. So I don't know how many of you have seen this before. I think you have. But we have our housing continuum. And everything to the left is something that requires more public support. It's not something a market rate developer is going to come in and do. It requires a lot of funding from federal, state, and local governments and entities such as ARCH. They provide that funding. And then everything else to the right is stuff doesn't need as much support. Developers can generally do this, provided they have all the right tools in place. And so what we are geared toward with these is those amendments that will get more of those housing developments that required less public funding. What is Area Median Income, AMI? So come on, Andrew. Come on, Andrew. Because you guys are asked questions that I'm not going to know the answers to. I can do that.

I can read that. OK. So hello. Glad to be speaking with you today about an interesting topic like area median income. So when we're talking about affordable housing, we need a benchmark to work from. And while talking about affordable housing may sound easy with respect to what is it, can be very hard when trying to distill that down to dollars and cents. So with affordable housing in the US, typically what we do is we base this off of a figure, area median income. And this is also calculated as median family income. This is a number that's drawn from the US Department of Housing and Urban Development, from information from the American Community Survey that is conducted by the Census Bureau. So what it does is that over the space of five years, it sends out surveys to different people in the community and asks them what their income is and it bases the number off of that. It's a more complicated calculation, especially since you're basing the number off of surveys that have happened in the past, not right now. But it's essentially trying to get at what is the midpoint of income. If you look at the families in Issaquah, 50% of the families would have an income greater than that, 50% would have incomes less than that. When we're looking at this from a regional perspective, though, this is conducted over the metro area. We're all part of the same housing market, so we want to be considering everything together. For Seattle, it's actually King and Snohomish counties. So Pierce County has a separate metric for the Tacoma area. When we're talking about the numbers themselves, the area median income for King and Snohomish County for 2026 is identified as $164,400. But it's not simply a matter of just saying what the number is overall. There needs to be some adjustments on the basis of family size and for the kind of the level of affordability that's required. So you have here a matrix on the left that shows household income limits. This is on the basis of people. So the fewer people that you have, it's likely that the fewer income earners you'll have within a household. So that's why the numbers go down from four people to one person. The percentages for AMI are the typical breakpoints that are used when we're talking about affordability. So 30% and below is extremely low income. Between 30% and 50% is very low income. 50% and 80% is low income. And 80% and 100% is moderate income. And you can take a look at different sources. few times when you can go out and find slightly different definitions i've seen uh... you know uh... mid moderate income for example in some communities uh... but these are typically the definitions that we deal with and these are also important because the uh... king county growth targets by income uh... are based on these breakpoints so uh... So it's important to look at it by people, but when we're trying to look at the acceptable rents, it can get a little bit more complex. You don't necessarily have property owners that are charging rents necessarily on the number of people that are that are going to be staying within those units. So the household limits on the left are used to calculate out the total housing expenses that would be tied to different sizes of units. So studios, one bedroom, two, three. The typical formula that's used is assuming that one person will be in a studio apartment and then you'll have one and a half people per bedroom. So a two bedroom apartment would accommodate three people, which is somewhat consistent. It makes certain assumptions. If you have a three person household, but it has a single parent and two children, it might get a little annoying for the kids to be sharing a bedroom, but we need to have some kind of broader standard We understand that there are exceptions to the rule, that there are special cases, but these are kind of the standards that are used in the analysis that we typically do and the policies that we set. So it's also good to provide an example of what we mean when we're talking about these different levels. So when you're talking about 50% AMI, the break point where very low income starts, If someone is living alone, what you have here is textile knitting and weaving. I honestly just took the highest income in the category according to labor statistics from the state of Washington. But it does give you an idea, like all of these nine occupations, well eight technically I guess since power plant operators are duplicated here, but it gives you an idea That, for example, if you have a single parent who's a librarian and is making the median income for a librarian in the Seattle metro area, they're going to be at 50% AMI. And that's when we're talking about who we're trying to accommodate with this type of housing. That's what we're thinking about here. It may be like we throw around a lot of numbers, but these are the people that will be living in these spaces. So are there any questions about that? Throw a lot at you. I could throw a lot more formulas at you if you really want. I'm assuming not.

I appreciate it. Commissioner Matthews.

I just had one question. Is 30%, 31% to pay for housing, say if you have a four-person family or four bedrooms, whatever it was, is that a typical countrywide, what the expectation is that you'd be able to afford if you were at 100% AMI, like 31%? Is that typical for everybody? Or that's what you're trying to target?

Well, there is that. Sorry, you might need to repeat the question.

Back in the slide before, basically if you look at the 100% AMI with four people and three bedrooms, that's 31% of their income is going to housing. Is that typical of what we're trying to reach?

Oh, yes. So the two levels that we look at here are when your housing costs are at 30% of your income. And again, Some of these numbers are somewhat arbitrary, often just because they're rules of thumb. You can get more precise with certain things, but typically the limit that we look at is 30% of income as being the, 30% of income or below as being the desirable amount that people should be paying on housing costs overall. So that includes rent or mortgages, and then utilities excluding, oh man, I always forget, excluding telephone, I think, but including things like heat and water, sewer, gas, et cetera. When you get above 30%, then households are considered to be cost burdened. So they're devoting more of their income towards housing costs than they should. And that eats into a lot of the income that they would be spending on other things. When it gets to be 50% then they're assuming, then the term that we use is severely cost burdened and that's when it's a significant expense, it's cutting into income for a lot of other things and that is also typically the level at which like market rate renters, like market rate property owners are not gonna be renting to someone who makes less than twice of what you would, twice of rent.

Thank you very much.

I'd like to make two notes. One is that there's a reminder that in our comprehensive plan toward the end is one of the appendices. We have our housing analysis, which has all of this information about Issaquah and costs, how many households are cost burdened, or severely cost burdened, and it has all great information in there. The other one is that you all may recall Mike Stanger. He had the audacity to retire, but we are lucky and grateful that Andrew has joined the team for us. All right, well for us too. All right, so moving on, we're gonna talk, I'm not gonna cover that slide. All right, so starting with floor area ratio. I just want to explain it a little bit. We have in our, and I only picked out the three zones here to use where we have the most development potential. So mixed-use residential, mixed-use central Issaquah, and urban core. And in each one of these zones, you have a base floor area ratio, FAR, and a max FAR. And we also have a base height and a maximum height. So if Moving toward that, we have our development bonus program. If you choose to go above, say the base height is 60, if you choose to go above that base height, not all the way to the max, but anywhere above three feet to 25 feet, whatever it may be, then you are required. So it's voluntary because you don't have to go above the base. But if you choose to go above the base, you must participate in the development bonus program. It's in central Issaquah only. And there are two parts to it. And I'm not going to get into the numbers. But essentially, a third of this, a third of this requirement requires that you have, if you're a residential property, on-site affordable housing. The second part of it, the other 2 thirds of it, you have the option of on-site affordable housing, fee in lieu, or an open space. You get to pick which one you want to do. And off-site compliance is a possibility. We are doing that currently with the market rate development next to Trailhead. We are doing alternative compliance on that site right now. So all of those affordable units are going into Trailhead. Okay, moving. Do you have any questions about that one before I move on?

So if I understand it correctly, you're saying that if they go above 60 feet, then one-third can go into affordable housing on-site, and one-third can kind of do a fee-for-loot program? Two-thirds.

So to get really into it, so really it's the square footage, it's not just the height. So say that that... 20 feet or 15 feet, whatever this is, results in, oh man, I'm going to have to do math, 30,000 square feet of additional developable space that you're adding onto it. 20% of 10,000 square feet has to be on-site affordable housing. And then 20% of the other 2 thirds can either be on-site affordable, fee and lieu, or open space.

Commissioner Grafs.

Hello. So we may not have a big enough base, but if you look more regionally, this essentially just incents people to build at 60 feet and don't even think about going an inch higher. So I'm curious of the data that exists across all jurisdictions, what percent of the developments are actually just keeping it at the base versus wanting to go higher and doing these programs? Meaning... Is the incentive just wasting time by having all these complicated things, because they're just going to build a 60, or am I wrong? And a good portion of the developers want to go higher, and they will do these programs. So I'm curious what is actually being built across the region.

So most cities in the, I know mostly about the arch jurisdiction cities, of which there are 15. Most of the arch jurisdiction cities do have a program like this. Ours is a little bit more complicated. What you're asking is part of the discussion that we're going to have with this is, do we need it? Is it really an incentive? But we have had four developments take advantage of it. As a result, we've gotten about 14 new affordable units, 11 of those at 50% AMI, and about $2.1 million of fee in lieu. OK. So people have taken advantage of it, but that is part of our discussion about is it once all this analysis is done, do we want that in place?

So I'm just looking at more. That's why I say we have a very small base, and 14 units sounds like nothing. Very small. That's why I say if you look at more regionally, is this just... just pushing the incentive just to do the base. So the question is more like, there's data out there of what's been done. So I think hopefully that'll be part of the discussion, not just what we think will happen, but what's actually happening.

See, Andrew's going to get into that in about 12 slides. But that's the whole purpose of this, is to do the analysis and say, how does this affect it? How does it affect it in the region? How will this affect us with different scenarios? That's the whole purpose of this.

All I'm saying is, have we already looked back and have the data to see what's actually happened? I assume these are not new programs. These have been around for a while, or is this a new looking?

A development bonus was adopted in 2014. But things have changed. Construction costs have changed. Land costs have changed. The most recent one that was used was in a project that was just permitted this year.

So you're right.

We're going to look at it. So I'm going to move on to what in our code is called required affordable housing, but what most jurisdictions will call inclusionary zoning. If you go in Google inclusionary zoning, this is what you'll find. This was adopted in 2017. It was part of the city council when one of our developments went up, and there were 350 units there, and none of them were affordable. There was a moratorium, and they said one of the things we want is more affordable housing. So we developed our affordable housing program, or our inclusionary zoning program. And it's broken up into three different parts, and we have a sliding scale. So if you build, and this is mandatory. So if you build anything with a residential development with a residential component in our mixed-use central Issaquah zone, you have an option. include 5% of your units at 60% area median income if it's rental, 70% if it's sale or for ownership. Or you can do 7.5% of your units at 70% AMI for rental and 80% AMI for ownership. Moving up into higher densities, if you get into the urban core, You have, again, two options. 10% of your units have to be affordable at 50% AMI for rental, 60% AMI for ownership units. And then your other option is to do a combination. So you have 10% of your units are available at 70% and 80%, and an additional 5% lower at 50% and 60% AMI. Lastly, our most dense area, which is our vertical mixed use zone. And it's denser because they actually can go all the way up to 125 feet, but an eight floor area ratio of 8.0 in this little area. And in this case, because you could potentially get more density, option two is 10% of your units at 50% AMI or 60% ownership or 12% of your units at 60% rental with 70% ownership. Any questions about that one? Okay. Now lastly, our Central Issaquah Pioneer Program. This one was adopted about three years ago, intended to incentivize development in Central Issaquah only actually in the urban core, which includes the vertical mixed-use zone and the mixed-use central ISCWA zones. And with this, you can go up, you can pass the base, you can exceed the base and go up to the maximum height and the maximum FAR without employing the development bonus program. You can just go up there. And then you do still have to do inclusionary zoning, but you have an option at either 8% of your units at 60% or 10% of your units at 80%. And then it's, and like I said, it's intended to get, it's, you can, two developers, or two developments can use this, and they can range anywhere from 200 units each to 400 units each, is what the limit is.

Commissioner Grass? She's looking at me. So, I remember this is when I first came aboard. So, do we have... Of the two, because I think we limited it to two as a test, is there anybody in the pipeline?

Not yet.

And do we have a good understanding of why in three years no one wants to do this? Is it the right formula is really the question, or is it something different?

Again, something to be discussed, but I don't have the answer to why.

All right. One question, too, also, Kristen. As far as the two, those are the only two, and then the program expires for the Pioneer Program.

Correct.

Okay, so it's not like two every few years, oh, this is two, and then it's over. Correct. Pioneer Program's an ad hoc thing that just happens once.

Correct. Okay. And I'm going to, well, not yet. We also have, we do have We don't have a multifamily tax exemption program, but we have sites where it can be used. We have three different sites. So one is the Tibbetts site, which is the Trailhead project, where it's not being used because it is a nonprofit developer who is doing the Trailhead project, and they don't need it. They get tax credits. The second one is the High Street or Shelter projects, which is the backwards J, which is the J at the bottom. Some people call it a backwards L, but it's a J. They get to do, it's a 12-year program. 20% of their units are going to be affordable at 80% AMI. And then I believe the affordability ends at the end of that 12-year program. And lastly is the Central Esquire Pioneer Program, which we just talked about. And it's either eight units at 60%, 10 units at 80%. But I believe that those are for the life of the project, the affordabilities for the life of the project. Okay, nope, this is the last thing, I was kidding. We also waive school, traffic, fire, and park impact fees. We waive 100% of these for every project that comes through for the affordable units. We waive 100%, but the state really only says you can waive 80%, so that other 20%, the city has to repay right now. We have to pay ourselves that 20%. We also waive all building and plan review and permit review fees, mitigation fees, and utility connection fees. That's a lot that we waive. You can do these exemptions for units that are 80% and below the area median income. And the affordability requirements for all of these units is placed on the title through a covenant.

that's all i have for the for our um oh wait i'm kidding um any questions about that questions commissioner so for the fee weaving that would be on the specific unit so the percentage of the specific unit so if you had like a 10 unit building and two of them were affordable under 80 we would waive the fees just for those two units not the whole building correct correct

And I didn't mention this before, but when you do the multifamily tax exemption, those fee waivers are for all the residential units there. If it's a mixed-use property, it's for all the units there. It does not include commercial. It does not include the land. But it does include all of the units, so market rate and affordable. Yes? OK. Last thing, the Eco Northwest report. It's a little dated now. It was done in 2023 based on 2022 data. But essentially what we asked them, I've told you this before, to assess three things. One is more diverse housing, removing, what do you call it, barriers to condominium development, and then expanding our inclusionary zoning program. Essentially, they said, yep, no, your inclusionary zoning program doesn't work as it is now. It needs to be fixed. Reducing requirements helps, like parking and stuff like that, but it does not make projects feasible. Condo barriers are really at the state level, and city action won't affect anything, and other types of change that we're going to be talking about will, or at least we hope so. And they said to right-size the programs, to expand our multifamily tax exemption and actually make it a program rather than site-specific, and to provide regulations for unit lot subdivisions, which we do, parking, which has been handled by Commerce because we're no longer allowed to require structured parking for residential, and a few other things that have been handled. So now I'm going to hand it over to Andrew now.

So building on the ECO Northwest report, there are some things that we're looking at supporting the Issaquah team on. One of them is looking at meeting housing goals. So under changes to the Growth Management Act that were put in before the update cycle for the comp plans, There are now requirements in place to look at accommodating housing at different income levels. So I was talking about this before when defining AMI. But this is not necessarily that the city itself needs to produce these units. The city is not a developer, but there does need to be a demonstrated capacity to accommodate units in these income brackets. And typically The Department of Commerce puts out guidance about what specific housing types can be accommodated. So looking at multi-family apartments versus townhomes versus kind of more duplexes and single detached homes. But what we're looking at doing here is to support the efforts of the city to try to accommodate all of these types to be in compliance. But with that, one of the other things, and this does come up in the ECHO Northwest report, what we're finding is that in some neighborhoods that can accommodate higher density, that duplexes, for example, and town homes are becoming more more of a desired development type. And we want to make sure that the free market is providing housing. I mean, we're not, again, cities are not developers, per se, but what we do want to ensure is that we're providing the incentives for a much broader range of housing types to be accommodated in the city. One other point, too, is that a recent bill in the legislature now requires that that there is an MFTE program and inclusionary zoning close to transit stations. So this is going to be applicable for Issaquah and it is going to be applicable even though transit around that transit station is not going to be immediate, it's something that needs to be planned for and the program needs to be in place for that. So one of the things that we're looking to do in tandem with the planners, with the city, is to provide some recommendations for accommodating the incentives that can both support different types of diverse housing, but can also provide the affordable housing that the city needs. And again, this is something where the Echo Northwest report gets at some of these points, but we're looking at expanding out that work. So one thing to be upfront about is that cities don't have a lot of tools in the toolbox to incentivize affordable housing. There are certainly direct funding opportunities, both, you know, just with the city devoting dedicated funding or general fund money or, you know, funding coming from the outside, like from arch or state funding sources. There are indirect funding opportunities like the tax exemption or fee waivers or even kind of fast tracking permits which can actually reduce some of the carrying costs associated with development. There are other supports like leveraging surplus lands which isn't completely an option in Issa, but there are some opportunities. But one point that we want to include is that A lot of these tools operating individually are not going to be able to get that deeper level of affordability to meet some of these targets that you need to be working with them together and in cooperation. So what, before I get into a bunch of charts here, One of the things that we recommend is that if you're looking at MFTE, for example, or you're looking at inclusionary zoning, that you consider them together. And part of the reason is that an eight or 12 or 20 year tax exemption is one of the larger incentives that the city can provide. But when you're looking at a longer term exemption, some of the requirements that the state has can be a little unwieldy. For the 12 year MFTE, the state required, it's a little complicated, but essentially the state, the typical maximum that cities use is 80% of AMI for 20% of the units. And that has two problems to it. One is that the 20% set aside is very large. So if you're looking at deeper levels of affordability, that tax exemption can only go so far. The other problem, and this is coming up as an issue, 80% of AMI in a lot of surrounding communities outside of the core of Seattle are getting close to market rate. that becomes a problem because there's administrative overhead that's associated with ensuring that people of those incomes are in those units if you're in an mft unit typically you need to provide evidence that your that your income is at 80 ami or below it's uh you know tax returns pay stubs etc That's a little difficult for the resident, that's difficult for the property owners, and that's difficult for the jurisdictions that need to audit that information. So as we're seeing more and more of these units come on the line, one of the things that we're trying to encourage is that we're looking at a smaller number of units and deeper levels of affordability in certain ways. So that's where the layering can come into place. The other issue with MFTE is that unless you're looking at certain specific kinds, 20-year exemptions that are in the statute, the eight and the 12-year are limited to 20 years. 12 years, like the 12 years limited to 12 years of affordability under the base statute. For inclusionary zoning, it's a little bit different. Inclusionary zoning has a requirement that you provide a bonus. It can be MFT, but typically it's what you see in the bonusing program here, an increase in height, allowable FAR, used to be that you could allow for changes in parking requirements, etc., but that bonusing can be a limited incentive it's up front it's something that that is more permanent affordability but if we're talking about some of the some of the situations as i think one of the commissioners stated where that additional floor of height may have limited returns above what you would get from just developing a smaller development on the site, that extra bonus may not be worth as much. So when we're combining these together, we're looking at addressing some of the weaknesses with each while we're providing a public benefit that can both provide some incentive for development but also can provide like a public benefit and largely through affordable housing. Please do not look at the numbers here. This is an example that I was pulling from something else, but this, I'll walk you through from left to right here. So if we're looking at just base conditions for a project, 3.8%, I know that the real estate folks in the room will blanch a little bit at that number. But just looking at that, ignoring the numbers for now, but just looking at the bars, if we're looking at providing going from like the base density that you can have in an area and providing some bonus. There can be kind of a small increase in what you can get from a density bonus. But there are a number of options that we have in looking at providing for additional, sorry, let me take a step back. So if you're just providing the density as of right, if you're just saying to somebody you can build higher build more units, uh, then that bar is going to go up. Um, that's going to be additional profit for a developer. They're just going to be able to build more on the site when we're talking about though, how to, how to, I don't want to say claw that value back, but ensure that that value is being shared with the community, uh, What we're talking about is, what's in here is one of two things. Either you're providing a 12-year MFTE at 20% with 12 years of affordability, or you're providing the density and an impact fee waiver in exchange for 10% of units that are permanently affordable. So these are two different scenarios where we're looking at two different instruments, the MFTE and then just the density bonus. And what you notice is that alone, if you're moving from 80%, which is the darkest bars in red and green on the left, over to the highest levels of affordability at 50% AMI on the right, as you get more and more affordable, eventually it gets to the point at past 70% where it's just not worth it for a developer to participate. Even if they get that density bonus and an MFTE, the affordable units will reduce the income that they're receiving. So what this means and what you can see is that, and this is just an example, these numbers can be different for different types of construction, but When you have a large set aside of 20% of units or if you have permanent affordability and nothing else to offset it other than that density, the ability to get deeper levels of affordability can drop off pretty fast. So what we often want to take a look at is like an alternate set of scenarios here. This is a lot of bars. It's a lot of numbers that are here. But I think that the important thing is to take a look at kind of what the behavior looks like in different ways. If we're providing an eight year tax exemption and providing much smaller set aside of affordable units, you're able to get to deeper levels of affordability and developers are able to retain more of that benefit. There's a trade-off between providing more of an incentive for development versus providing more affordable units. But that's an important discussion to have. What is the priority that the city would have? Providing more units, ensuring that there are more affordable units that are preserved. But this is something that you have more leeway to do if you're coordinating MFTE and inclusionary zoning together. So there are certainly ways of doing this so that you're not completely ensuring that nothing will get developed versus everything will be market rate or at 80% where for a large swath of people, it's not really going to make that much of a difference in rent. So did you want to take this one or should I? Oh, great. So what we're looking to do in coordination with the planners with the city, the planning staff with the city, is to adjust and right-size the inclusionary zoning and the development bonus program to ensure that there's feasibility for new development and movement towards the affordable housing goals that I was talking about before. But also that we're evaluating different MFT programs at the same time. That was not something that was extensively discussed in the ECHO Northwest report. And that's something that a lot of developers are looking at now as a clear incentive to provide for more development. We also want to take a look at other policy actions. Parking, for example, is something that, it's hard now because the state has put in certain regulations Like there's less leeway to provide parking incentives because a lot of allowable parking restrictions have been removed by the state. So there's less leeway on that. But if we're looking at other types of incentives that could potentially move the needle a bit, we want to make sure that we're providing with a full suite of options. So it's taking the results that you have here and expanding them. I think that one thing that we want to recognize is that it may not necessarily be towards incentivizing micro units or looking at cottage units per se. I think that one of the focuses that we would have is looking at the types of units that would fulfill some of the affordability requirements. that are in the comp plan and required by King County. But that, oh yeah. But that, you know, we want to be focused on that. We want to make sure that you're fulfilling the requirements that are set out in the comp plan. We also want to make sure that we're providing for the technical support. You know, we want to make sure that there is a solid financial analysis that's in place, that there is some engagement that takes place to ensure that I'm more than certain that there are a diversity of opinions in the development community to any proposal that would be put forward. We want to make sure that that's clear. But there also does need to be, at the end of the day, clear changes to the municipal code and the land use code language to support these programs. So that's kind of where we're going with this. We're coordinating with an economics firm to be our backstop with a lot of the pro forma analysis and financial analysis that would be supporting this. And we're looking forward to moving forward. So I think that that's it. Great.

I did not put a calendar in here, but I believe the next time we come back is at the end of August. And we have provided ARCH with several different scenarios to look at using those different levers and adjusting them. And they will work with the consultant. And we'll come back and show you the results of those levers. Then we will also go to council, Planning Development Environment Committee, and talk about it with them. Once we sort of come up with the direction that we want to go, then we'll start looking at our code amendments. But we want to get a good direction based on data first and see where we go. Any questions?

Yeah, well thank you, Andrew. Thank you, Kristen. I don't think necessarily we're talking about policy discussion. We're just basically asking questions, clarifying questions this evening. I mean, I think we all kind of have our general idea of where this is going, just based on the ECHO Northwest. But again, as Kristen mentioned, this is a dated document. So we do want new data. But yeah, really, we're not here to talk about policy prescriptions this evening. It's more or less just asking questions.

And it looks like John has a question. I always have a question. So I have a theoretical question, but there's some data that will help inform. So when you think about broader, we need to have places for people to live that don't make as much money. So let's call it affordable housing, just as you've been doing it. And most likely those are going to be rental units. Let's be realistic. If you're not making a lot of money in this area, buying anything is, so let's say they're mostly going to be rentals. Is there an analysis if you look at, because you have existing stock of rental units right now in Issaquah. and then there's new stock that will be built. And if you look at what already exists, is there a scenario where, I'm gonna say a couple bold things and Kristen's gonna like roll her eyes. We get out of the incentive business on stuff for new stock. We could say we have a strategy that if we allow a lot more new stock for certain size units, without restrictions, we let them build higher. We're not giving all this money back, all these things. We let market take, be market rate units. We look at the existing stock, maybe the lower grade units. Once again, I don't know how many there are in this area, if this math even works. Those will become lower priced units compared to the new stuff being built because building a new building with costs to build something, you're fighting, the headwinds get higher and windier every time you even think about this. So is there a way to look at the existing old stock of units in the area to be able to become your strategy for affordable housing even more so, even if you have to give some type of incentives, whether it's from the state or the city, to some of the landlords to cover some of those things? I was just curious if that's even, you're looking at a broader picture, not just the new things that are being built, but the whole installed base of units that we already have. That's the broader one.

So I'm going to jump in, and then Andrew may have more, but We did back in 2021 an inventory of all of our apartment units in the city and looked at the size of the units, how much each unit cost, when it was built, that sort of thing. So we have a list of all those market rate units that are not covered under cover or all of those more affordable units that are not covered under covenants right now. And our plan was to go out and talk to different agencies and see if they would be willing to purchase some of these to help preserve the existing market rate affordable housing units. The problem is that we've had is one, funding. It's hard to get all that funding in place, but is two, you've got to find a property owner who's willing to not sell their property to a developer who can come and tear it down and make a lot more money, and you get money off of it. or that just wants to keep it affordable?

My question is actually even more broad. Do market forces, if you have a lot more new nice ones, the existing old ones, if they want to rent them out, they're going to have to be cheaper, and those become your affordable play. I'm not sure if the math works there, because otherwise we're doing all this work to get 14 units built, and it's like, okay, that seems like a lot of work to not have something that meets a bigger goal. I'm just curious if there's other ways to look at the bigger picture of to get the result that we want, or is this just an impossible task to do that?

Well, I could say one unpopular thing and say that the targets can feel like an impossible task. If you look at the county as a whole, there needs to be a lot of affordable units created across the county, not just in Issaquah, but everywhere. What you were talking about before with filtering, yeah, it's something that is a clear trend in urban housing economics. It's something that does occur where people that move into new housing free up housing for other people. That housing, because folks that move in may have less income to spend, that rent can go down. So that's fair. But I think that one of the things to focus on here is that we need to do a lot. And it's not just with market rate housing. We do need to promote that. And I think that it is fair to say that cities across Washington state, really, and North America, I don't want to leave anybody out here, but I need to do more in promoting the conditions that are necessary for necessary for development to occur. Some reasons to include this beyond just trying to get affordable units are to try to get affordable units in a way that is integrated in with the rest of the community. So one of the issues that we often face is that if you are creating 100% affordable project in one location or another, that can be dictated by the availability of land. It may not necessarily be as ideal of a location. And it's concentrated. If we're providing for a more distributed model where you can encourage more affordable units to be spread out, then that means that you're getting people that may not necessarily be making as much money but still have access to a lot of the same amenities and resources. So I think my main answer is You're right, but we need to try to do everything to try to put this in place. There are certainly arguments about focusing on other ends of the spectrum that we were showing you before, looking at severe need, but we really need to be focusing on a lot of things, and it's a big task. My understanding, Andrew, was that

Arch, and Kristen, forgive me if you're wrong, but didn't Arch do that in the past? Bought property in as a cloth, and actually the entire unit was turned into, I want to say that was like three or four years ago, right?

We did it. It was over on Clark Street. Right. 245 Clark. It was several years ago, good memory. But it was funded in part by Arch.

Right.

It was part of the general fund. Correct.

And then the city helped kick in.

Right.

Okay.

I just want to, like I said, I just want to go back in the time machine because I thought that is something Arch did. Oh, and it's, what I was saying was not to advocate against it. No, no. Because, I mean.

Well, I think, I mean, to your point, I mean, the distribution model is a lot better when it's, it is, everybody's equitable. They have different, I mean, that's a lot better than having tenements in New York City. So I get that part. Yeah, I just, like I said, I just wanted to go back in a little history lesson. I see you, I see you. But, yeah, I just wanted to go back because I thought for sure that is something that we've done in the past that was pretty successful.

Yeah.

Okay.

So that's not taken off the board, right? No. Again, I mean, we need to be focusing on a housing policy that's a stool with many legs. Sure. Sure. Yeah. Okay. Commissioner Day?

Yeah, and just to add to that and to John's point, one thing we need to keep in mind when we're looking at economic levers is that we're not actually existing in a frictionless economy, right? So, for example, when my husband and I were house hunting and looking for rentals, what we encountered when we first moved up to Washington is that there would be one company that owned every building within a certain region and they effectively have a monopoly right on prices so they could if you have something like a black rocket so they can theoretically hold on to enough empty units to then force the supply down and the price up so we i think just looking at all the levers is a great idea just something to keep in mind yeah no that's a good point i mean i think that's

That's countrywide. I know of that in other countries, actually, where you have conglomerates that are buying units.

Yeah, I will add just one small thing with that. And talking about moving into the region and trying to find housing is super important. This is not just a housing strategy. This is an economic development strategy, because a lot of people who would be accommodating 50%, 60% AMI units are the folks that are doing retail work in the community. They're doing kind of home health care. And if we're talking about kind of accommodating them here as opposed to having them drive 45 minutes, an hour to get into the community from affordable housing, that's important. Absolutely. Commissioner Matthews.

I just had a question about the Echo Northwest report about condo development. It basically stated that there's a bunch of state laws that went in place that prohibit people from wanting to develop them. So why are townhouses going up? Aren't they under the same structure, an HOA structure like a condo is? I guess I'm a little confused about why.

Yeah, yeah.

Right, there, simplified.

I can talk to it a bit. It's been a longstanding problem, and it's one that it doesn't seem like it's being solved anytime soon. It primarily has to do with liability from the 90s associated with leaking condos, I believe. But that's carried over into this concern about liability to builders. And when you're talking about town homes, I mean, one of the other things that's not included in the, and I switch between eco and echo, sorry about that, but one of the things in the report that isn't acknowledged is that there have been more recent changes that have allowed for unit lot subdivisions to, you know essentially replace some of that condo style ownership models kind of essentially condos except replacing a condo association with an HOA but it's it's typically more because they're profitable to build and the types of liability from what I understand are not as severe when you're talking about townhomes so

Yeah, the whole report's pretty fascinating. I mean, obviously everybody read it, but there's a lot in there. Well, and maybe part of it, too, is beyond the developer. I mean, one of the things the developer said was that they would prefer to rent those type of multi-families versus sell them outright, whereas the townhomes, they can do the fee simple, sell them, not be responsible for them. They share one wall instead of multiple walls and floors.

Mm-hmm.

We'll see if condos come back. But what's interesting too is just how well, is a pretty diverse housing stock. So I think we kind of all know, just from what the report is, and again it's outdated, we kind of know the levers that we have to work with. At least I feel like I do. Okay, any other questions for Kristen or Andrew? Vice Chair Patterson?

I think this will be a quick one. I keep trying to correlate the AMI to market rate housing. Does it make sense that 100% AMI would be considered market rate housing, or is that not quite apples to apples?

It's not apples to apples for two reasons. Well, I could talk to you for an hour about that.

The simplified version.

A few points. One is that it's based on median family income. So that is something that excludes certain types of households that aren't families. So individuals or roommates, et cetera. So it's a little bit different than all of the households that are around. As well, you would typically be seeing homeowners at higher AMIs and renters at lower AMIs, which is why when I was talking before about 80% being pretty close to what you can see for a lot of market rents that are in the market right now, that's why that kind of occurs. But again, it's an arbitrary number. It's kind of where you plant the flag when you're conducting affordability studies when you're trying to come up with rent limits things like that so it's yeah it's it's hard because it's really not a real number it's it's technically not even actual median income in the community it's projected out from previous years data so just when you thought you got a grasp on it right okay any other questions for

Kristen or Andrew? All right. Would Kristen or Andrew like to add anything? Okay, well thank you both for the presentation. Okay, that's gonna do it for our regular business this evening. We appreciate everybody sticking around for the presentations, the conversation. Again, we'll get deeper into the weeds in the coming weeks and months. So the next item we have is now reports. We'll begin with city council updates.

I don't have any council updates.

Aren't they on break? No, August.

August.

OK. How about any other updates? Anything going on in the city? We've got some Fourth of July party coming up.

Trailhead is about to break ground, which is very exciting. It's, what, nine, 10, nine years in the process? Yeah. So we're very excited about that. Otherwise, no, I don't think so. No.

Are you guys doing any type of ceremony for it?

Yes. They're doing a ceremony on July 30th. Cool. All right.

Well, I see Minnie coming up to the podium.

Sure. Just a quick update on the council that you were asking. So Monday night, we take forward your recommendations to council on step backs and amenity spaces and all the other housekeeping sort of clarifying amendments that you had that's on consent agenda. as well as our permit process improvement metrics that we're measuring. So that's in that agenda. One of the work plan items was a detached accessory dwelling units. So we got feedback from planning development and environment committee. whether to pursue the pre-approval process so the city has some pre-approved plans that someone can use versus the state law was changed to say if they're self-certified, the city is not going to do a building plan review. So the committee said, you know, the cities that have done pre-approved plans, they haven't been really used by folks. So pursue the self-certification process. So because it's amendments to Title 16, so there's really not a Planning and Policy Commission discussion on that. So that'll go directly to Planning, Development, and Environment Committee. And if they approve it, it'll just be a simple code amendment in Title 16, which is a building code. So just in case you're wondering what happened to the detached EDU process. So it's just moving forward in a quicker, faster path. And a lot of excitement in development groundbreaking events. So Springs Assisted Living Facility groundbreaking happened in the Highlands. So that's about 200 units. And then Trailhead TOD happening end of July. and high school is under construction, so we're busy with a lot of construction and town homes. Yeah.

Yeah, no, I see quite a few heavy machinery around town. So that's great. Excellent.

Okay. I have one little side note that doesn't have anything to do with council, but I mentioned the excused absences, and you'll notice on the calendar that you get in your packets every week. I've been putting those on there, the excused absences, so if you don't see your name on there and Whoops, when are we gone? Just let me know and I'll put it on there. That way we know too and it shows up when it comes up.

Thanks. Yes, we want to give staff at least five days notice. Again, it's a lot of work as all of us know by reading through these packets. So again, if for some reason we don't have a quorum, especially in the summer or especially on a night like tonight. Oh, spoiler alert, man. I made it the whole evening. okay out yes that's okay i will survive okay well on that note i hope everybody has a good evening and we will adjourn this meeting of the planning policy commission at 8 21 p.m thank you