Planning Commission - Regular Meeting

Good evening, Planning Policy. Good evening, guests. Good evening, staff. We'd like to call this meeting to order. It's currently 6.32 PM. Today's meeting is a hybrid meeting. The Planning Policy Commission is in person, but staff, members of the public, as well as a consultant, may be attending virtually, as well as in person. So staff, do we have a quorum this evening?

Yes, we do. And Commissioner Holstrom has an excused absence.

OK, great. And we do see Commissioner Zacharoff on our screen. I got you. All right, we want to open with public comment for this meeting. So right now, we're going to hold general public comment for the topics being discussed by the commission. Please note that as part of tonight's special meeting, there will also be an opportunity to provide public comment after the staff presentation. Staff, has anyone signed up to make general public comments right now?

Yes, Chair. Carl Charette.

All right. For anyone who is speaking publicly, we do ask to follow a few house rules. Please mute your microphone when you're not speaking. These are virtual rules. If you're having any technical issues, please try joining the meeting using a different device, such as a smartphone or tablet. You can also use the call-in information in the meeting invite to call in as well. This is an important part of the public process. All of this is taken seriously and factored into the decisions that the Planning Policy Commission makes. Again, we do ask that people keep their comments limited to five minutes or less. Carl, when you're ready, please go ahead.

Good evening, Commissioners. My name is Carl Charette and I manage multifamily development for Vivmark Residential, the new name of what was previously Avalon Bay Communities. I appreciate the city is taking a serious look at the economics of residential development in central Issaquah. The staff memo correctly recognizes that inclusionary zoning, FAR density bonuses, and MFTE, the multifamily tax exemption, must be evaluated together. It also reports that rent may need to rise 25 to 30% before projects can begin to pencil under current regulations. Simply put, Issaquah cannot responsibly wait for that to happen. The feasibility analysis confirms how stressed economic conditions have become. Since 2020, construction costs have increased approximately 39%, while ISSAGAR rents have increased only 28%. Higher capitalization and interest rates have further stressed project economics. Under the current city program, every rental prototype studied was infeasible. Even scenarios combining a 12-year MFTE program, fee waivers, additional density, and assumed cost savings still did not make the rental prototypes feasible. All the good work you all are doing on land use and design reform will not make a difference if project economics remain underwater. We all know Issaquah faces unique challenges. Valley floor sites can involve high groundwater and significant infrastructure needs and other development complexities. Additional FAR or height may require a more expensive construction type, meaning added density has diminishing returns up to 85 feet and then zero added value above that height. This is why the Commission's land use work must be paired with an honest assessment of project economics. More height, additional FAR, and streamlined review are important, but none of these reforms will produce housing if a project still cannot be financed. Zoning capacity does not equal housing production. A zoning can be fully entitled and consistent with the city's vision, but it will remain stubbornly stuck on paper if the expected cashflow cannot support its development cost. The same principle applies to mandatory inclusionary housing. Requiring affordable units without providing an offsetting source of value is effectively an unfunded mandate on new housing construction. If the requirement exceeds what a project can support, the result is not more affordable housing. It is no market rate housing and no affordable housing. Many jurisdictions are reexamining similar policies adopted under very different economic conditions. Recalibration does not mean abandoning housing or affordability goals. It means designing policies that can produce actual buildings in today's market. To be clear, Washington's MFTE framework provides different tools for different objectives. The eight-year exemption is intended to encourage multifamily housing production and does not carry a state affordable housing requirement. That was not studied in the consultant's analysis. The 12- and 20-year options are designed to support affordable housing. In 2025, communities including Lacey, Olympia, Puyallup, and Tukwila all used eight-year exemptions for projects without rent-restricted units. Statewide, MFTE supported more than 8,000 units last year alone. I encourage Issaquah to offer a broadly available and economically meaningful eight-year MFT option without an additional affordability requirement. It should complement properly calibrated 12- and 20-year programs for projects that can support affordability. Please consider MFTE as an economic development tool to stimulate housing development and encourage housing diversity. Issaquah cannot afford to simply wait for the market to normalize. As if we do, it will be at rents that are dramatically higher than the already unaffordable rates that we see today, and our housing crisis will have only grown deeper. Thank you.

Great. Thank you, Carl. What did Avalon Bay change its name to?

We are now Vivmark Residential. I'm sure a consultant was paid a lot of money to make that decision. Vivmark Residential. Vivmark Residential. Rolls off the tongue.

Great. Thank you, Carl. All right, Amanda. Is anyone else signed up to speak virtually?

No, Chair. They are not.

Okay. All right. Well, thank you, Carl. We'll move along to regular business. And our only regular item today is a briefing on continued work related to the Promoting Building Investment Code Amendments. Tonight's focus will be a presentation from Planning Manager Kristen Leeson and BAE Urban Economics that has been assisting the city, along with ARCH, on potential updates to inclusionary zoning, floor area ratios, the city's density bonus and multifamily tax exemption programs. Kristen, please go ahead.

There we go. Good evening. I'm Kristin Leeson, Planning Manager. And I don't think I really need to tell you what we're going to do because the Chair just told you. But we are going to discuss analysis findings that were done by our consultants. And then our goal is for you all to make some informal recommendations, thoughts on where we should go with code amendments. And you're going to listen to me for just a little bit and then Matt's going to jump in. We had anticipated Economic Vitality Commission coming and being here. So some of this, it may be repetitive, but I do know that some are going to watch later. So I'm going to go through some of this. So just as a reminder, we have 17 amendments that are going. Actually, I should say 15 other amendments that are going on along with the ones that we're talking about now. And every single one of these amendments will contribute to the cost of developing multifamily housing in central Issaquah. So far, we have completed three. We have three more that are about to go to city council. They've been through planning development and environment committee. And we're working on floor area ratio and then all of our affordable housing mandates and incentives that we have. As a reminder, with outdoor amenity space, we have, and this has been approved, we have reduced the number of units requiring outdoor amenity space from 100% to 30%. We also have deviations for conversions of buildings from commercial to multifamily residential where they could have no outdoor amenity space. Step backs, we removed the step back requirements along natural context areas. They may start anywhere from the base of the second floor up to the base of the sixth floor. Multiple step backs are no longer required if you're over above six stories. And these are only required on street-facing facades right now, which was not clear prior to this. As for what is it planning development and environment committee and what's moving forward is natural context areas. We proposed we just relaxed the requirements. have addressed development when a development has a street between it and the natural context area we recommended to permit multi-family in the urban village commercial zone where it was not previously allowed and we recommended to permit permanent affordable and transitional housing in the uvcom and retail zones also recommended are the ground floor transparency and parking pbc recommended that Residential have 40% transparency on the ground floor and 45% transparency on the ground floor for commercial, except for 70% in the urban core, and proposed to change how transparency is measured and allow for deviations for buildings that have three public-facing facades. The Planning Development and Environment Committee, also PDE, is recommending residential have 15% transparency in commercial, have 40% transparency. For parking, PPC has recommended to adopt the state requirements and also allow for side-by-side parking in townhomes when that parking does not face a street. And PPC agreed with those things, but they also want to remove minimum parking requirements in the urban core and mixed-use centralist quad zones. So moving on to, again, a little overview on regional growth center and targets. We adopted part of our central Issaquah area of 450 acres was designated as a regional growth center in 2015. And since then, we've seen significant development outside the regional growth center, but nothing there. Our first project just came in with 164 units. In 2024, PSRC initiated a process to redesignate the 30 or so regional growth centers in the state or in the four-county region. And they recertified them based on compliance with their framework criteria and their Vision 2050 updates that they made. In 2026, we were conditionally redesignated as a regional growth center. when they recertified as a subarea plan and found multiple areas that the city needs to address. And they'll reassess this in 2028. One of those things that we need to do is redo our targets for the regional growth center. So you'll recall that the city is required to, our housing target is 3,500 new units between 2019 and 2044. It is broken down into various area median incomes, the number of units that we need. So when you look at the 3,500 newt, whoops.

Go back.

There we go. Oh, sorry, I was where I wanted to be. About 65, and we had this discussion last week, that about 65% of those units, of those 3,500 units, need to be in Central Issaquah, which comes to just over 2,200 units that need, I mean, in the Regional Growth Center. So just over 2,200 of those units need to be in the Regional Growth Center. And with only 164 currently under construction, we've got a ways to go. So hence this whole practice, we need to find ways to get housing. so in 2023 we did a study we wanted to increase development in central issaquah eco northwest did a report for us that said essentially that occlusionary zoning as it existed doesn't work and was a deterrent to residential development especially without the multi-family tax exemption we really needed to revisit that so we're doing that now we needed to look at parking and densities and the development bonus program needed to be revisited because it wasn't doing anything. It wasn't contributing either. So, um, so as a part of our promoting building is a quad investments, BAE and ARCH, as we talked about, were retained. And BAE attested four different prototypes that Matt will talk about in just a minute. But they also looked at the following. They looked at our current policies. How do our current policies work? Looked at our pioneer program. How is that working by itself with residential development? Looked at the 12-year MFTE multifamily tax exemption and how is that helping? Impact fee waivers, what kind of a dent is that making in development? And then just land use incentives that we have, such as the development bonus program. And those were all looked at individually to see what kind of an impact each of those is having. And that's what's going to be discussed now. Very busy out there. So now I'm going to hand it over in a minute to Matt Ferris from BAE Urban Economics. And he's going to, because you all know me well enough to know that I don't do numbers, so I am going to let Matt to talk numbers with you.

MATT FERRISS. Awesome. Thank you, Kristen, and good evening Planning Commission. So as Kristen mentioned, my name is Matt Ferris. I'm a Vice President with BAE Urban Economics. We provide real estate market analysis to support public sector jurisdictions throughout the country. We've been working in the Pacific Northwest for 10 years, really understanding the dynamics of the market here. And so I'm going to start before we get into the four prototypes Kristen mentioned before we get into really the sort of complicated data analysis. I'm going to go over three data points that actually the previous speaker mentioned because we have presented these stats before. But, you know, I think a really critical story about understanding Issaquah comes through in these three slides. So the very first slide on your screen right now is just showing the median sale price per foot in the city of Issaquah and looking at sort of the growth over time. What you see is sale prices really dramatically increased in Issaquah between 2020 and 2022. They went from $382 a square foot to over $600, which is a 60% increase. If you even that out sort of since 2022 with interest rates and sort of other market dynamics, you sort of see that over that time period, home sale prices went up by 40%. Next slide. Also, as referenced previously, is the rental rate increase. So this is a longer time period because the data is available. But when we zoom in to that same time period, sort of post-pandemic 2020 to 2026, rents in Issaquah have increased. But the rate at which they have increased is 28%, whereas, again, that sale price went up by 40%. Next slide. So that rent and sale price is obviously the sort of revenue and value side of the equation for the properties. The other side is, well, how much does it cost to deliver these developments? And this is a construction cost index that's tracking hard costs. throughout the Seattle MSA. And as the chart shows, the cost to build housing in the Seattle MSA was sort of inching along between 2010 and 2020. And when we hit the pandemic with all of the sort of challenges that brought about, we have seen a really stark increase in construction costs between 2020 and 2025, a 40% number. I think the last thing on that prior side, which we don't need to go back to, is we're starting to see those stats even out. What I think is critical about those three numbers before we get into the prototypes is it sort of shows a little bit about what's going on in Issaquah. You've got costs have increased 40%, sale prices have kept pace, and rents have not. And I think that speaks to a little bit of the challenge of not seeing the kind of pipeline of really dense rental housing that maybe we were receiving prior to the pandemic and you're seeing across East King County. Next slide. So with that, we will go into the sort of prototypical development analysis. Next slide. We're going to talk about, to begin, just an overview of the prototypes. We don't want to kind of overwhelm with numbers and information tonight. Instead, we're going to sort of talk about the prototypes and then talk about the key findings and then talk a little bit about how different policy decisions influence development feasibility. So we looked at these four prototypes, sort of that really dense five stories of wood frame construction over three stories of podium parking. It's not as dense of a prototype that we see in the sort of greater East King County area. We'll get a six story prototype sort of stepping that down. to a four over two. And then we look at a garden-style apartment where, you know, your surface parking, sort of three to four stories. And then we did look at four sale townhomes. So harken back to that prior story of the sale price growth. Our developments are all on two acres, sort of that typical site that we're seeing in central Issaquah. We have densities ranging from 20 units to the acre in the townhome project, which yields 40 townhomes, all the way up to 100 all the way up to 100 dwelling units to the acre, getting to 200 total units. We've got the parking space information there sort of meeting the standards of parking demand today. The bottom section here talks about the development cost. And we break that down and we show that at a total level. So to build your eight-story podium park project is almost $126 million. When we look at that on a per unit basis, that's $630,000. And those numbers are sort of similar on the six-story prototype and slowly get cheaper. as the development materials get more efficient for the garden style apartment. When you look at townhomes, just due to their size, it's costing about a million, a million one to deliver these units. And I show these numbers because as Kristen hits the next slide, what you'll see pop up is the value of these types of units to the investment community today under current market conditions. So what we'll see as that as we click is that eight story apartments and six story apartments are the value of the units are much lower. than the cost to deliver. So we're seeing that to the prior sort of comment that the feasibility is really challenging to deliver these eight-story, six-story podium projects because the rent that the projects are generating is not sufficient to sort of cover the development cost. Conversely, when we look at the townhomes, The townhome sale prices have increased significantly in Issaquah. And so the townhomes are selling for a million two, a million three. And so the feasibility of those types of developments is quite high. And we're seeing a lot of that kind of construction. Next slide. And one more. Those are the numbers there. You see the value. of the projects at $250,000 less than the cost of building. You can go next slide. So from a kind of high level initial findings of sort of how the development is working today, you know, some of the things that we find in our analysis is construction costs have increased really significantly in the last five years outpacing rent growth. And that makes for really challenging market conditions for market rate development. High density market rate, multifamily rental development, therefore, is very challenging due to those market conditions. Conversely, you do see that home sale prices have kept up with construction costs. So that pipeline of townhomes and single family homes appears to be continuing onward due to the fact that the sale prices can cover the construction costs, unlike what we see in the rental market. We see that those townhomes tend to be more feasible. Kristen introduced the pioneering program, which we'll talk about in a couple of slides. But that pioneering program where the city reduced the affordability requirements and offered a multifamily tax exemption has really improved feasibility when you look at it at sort of its dollar value. But we still know that feasibility challenges remain because it is such a high hurdle for market rate development to become feasible. And those incentives alone have not gotten them across the finish line. It is also worth noting, and Kristen did a great job introducing this, you know, the city, our analysis is sort of looking at current market conditions and current trends. The city is also exploring additional policies that can improve development feasibility, land use incentives, decreasing development timelines, increasing site capacity, et cetera. And in our analysis, we find that those also offer significant opportunities to improve development feasibility. Next slide. So here we are as sort of a spacer page where we talk about, I'm gonna now go into sort of the policy considerations for planning commission and the city of Issaquah really to kind of consider balancing, right? The city has options to improve the feasibility of market rate, you know, investor driven housing. But there should be some consideration of balancing the inclusion of affordable housing, city offering property tax incentives and fee waivers, as well as land use requirements. We're wanting to sort of run the numbers and do the math to help inform those policy decisions. Next slide. We're going to start with the affordable housing, inclusionary housing ordinance. So in the green here, we talked a high-level summary of the current affordable housing requirement in central Issaquah. For rental projects, that's 12.5% of the units. It's 60% affordable to households. That makes 60% of the area's median income or below. There's an alternative option to do 10% at 50%. For for-sale projects, it is that same 12.5% or 12%, but the AMI level. So the households that the units are affordable to is a little bit higher. So 12.5% of for-sale units affordable to 70% AMI households. in the orange we talk about the city's 2024 pioneering program and what that pioneering program did was decrease the uh percent of units that was required to be affordable kind of maintaining similar uh ami levels so the the households that the units are affordable to And in addition, offering an incentive. So the pioneering program applies to the first two projects in central Issaquah that deliver between 100 and 400 housing units. For both rental and for sale, it changed the affordability requirements to 8% at 60% AMI or 10% at 80% AMI. All of this with a new and the inclusion of an eight-year multifamily tax exemption, meaning the property does not pay property taxes for eight years. And that brings a tremendous amount of value to a project which we'll quantify in a future slide. The one point of sort of nuance here for rental properties, the multifamily tax exemption brings a lot of value because it is the same owner that sort of manages the whole property. Conversely, when you offer a multifamily, a short term tax exemption for for sale units that benefit sort of short term benefit flows to a purchaser, which is great, but it doesn't actually bring upfront value to improve development feasibility. So just a little nuance there. Next slide. So on this slide, we're going to sort of talk about the impact of the current policy, what the pioneering program has done, and a different alternative that the city could consider. So again, this current inclusionary housing ordinances, we modeled 12.5% at 60% AMI. And what you see is the pioneering program, which decreased the percent required, improved the feasibility of typical dense development, so the eight-story prototyping. by about $1.2 million. So a big improvement. We do at the bottom here talk about and calculate, well, what is that total benefit as a percent of total development costs, right? It costs $125 million to build these projects or the R prototype. So making a change, improving the feasibility by $1.2 million equals less than a one percentage point change in terms of the total development cost. that makes a difference. But when we're talking about the real significant feasibility challenges, that alone is sort of a drop in the bucket in terms of its current feasibility challenges. Some other alternatives that could be considered is further decreasing the affordable housing requirement. We cut the, just to study the economics of the impact, we cut the pioneering program again in half to 5% of the units at 60% AMI. And you see that the impact of that improves feasibility by $3.5 million relative to the baseline, the current program. And so that's about $2.5 million better than the pioneering program change. Another alternative that other cities have explored is increasing the percent of the units. So 20% allows a deeper tax exemption, which we'll talk about on the next slide, but increasing the affordability level of those units. So an 80% AMI unit is less impactful on project economics. Kristen, you can go back a couple slides. Sorry, there you go. No, no, no, you're good. I previewed and cued something that I didn't mean to. So 80% AMI units are affordable to households and the rents that they charge are actually quite similar to market rate units when you look at studios. Not so much when you look at two and three bedroom units. There is a discount there between market and 80% AMI. But charging and sort of crafting a policy where the rents are 80% AMI is getting close to market. And so the impact of the affordable housing ordinance is not as strong. Next slide.

We're going to pause this for just a second. We can hear you, but it's not super loud. We're going to see if we can turn the volume up.

That'd be great.

OK.

I'm holding my mic as close to my mouth as I can because I did get a message asking to speak up. So just let me know if you can hear me better.

Hey, Arsene, are you able to turn this up at all?

Let me know if you'd like me to talk it off.

I think we figured it out. Let's continue. I will go forward, yes?

Yep. Yes, right here. Assuming you can hear me a little better, I'll continue to try to speak up. But at the bottom of each slide, we're going to sort of flash on the screen sort of some of the policy considerations that the city could consider associated with each topic. So for inclusionary housing, we sort of walk through different alternatives. On the sort of left end of the considerations where you sort of maintain what you currently have, which is 12.5% of units affordable to 60% AMI, and you sort of require that and assume that the market will improve to meet feasibility challenges and that when they deliver units, the units will include affordable units. As you move across sort of the policy options, a sort of moderate change might look something like making the pioneering program more permanent so that eight that decreased number of affordable units or percentage of affordable units in return for an MFTE, the multifamily tax exemption that brings a lot of value to the table. On the far right, the policy of the city could consider significant changes to the requirements, dropping the policy requirements even further. In our slide, we looked at five percent of units. you could also consider increasing AMI levels. So making that sort of impact of the affordable housing ordinance less impactful on the overall feasibility of traditional market rate development. And at the end, we'll have a big matrix to sort of talk about all this in more detail.

Next slide, Kristen.

So we can't sort of talk about the affordable housing ordinance without acknowledging the other side of the equation, which is the city's incentives. So one of the major incentives that the city is offering via the pioneering program and that other cities utilize to incentivize housing development, more often than not, housing development with affordable housing units mixed into the development is the multifamily tax exemption. So what this does is, as I alluded to, it forgoes property tax or the city would not receive property tax for a certain amount of time, typically and again in exchange for public benefit like affordable housing. Again, some cities have used it to stimulate housing writ large. MFT is currently one of the best tools in today's market. A lot of cities like Issaquah have unlocked development, sort of allowed a lot of capacity on sites. And so now there are these MFT as a way to financially incentivize development while offsetting the impact of any affordable housing or local policy. So currently the city has no MFTE except for in the pioneering program, which of course doesn't bring any financial benefit to the development community building housing and right now under the current code housing with affordable housing included in it. Under the pioneering program, you can see how impactful an eight-year MFTE is it improves development feasibility by about $5 million, by almost $5 million. So that is bigger than any impact the city could make on reducing the affordable housing ordinance.

The city could consider

Going even further to 12 years, heck, even 20 years of MFTE. And Kristen, as you hit next slide, one thing to note, as you get into these larger MFTE periods, the state actually puts requirements on if you were to offer a 12-year MFTE, state policy requires that 20% of the units be affordable. So while that has a really big impact, positive impact on project feasibility, it would need to be paired with a 20% of units set aside, which is why on one of the prior slides we looked at 20% affordable. Next slide. So again, at the bottom here, thinking about laying out the policy considerations, if you go back one, Kristen, is just, you know, the city has options. You could maintain your current MFTE policy, which is, not offering one at least without the pioneering programs that he could consider amending or adopting a longer time period or extending the sort of pioneering program to more development by offering say the eight-year MFTE policy which currently is used to balance the impact of the affordable housing ordinance INCLUSIONARY HOUSING ORDINANCE IN CENTRAL ISSAQUAH. CITY OF COURSE COULD CONSIDER SIGNIFICANT CHANGES TO THE MFTE POLICY WHICH COULD BE EIGHT YEAR MFTE WITH MUCH LESS AFFORDABILITY OR EVEN GOING INTO THE 12 OR 20 YEAR MFTE TIME PERIODS AGAIN WITH THE CAVEAT THAT ANY LONGER TIME PERIODS COME WITH MANDATES FROM THE STATE THAT A CERTAIN PERCENTAGE OF THE UNITS BE AFFORDABLE. NEXT SLIDE. So we looked at some other sort of incentives. We wanted to recognize, again, that this is part of a multi-step process that the city is taking. The city is looking at other incentives, things like density bonus, which don't always translate into purely sort of calculatable impacts, although we do our best to estimate every project is going to be a little bit different in terms of the impact of a density bonus. We look at the city currently offers fee waivers on the affordable housing units. We sort of demystify and talk about the impact of what that fee waiver program offers. We similarly sort of built a version of a model that says, hey, if the city is able to adopt a lot of these land use incentives, land use changes, design guidelines, development standards that improve the delivery of these properties, it decreases the cost of delivering them, whether that's through the entitlement process or different materials developers can use to deliver projects. If we are able to achieve cost savings, which is the goal of some of those incentives, we show the impact here. So what you see is a density bonus, a 10% density bonus allows developers to get more units on the site. Today's market value is about $2 million on our eight-story prototype. The fee waivers, which is a really sort of big ask of the city to waive impact fees, which is how you fund a lot of your infrastructure. But when you waive the fee waivers on the affordable units, which is what the city currently does, it's valued at about $328,000. So in the terms of a $128 million, $125 million project, the fee waivers, again, are sort of a small impact on feasibility. What has sort of the largest impact of anything... Oops, I was muted. One of the largest impacts that we studied is that sort of figuring out how to make the cost side of this equation more efficient, more faster, more efficient. Those cost savings directly translate to a cheaper development, a cheaper... cost of building not a cheaper development by any means just a faster more efficient delivery and that can save 10 12 million dollars on this project which does have a very significant impact on development costs and just want to highlight that to recognize that that the city is taking the right steps to meet some of those cost savings Next slide. So I will leave you with this matrix. Oh, one more. Sorry, Kristen. I'll leave you with this matrix where we sort of wrap all of this up into a sort of policy considerations list. On the left of each policy consideration is maintaining the current policy. You could continue to do all of these things, which is the current inclusionary housing ordinance, not offering MFTE, not offering Well, offering fee waivers, but it's on a case-by-case basis for development. Offering the density bonus, which is a fairly complicated bonus system where with every incremental square footage of development, I have to set aside a certain percentage of units. We have inclusionary housing and this density bonus program, which can be somewhat complicated to navigate. Um, you could consider sort of moderate policy changes balancing as the, as the pioneer program does today, which really balances the impact of the affordable housing ordinance. So 8% of the units, but we're giving, the city is giving an eight year MFTE. So the MFTE is being used to sort of balance the impact of the affordable housing ordinance, uh, from a multifamily tax exemption basis. That's the eight year MFTE program. Again, similar to the pioneering program that's offered today. The city could look at fee waivers on affordable units. And when it comes to the density bonus program, you know, it is sort of a challenging process to navigate now. The city could consider offering that bonus in exchange for a more streamlined development, maybe smaller public incentives that are currently being offered. And when you think about, you know, very significant policy changes the council and planning commission could consider, It's on the affordable housing side, it's decreasing the required units or allowing higher income levels so that those rents are closer to market, meaning they have a smaller impact on the project. You'd get more, it would mean that market rate development is more feasible, but those rents that is delivered in those projects are quite expensive. From the multifamily tax exemption basis, the city could consider offering the eight-year MFTE, but with smaller or more limited affordable housing requirements. Fee waivers, the city's currently offering those for affordable units. It is challenging to offer those to a higher portion of the units. And then when we look at the density bonus program, the city could consider allowing the density bonus program in exchange for very little public benefit. The city actually could even consider just getting rid of the density bonus program and sort of giving that density through the development sector, developers through land use. The very bottom line is sort of these other catch-all cost savings. This is sort of again hinting that the city is improving throughout this process, improving the permitting process, reducing design guidelines, reducing other impediments, and with that will come significant changes and improvements in development feasibility. There are some cities out there that are going even beyond that and really streamlining the approval process, which I know the city is going to explore. So with that, I will be here to answer more questions. But I want to hand it back over to Kristin to sort of walk through the questions that we're going to talk about tonight.

And I'd like to walk through the questions. But first, that's a lot of information. So do you all have any questions for Matt before we dive into discussion?

I think we have questions. Great presentation. Thank you, Matt. And thank you, our in-house wizards, for trying to turn up your volume. You know what I was thinking, Matt? I don't know if on your end you can turn up your microphone output. Maybe give that a shot, see if that helps a little. Okay.

Yeah, is that any better? I was a 7 out of 10, and I'm a 10 out of 10.

It might be us, maybe not you. Okay, well, we appreciate it. I mean, we could hear. It's a little hard.

It's kind of like in class when a teacher speaks really, really quietly so that you have to listen. And you can still hear the teacher.

Tricks of the trade. Okay, I do believe I saw Commissioner Adair with her hand up.

Hi, Commissioner Adair. Thanks for this great presentation. If you could scroll back a couple of slides, I have a question about the savings for the MFTE of the eight year versus 10 year, I think it was forward. Okay, so this one, when you're looking at these total costs of $4 million and $6 million, does that include for the eight-year MFTE any affordability requirements, or is that without affordability requirements?

It's a great question. We really wanted to kind of dissect the impact of these individual policies. So the eight-year MFTE that's shown on your screen, is just the impact of the eight years of property tax exemption. So while the pioneering program comes with affordable housing requirements, that is purely the impact of the eight-year MFTE alone without any affordability requirements.

Thank you.

Vice Chair Patterson.

A quick question on this slide as well. With the 12 year and the state policy requirement of 20% affordable, do we know what AMI that affordability is at?

So some jurisdictions have, you can go up to 80% AMI. So on a prior slide, which we don't need to go to, we do have a version where we looked at the impact of 20% of units at 80% AMI, because when cities are moving forward with a 12-year MFTE, that is the most common mix of units that we see. So 20% at 80% AMI in return for the 12-year MFTE. Great.

Commissioner Kress.

I'm still Commissioner Kress even though I don't have a name tag. So questions around MFT since we're on the slide. And I'm not sure if it's part of this study or if you have other data that looks at the longer term impact to the jurisdictions and especially the school districts when long term MFTs, whether it's 8, 12, 20, when you take that funding out, but yet now you have a lot more people that need services. And has there been any study or data on that? Because that's an important element as you look at the balance sheet for making those types of decisions.

I'm happy to start. You know, it's a broader question about sort of the impact across the state of Washington. Washington is one of the main states that offers multifamily tax exemption in return for affordable. You know, I don't have any information at the tip of my tongue. at my disposal that speaks to sort of the jurisdictional challenges or opportunities, I think you're absolutely correct to bring them up. I think every jurisdiction, when considering offering a multifamily tax exemption, should also be considering what are the downstream impacts fiscally. I unfortunately don't have any information at my, I don't know if there's a research report out there. I think it's wise, though, that you're asking that question. We do have...

Oh, OK. We do have Andrew Bjorn here, who I think has some information.

Oh, that'd be awesome, because this has been on for a few years, right? No, no, no, MFT period in the state. So maybe there's some learnings from somewhere else.

Yeah, so nice to see you again. So we're currently doing some research on looking at kind of the longer term impacts. It's not free money. mean I think that that's the main thing and I think that we've talked about that before it comes from two different sources one is that the city loses revenue the other is that some of the tax burden is shifted on to other taxpayers from the super preliminary back of the envelope calculations that are just done in the past it's usually about 80% of it is shifted 20% is foregone revenue but the two things to keep in mind. One is that all of this needs to be considered as a whole and not just in terms of one individual project. There are a number of projects that get MFTE. That can be a little bit more of a cost, and that needs to be considered, like you're saying. The other, and you pointed this out as well, is that it's not way that it's structured it's not just an impact to the city it's also an impact to any other taxing jurisdiction so schools library districts in particular are the most impacted because the greatest proportion of their revenue is derived from property taxes but it's true even of the county and of the state so that's something to keep in mind

Commissioner Ulner. Just a suggestion, going back to your very early slides where you looked at increases in rents and construction costs over a period of time. And this came up in a different context with something else I've been working on. But it would be helpful to graph along with those increases what the increases have been in CPI or mean wages over the same periods of time to really start to get a better sense of where the gaps are.

Great feedback. Thank you.

Hi, I had a question about the AMI that's targeted in the study. It looks like you start at 50% AMI, and then our big, huge gap of 72% is under 50%. So is this just a study to stimulate some development, and then we're going to try to claw something back to get the gap that we need for the lower AMI? I'm a little confused on, yeah. I'm looking at that one too, the housing targets. So we need 72% under 50% AMI.

So anything under 60% is typically going to require other funding from federal government, state government, different agencies. So right now what we're talking about is development for market rate developers.

Okay.

So that's going to be your 60 and above.

Commissioner Adair.

Hi. Would a potential option be removing affordability requirements but not providing an MFTE? Does that make sense? Because it looks like if you even reduce the affordable housing requirements to 5% at 60% AMI, the developers are getting a savings that is similar to the eight-year tax relief, correct? Am I understanding that correctly?

Yeah, I think that the way that I would summarize the pioneering program is that the city is using MFTE to sort of fully offset the impact of the affordable housing ordinance. If you actually run the numbers in our models, we're showing that the value of the MFTE is actually larger than the impact of the pioneering affordability requirements. So in theory, if you got rid of both of them, market rate development would actually be worse off. So the MFTE is a really valuable tool. It's currently being used to offset all of the impact of the affordable housing ordinance, but doing very little to subsidize and help support the full project. So if you got rid of both of them, you'd still be facing all of the feasibility challenges that we've highlighted today.

So if you got rid of affordable housing requirements, that wouldn't be beneficial? Am I understanding that correctly?

From a feasibility perspective, if you got rid, I was under the impression the question was, what if we don't do MFTE and don't do affordable? You'd sort of be throwing away or you'd be getting rid of an affordable housing ordinance that has an impact on feasibility, but the MFTE brings value to the feasibility. So those kind of net each other out. So if you got rid of both of them, the impact on feasibility would sort of be quite neutral. If you kept the MFTE but got rid of the affordable requirement, then the MFTE would be subsidizing and benefiting the delivery of the market rate housing project.

Is it fair to say, Matt, that basically it's think to even carl's point earlier it's just the feasibility as far as building with all the construction costs what they're being especially the rental ones they're they're just they're not keeping pace and it's it's not necessarily one thing but it's multiple factors and if you got rid of the affordability piece yes that would be a boon for developers because they just keep the mfte to fund their you know help subsidize some of their project with both of them, which was what the city's goal was, was to originally try and kind of balance that so you could get the affordability piece to get rid of the MFT and just keep the affordability. That's a sinking ship.

Oh, I was saying to get rid of the affordable and get rid of that. Right, right. So it would be like you have 0% affordability requirements, but we're not. I'm just, this is just a hypothetical. It's not, I'm just playing around with hypotheticals.

Well, what's interesting too is I think Carl made the comment that we didn't look at the eight-year MFTE maybe as a city, but it does show in Matt's presentation that eight-year MFTE, and basically if I understood you correctly, Matt, that was, you know, in its essence without the affordability requirements on that one slide. So you're seeing that, I forget what that percentage was. 3.7%, so that was a boon. But what's interesting is when you take it farther, if you get the 12-year MFTE with 20%, at 80% AMI, that's actually better for developers, according to the numbers, correct Matt?

That's what our numbers suggest under current market conditions because 80 percent AMI is quite close to market. And so you think about the impact of that affordable housing ordinance is quite — is — gets, you know, minimized because you're actually not getting a huge discount on rents, but you're giving 12 years of tax exemption, which on — MS. Matt, you just got quieter.

MR. Didn't think it was possible, Matt, but — MR. Who knew? MR. We appreciate you struggling with us, but — yeah. But I think we caught that, and yeah, so I think understanding, I think we're both on the same page. Commissioner Krause?

So if I look at it, we unfortunately have been combining different goals, which makes things complicated and not clear. In one hand, we have a goal of just building more rental units, period. And I think this is really about rentals, not Ownership because ownership you can't do affordable in this area. That's just let just I agree with the statement That was made in the packet on that one. I think we've talked about that here So let's just say this is all about rentals. You have two goals. You have building just overall, and then you have having some affordable units. So to simplify this, I have a question that there's been an analysis, and I'm gonna try to, this is gonna be super base case. I'm gonna say, don't think about affordable for this question. Not saying it's not important, but for this question. And if you look at, and Carl probably knows this one too, is like, if you look at the land cost The construction cost, just to be able to do a market rate apartment building, in addition with what interest rates are now, what percent to make this feasible where someone would build something, does it need to be that's different than it is now? Is it off by 5%? Is it off by 30%? Because if it's off by like 30%, all these little things that we're batting around isn't gonna make a difference. to get things built even at market rates. So I'm curious if we understand that as the base case, and then you can start layering on and understanding the differences of, okay, well, if we care about having a few units, and if you say 5% affordable, none of those are gonna add up to those numbers that are on that slide. So I think affordable is probably gonna go into old stock that's already existing around the city. But going back to my question, do we have, for Matt or for Kristen, since you have microphones. Do we look at just base case, market rate, how far off all those pieces are to even understand the scope of the problem?

Matt, does one of the slides in the appendix have that?

Well, it actually is. If you go to the prototypes slide, if you go backwards, Here, one more forward so the red and yellow show up. What I think you see here, if I'm just looking sort of 2 thirds of the way down, the cost of building, to the commissioner's point, the cost of building a single unit in this 200 unit project is $630,000. The value of that unit, of a market rate unit, to an investor, right? I have a ton of money. I'm coming to Issaquah to build these housing units, and I'm going to value the rental income generated by that unit is $410,000. So it cost me $630,000, but it's only worth $400,000. We're a ways away from feasibility. I do want to make a couple of points, though, which is that solution is not just solely rent increase or just cost savings. There's also capital markets and interest rates. So, you know, there's a lot going on that's making this so infeasible. We're seeing some positive movement in some of those indicators. But certainly, if I bluntly need to answer the Commissioner's question, the prototypes are quite a ways from feasibility, the market rate components of the prototypes.

The development cost versus the construction cost versus land. Is there like a ratio? Is it like 20% land, 80% construction? How should I think about that $125 million?

Yeah, so our cost of land per unit is $50,000. So if we're building it for 630. So it's mostly construction.

It's very little land. So unless you solve the cost of construction, and maybe we're thinking about it wrong, and do you have to do modular type? Something has to change in a huge scale. Otherwise, it's just the math doesn't work. Maybe I'm just not getting it. And I think the 12-year, 5-year, 8-year, 20-year, we're kind of just nibbling around the edges on the bigger issue, which is the feasibility. And maybe I'm being too negative. Debbie Downer on this one. But I'm just trying to understand that and what can be done that could be different to allow a different type of thing that's built that's much cheaper but still meets the requirements that we, because these buildings are going to be around for 75, 100 years, that we don't cut off our nose to spite our face. And whether it's modular buildings or something like that. So I just wanted to tee that up. If someone had the answer, we'd be doing it. But I think it's something to consider.

Thank you, Commissioner Kras. And I apologize, we also have Commissioner Millinder-Irwin online? Commissioner Zakaroff? I don't see him on my little screen. There they are.

For me, this is Commissioner Melinda Erwin.

Yeah, we can hear you, Leslie.

OK, thank you. I have a question. A couple of slides back in regards to the moderate policy change for the eight year MFT. I want to know if there were any affordable units factored into. That particular number. It was the 4.6 million.

Yeah, that one, for that specific slide, we were just trying to parse out and tease out the impact of just offering the tax exemption, just to put it into context of how much value is that bringing to the table. So in that specific slide, it is only showing the impact, the positive impact of the MFTE policy. So the $4 million represents the impact of eight years of MFTE. There was no affordability built into that slide.

Okay. Thank you.

Of course.

Commissioner Allner. Just a clarification. Can you, Matt, tell us what you've assumed as a cap rate for developers?

I can, yeah. So right now when we look at capital markets, we're using a cap rate of 5.25%. And when we're actually building our model to determine feasibility, we're looking at a stabilized year one untrended yield on cost of 6.25. Okay.

Thank you.

Of course.

Commissioner Matthews.

This is kind of a weird question, but one thing that Washington has that other states don't have is tax on labor. And so I'm assuming all of these big projects you're doing has a 10% or whatever it is in the county you're in, tax on the labor when you're building these apartments. Has the state ever thought about them giving a tax exemption for building while we're trying to build all of these units? I mean, I know that's something out of our jurisdiction, but it would be kind of nice if this is their goal for us to meet, that they kind of put in that hand to kind of give us a tax break on labor. Because it does, I mean, I did construction across the West Coast, and this is the most expensive place to build anything, really. And the labor tax does not help.

I can take a stab, which is to say I know the state of Washington is doing just about everything they can. There's a lot of statewide policy, going back to a prior commissioner's comment, states looking into housing innovations and trying to figure out how do we make it cheaper, because that is more of a state or regional level. I don't know specifically, Commissioner, whether they're looking at construction taxes or any of the taxes that are paid to labor. I do want again to just acknowledge that the state is aware of this challenge. This challenge is told to most cities throughout the state that costs have gotten so high. And so I do think that the state is doing a pretty good job of trying to look in the mirror and figure out what they can be doing to address the cost side of this equation.

Chair Voice, would you like to move on to public comment or do you want to continue with questions?

Let's give it one more round. Does anyone have any further questions for Matt? Well, thank you, Matt. That was a fantastic presentation. It is a lot of information. I think we'll probably all be reading these graphs and looking at these charts again, trying to find which dial to turn up, which dial to turn down to try and find and strike that balance that we're all trying to find. I won't be the Debbie Downer that Commissioner Kras is. We can find it, it's out there. So we'll move along and yes, it's not something we often do, but let's see where I am. Okay, as noted at the beginning of this meeting, we are going to provide a second opportunity for public comment. To hear feedback on tonight's presentation, or on any other general topics. So we'll open up the meeting right now for public comment on this topic. Is there anyone in the room that would like to speak? And again, we'll keep this to five minutes or less. Carl, the floor is yours.

I'm back. Carl Charette, Vivmark. Just a couple comments to react to the presentation, which I think, Matt, was very well done. One item I did note was that the Pioneer program is represented in your presentation, I believe, is 10% at 60% AMI. My understanding is it should be 10% at 80% AMI, or I think it's 8% at 60%.

Or 80% at 60%.

Sure. And I guess I just want to make it clear to the commission that when we're benchmarking our alternatives versus the Pioneer program, which to date has seen no use, although we are actively talking about that program, that we should be comparing it against the 10% at 80 as your baseline, just to make sure the math all ties out. I also think there's a bit of a fundamental misunderstanding of MFTE. And unfortunately, I've heard this a few times. And so I do want to just make sure that I've corrected the record from at least my perspective. And if the commission has any questions, there is a full analysis of the MFTE and the tax shift that I believe was provided to council by Heartland. It was commissioned by Lakeside Industries by Heartland. commissioned by Lakeside for Heartland. Sorry, I have it backwards. Commissioned by Lakeside and produced by Heartland. Anyways, point being that there is no levy loss for schools, for libraries. I want to make that abundantly clear. A tax abatement program is fundamentally a tax shift, a temporary tax shift, and it actually grows the tax base. So happy to talk to anybody offline about that, but there is a fair amount of research by Department of Commerce and independent groups who will tell you that if anything it grows the tax rolls yes there is a temporary shift in that tax revenue but the assessed tax base of the city grows and taxes are still paid on the land value under any MFTE program the only exemption is for the new vertical construction and exclusively actually the multifamily portion of that construction so any commercial would be exempt so I don't want people to think that this is something that takes money away from schools or takes money away from library that's not the intent of the program and it's very specifically design that way. I absolutely hear everyone on the challenge of the development economics. I don't seem like this is all a waste of time and there's nothing that we're doing here. I don't disagree with many of the assumptions in that analysis. I think we're slightly closer than the consultant is showing. We're on the precipice of our deal at Trailhead, which basically falls under the same program to making sense. I wouldn't say that it's a deal that we're going to go, you know, everybody's going to go get rich off of. It's a deal that we think makes sense in the long scheme of things if we can get a few things structured right. So the small changes you all are making do make a big difference. Tax exemptions are a big piece of that. I would also highlight just in the math on MFTE, it does get a little bit wonky, but when you get into projecting tax abatements and exemptions going out over multiple years, Sometimes there is a inclination to just take the gross dollar exemption of X amount of dollars are saved over the period of time. We do always try and bring that back. And I'm not sure how it was presented in the presentation, but we always think of it in the net present value of that. So the value of an exemption in year 8 or year 12 or even year 20 is less than the exemption of today. So just something to think about when we're evaluating that. Maybe there's a big gross number, but as it relates to my pro forma, it might be slightly smaller because we're discounting that cash flow back. Um, And finally, just the sales tax break. I absolutely hear you, Commissioner. I think that's an area that we've spent a lot of time in Olympia talking about. And sadly, with the budget condition of Washington State right now, it's been pretty flatly shot down at every stage. And candidly, we're generally told, well, that's what MFTE is for. That's the way that you all can be able to move through these economic cycles. I disagree and absolutely see the value of the economic development of it and would be happy to chat with anybody about that. But it is been brought up well-intentioned and has not gotten any traction. So I wouldn't rely on it, but it's something that does continue to be a discussion.

Happy to talk offline if anybody has questions.

Thank you. Thank you, Carl. Would anyone else like to speak while we have the floor open? Somebody who clocked in while we were having that great presentation. No? No. OK. commissioners any any thoughts any other questions I mean obviously you can definitely talk to Carl after the Commission's meetings Matt thank you again for the presentation that was great it's very helpful Kristen promised us a information packed meeting this evening and it was and it's a real life eye-opener and like I said we've got a lot of different things to look at as you know this continues to move forward this PBI or what's it called

promoting business investments.

I got the acronym right. That's what matters most.

Oh, I wasn't sharing. I thought I was sharing. We do have a little bit more. I always forget that last click. All right. So after this, on September 1st, we go to PDE. And PDE, what we're looking for tonight, are some general recommendations moving forward on which you all think we may want to take a closer look at for actual code amendments. And these can be, you know, for the next two years, you know, market is cyclical. For the next two years, we want to put this in place, you know, as a sort of amend the pioneer program, or these can be long-term changes that we do. I do want to remind you that PDE's direction on the floor area ratio, which we haven't really talked about tonight, was to increase FAR requirements in mixed-use residential in coordination with inclusionary zoning development bonus and multifamily tax exemption, and then verify if the FAR targets are actually buildable. So we have talked with the development community about things that we're proposing, and we've heard yes. So we'll see. And then, delay. The next one is about implementing the ECO Northwest report, which is all the other mandates and requirements that we have. And one is to their potential action is to establish an MFTE program with right-sized inclusionary development, inclusionary zoning development bonus and FAR requirements. And then verify if the density bonus is a desirable incentive. Specifically, at what point does achieving the new FAR force a switch from wood frame to concrete construction? And at what point does that switch make the bonus uneconomical? An FAR bonus is worthless if achieving it requires a construction type change whose premium cost exceeds the bonus value. So we have a list of considerations for you all to think about tonight. And when we move this forward to PDE, we want to talk about why you're making the recommendations that you're making as well. So as far as our affordable housing requirements or inclusionary zoning, where in the urban core area, we require 12% of your units to be affordable at, I think, 80%. And at this point, Matt probably knows better than me. But is this something that you want to maintain? Well, yeah, maybe starting with the hard one. But is this something that you want to maintain? Do you want to change those numbers? As you saw, decreasing the number of required units and also decreasing the AMI level improved construction costs and improved that. Is that something that you want us to have to look at?

changing those numbers and if so sort of what ranges do you want you want to take that around the first part okay who would like to go first if any Commissioner Kras you know I will so as we talked about before changing them around a little bit is this a fool's errand I mean If you took them all away, let's say we have no affordable requirements, are stuff going to get built or not? If we're saying no, then I'm curious. Changing little things is not going to make a difference. I would love to learn otherwise. So it's hard for me to change something to something else if I don't think that would do anything. I'd love to hear more of the rationale of what the recommendation is of what to change in terms of some of these different levers.

I do want to remind you that this is one piece of what we're looking at in 15 different items. So we've already changed setbacks, which make a difference. We've already changed transparency, which will make a difference. We've had other small changes to go with this that make a difference. So not doing anything isn't going to do anything. Does that make sense?

Yeah. But you're asking, like, should it be eight years, 12 years, 80%, 60%? I think these are all, like, I don't know. I mean, what's the recommendation on that from the learnings? Because I don't think those are going to make that big of a difference. I think the things you just mentioned will make it, the biggest line item is helping them to develop things in a more efficient way was the biggest savings I saw in all of those things. So focusing our energies on that And I think it's going to have the biggest benefit to hopefully have something built both for market rate as well as affordable. So I have no opinion on 8 versus 12. I just prefer not to walk away from 12 or 20 years of tax base without knowing what the true impact is. So I would say don't do anything different on those things.

Kristen, I've got a question. The urban core is where the PDE recommended taking out parking requirements completely, correct?

Correct.

And that was just for the two pioneer, that was for the urban core.

Urban core and mixed-use residential, mixed-use central as well.

The pioneer program is in the urban core, correct?

And mixed-use central as well.

And the pioneer program is still just the first two certain amountings. Why don't we take the affordability requirements off those two units and return back to what the original recommendation from the pioneer program was, which I think was no affordability requirements. Let's burn that development. Sometimes it takes somebody to jump in the pool first and maybe other developers follow. But I think that was the original recommendation was from us, which was, so they've already did. of some big heavy lifting by, you know, and that's a PDE, the full council hasn't voted on it. But maybe we say, okay, for the Pioneer project alone, which is the first two developments that come at a certain unit, let's see what that eight-year MFTE does without the affordability, without the inclusionary zoning.

Let's see.

I mean, it's, we're not, again, Kristen mentioned the cyclical nature of, you know, markets. Okay, again, this is two developments we're talking about. We're not talking about multiple, multiple developments. We're talking about the first two that put in their application.

And that gives clarity to what I said. It's like, what are your priorities? If your first priority is to get something built, that supports that.

To see if that'll even... At least for me, that would be something I'd like the PDE or whoever, I'd like them to look at because, again, that was our original recommendation. We didn't really get any traction with the Pioneer program. They've already done the heavy lifting by taking the parking out Let's strip the inclusionary zoning requirements and stick with the eight year MFT and see if anything bites. I'd like to at least see that myself. Commissioner Adair.

Well, to those ends, I would point out that, yeah, 5% savings isn't huge, but if you see that we need to get down 20% or 30%, well, that gets us a quarter of the way there or a sixth of the way there when coupled with other things. So, yeah, I think... I'm looking at the eight-year with no affordability would be great. The eight-year with the, I believe it was 5% of affordability, just so we can compare numbers for feasibilities. And then the 12-year with the 20% at eight would be, just to see those numbers and see what, but I overall agree with Jason, I think, let's put some kind of cap limit on it, but at the same time offer that and see if anybody bites and if it makes it feasible. Because we are in a really depressed economic environment, so sometimes you need to just give someone a carrot to jump.

Give them a little goose. And again, to your point, that's just the MFT that Matt was showing us, but again, the PDE has already recommended also parking, which is another big factor. And then to Kristen's point earlier, some of the design standards we've taken, you know, relaxed, I guess is a better word than stripped, because we still want our designs, certain aspects. So I think, at least for me, that's a good point as far as the affordable housing part. Let's see what happens.

And just as a reminder, also part of the Pioneer program is that there is no development bonus program. So they can go all the way to the max. I mean, I'm just thinking. throw that in there, and they could go all the way to the max without having to jump through those additional hoops to get, yeah. So, just.

Yeah, no, I appreciate that, because again, like you said, if we're going to do this pioneer program, let's see what all the incentives, everything happens together and see if there's any movement. And to Commissioner Adair's point, you know, it is a tough building environment right now, especially in our state. And that's everything. That's commercial, that's residential, that's everything.

Commissioner Ohliner. I'm gonna play a little devil's advocate here. We have an affordability problem in our city and the region. And I feel like this discussion is kind of kicking the can down the road a little bit It's a it's a complicated difficult problem and I don't know that this Commission can solve that problem through all of these tweaks, but I don't want to lose sight of that as an overarching goal of what we're trying to do in terms of building housing as if we're building housing at market rates and School teachers, firemen, they can't afford to live here in the city that they work in. I don't have an answer, but I don't want to lose sight of that as an issue.

Yeah, the only thing I would counterpoint is, again, this is capped at two projects. I understand. Yeah, so that was the pioneer program. Again, the city has always had that problem. It's not a new problem. And again, I agree, it's not something we want to lose sight of at all. Any other comments as far as the first piece, the affordable housing requirement?

Or if Kristen wants to... Back to the Pioneer Program and another piece of it is that, to your point, for the Pioneer Program, there are a certain number of units that are required for that program. So if somebody comes in and says, say, a 75-unit project, they would still be required to do affordable housing right now.

Right, but my recommendation is strip that requirement.

Oh, you want to strip that number of total units as well and just give it, okay.

That's my recommendation. But again, there's one. And I don't want to forget also. That's what they did last time and then they bumped and all of a sudden it didn't go anywhere. That's what I'm saying. I'm trying to see if we can spur it. Again, they've already put in the good ingredient, which was the parking. So let's see what happens. Again, there's only two projects. That's my thinking. And you're right. You're not going to solve the affordability problems we hear in two projects regardless. Anybody else would like to add? Vice Chair Patterson.

I'm once again trying to string together a one thought with like 500 things going on in my mind. I do think that as I've collected from our development community that's spoken in various public comments as well as our consultant that shared tonight is the Pioneer Program has at least kind of moved things in the right direction. It just hasn't fully taken off. And so I do agree with this approach of modifying that to be more appealing and hopefully do get the two projects over the line that we were aiming for. So I'm in favor of looking at removing the affordable housing requirement for the Pioneer project in particular. I think to Commissioner Wollner's point, though, I would like to see the city come up with something in parallel to address the affordable housing in another way. I mean, I think at this point, I feel like it's that scene in the office where we're all staying and pointing our finger guns at each other because Someone's gotta make a move, and I think the Pioneer Project will hopefully help that part of it, but then it just leaves us with the affordable housing piece that's still out there with no real solution still. I understand that the below, I think, 50% requires probably some additional funding and whatnot, but now we're in a gap between that 60 to 80% that those firefighters, teachers, community members are missing. in parallel to addressing the pioneer projects, I do think we need to look at a more thorough affordability project for what we're losing by taking that out of it. But I do think it makes sense to separate the two because again, nothing's shaken loose yet. So we gotta make something happen.

I took my finger gun out first. So again, yeah. I think also the other thing too is looking through the presentation, you know, those lower 60% and below, I mean, they really do, I mean, depending on the percentage of the units, they do sink the feasibility. And if you want to go to 80%, that's more feasible, but you are getting closer to market rate. It's really just, again, and that's why I think it's so helpful to have Arch and Kristen and these guys continue to explain it to us, but that also seems to be a big drag. You know, these lower units, and I forget the housing targets. These 30% lower AMIs, I mean, I don't know how those get built. Obviously with state help, grants, funds, things like that.

So I've heard from about three that seem to be in favor of adjusting the Pioneer Program, but I'd love to see if there's a consensus and if we're moving this forward.

Okay. All in favor of moving the Pioneer Program, it's currently at eight-year MFTE is what our pioneer program's at, without any affordability requirements, please raise your hand.

Okay, there is consensus, thank you.

Yeah, of course, Vice Chair Patterson.

I also want to put on the, like, I live here hat for a moment and just explain to some of our developers and staff and everything about, like, I think why we're so apprehensive to going full tilt boogie on like, we want, you know, a year at MFT across everything. Like, I think that obviously there's a lot of consideration into like what the long-term impacts are, what the downstream impacts are of like, you know, you heard about it a little bit tonight of, you know, what about the schools? And those are all, I think, legitimate concerns is if you live here, you don't want to sacrifice those things to have development occur. And so I think... the reason why we would look at the Pioneer project first is because we want to see what happens. I think, speaking from a community member standpoint, we want to see what happens. We want the development to happen, but we don't want to sacrifice too much of what makes Issaquah great to make it happen. And so we're trying to be protective of why we live here and what we live here for, while also understanding we need to grow and change and do all these things. So just in defense of the Pioneer project and making it more of a pilot program versus going full in on modifying everything, I think speaking from my heart like that, that's, that's where I'm coming from on it. Um, and I hope it works out great and I hope that we can adopt it as a full time amendment. But I think, uh, from my perspective, that's why I think we're a little hesitant to just keep it within the sort of pioneer project.

Yeah, hesitancy is good. So again, there's nothing wrong with hesitancy. That's kind of the reason I like the Pioneer project. It's not something we're going to write into code. It's just a recommendation to council. We already have this thing set up. Let's see what two projects can do. But having said that, I want to give everyone else an opportunity that rose their hand or did not raise their hand if they want to speak on that. OK. Well, did you get what you wanted?

Almost. So it looks like we just covered the first two topics here, affordable housing and MFT.

Yeah, right. Well, I thought we just did the first one. I thought we were going to actually now talk about NFTE incentives.

We can. Yes. Commissioner Patterson kind of.

It was a segue.

My understanding from that was that you are not ready to move. You just want to keep MFT right now with the pioneer project and not move forward citywide.

Yeah, yeah. So like I said, nice segue. We're now moving into MFTE incentive. Again, you can see the different options laid out before you. We can maintain the eight-year MFTE in return for affordable housing. I think as far as currently only project-based MFTE incentives, only eight-year MFTE. Yeah. Anyone would like to go first?

Please, Vice Chair Patterson. More of a question on this, but I think one thing that would be helpful, especially considering beyond the Pioneer Program, would be to understand some of the impacts of MFT. If there's any data available or anything that we could understand to say, what are we potentially sacrificing? That's an intense word. But what are we missing out on by doing that from a city perspective? And just a little bit more on that would be helpful.

I do have a copy of the report that was done by Heartland and we can pull information from that and other information that we have and, and provide that.

Matt, I have a question for you. That 12 year MFT program that required 20% affordable, that was at the 80% AMI, correct?

You can do any affordability you want, but, but 80 is, it would be the highest, the limit.

Okay. Maybe we do something, you know, Consider a 12-year because that seems to get the most bang for your buck, but maybe drop that. Not the affordability. Everyone's like, no, you're not. No, drop the AMI. So maybe instead of 80, we try to get down to a 65 or a 70 because that one gets them. The 12-year MFTE, that seemed to move the needle the most. And then again, you got the parking that helps move that needle. But maybe there we can squeeze and get a little bit more of our AMI down. This is the dials, John. This is the fun stuff, right? This is where we're trying to do this and this. Absolutely.

I think one-time incentives is an easier thing. When you give away tax revenue for us and other jurisdictions, it needs a lot of thought. So I would not want to do anything like that unless until we get a deeper dive and really understand that. Because if it gets shifted, OK, I get that, some of it. But still, there's going to be a hole, because there's also going to be more kids. So the costs, there's going to be more demands. So understanding that, because other people have been doing this for a while. So let's look at the data. So until we do that, I'd be reluctant to go any longer or any deeper than what we currently

And again, that's great, and I don't disagree with you at all. I was thinking in my head, kind of Kristen's comment about this can be something with a set time limit for two years to see what type of action we get. So again, I don't know how that would work with code or how we'd write that as an amendment, but I was thinking more of something that actually did have a time constraint.

It would be amending the Pioneer Program as it's codified.

So this would be the Pioneer Program again?

Right, version two.

Can we just leave the Pioneer program alone? The eight year MFTE, the no parking, just in the urban core, and then see what happens with the 12 year MFTE.

Citywide?

No, in the urban core, but again, the Pioneer program was just for two buildings. They actually weren't even a time, I don't even think there was a time, it was just the first two developments.

So Pioneer. MFTE eight year, no affordable, but urban core after those two projects, MFTE 12 years at 20% at like 65%.

Okay.

But okay.

I'm just, like I said, well, we definitely will. I'm just like, I'm just trying, like I said, I, that one seemed to have the biggest impact to me and it, I mean, we don't have to do anything. Right. But like I said, you're in the urban core where the PDE has already recommended getting rid of parking. So that's a big hurdle. The urban core is where we want to build. It's the only place in the city we don't build, ironically enough.

So the no parking requirements hasn't been approved yet.

Right. I'm just saying PDE recommended it. So it hasn't gone to the whole council. But I'm just, like I said, if this is what we're trying to do as per development in the UC. Sorry, Commissioner Day.

Yeah. So I guess my overall takeaway right now is I'm kind of with crass in that I would love to read this Heart Lake memo and kind of digest it and dive into the numbers with my numbers person. sort of look at that. But I also, my takeaway right now is I'm definitely open to doing MFTEs of different time spans, but I would like to cap either the number of projects or the time they are available to apply for. So we're not digging ourselves deep in a hole. And then now suddenly we have five projects that don't have property tax and we're in a budget crunch. So that's where I am. I'm open, but I also would like to see numbers, and I want us to put a practical limit on it so we don't end up in a budgetary crisis.

Yeah, no, and I think that's even something I brought up last time is, again, you're going to be those resources as the city, as the population increases, we have shortages, whether it's the IPD, other things. So, again, it's something to think about for sure. That's why I like time constraints. Is that Commissioner Matthews?

I was going to suggest something similar, but is it possible to, we just voted on the Pioneer Program, but just have two options in the Pioneer Program. You could get an eight-year MFTE if you have no affordability, or you could do a 12-year MFTE if you have 60% affordability or whatever. You know, just have two different options and see which one bites. That's a great suggestion. I would be fine with that.

So eight years without any affordability requirements in the UC for the two first developed buildings. They come through the pipe, that one's not time limited, it's just the first two. No affordability requirements, eight year MFTE or they can opt for the 12 year MFTE program that does require 20% affordability and then we can set that at what? 80% is pretty close to market rate as Matt mentioned. this might be a time where you might be able to get a little bit more or less AMI. I mean, I don't want to go down to 30. I think closer to like 65. 65 or 70. Yeah. But I think that's a great point, Commissioner Matthews. So I mean, again, they've got a menu, a small menu, but a menu.

OK.

All right.

All right. Moving on to the last one. Sorry.

Okay. As far as you can make me say it again. Yeah. So as far as giving them an option for a 12-year MFTE for, again, the Pioneer Program with those first two developments, eight years without affordability requirements, no inclusionary zoning. or they can choose from a 12 year MFTE program, which state requires 20% affordability, and we'll set that affordability at 65%.

You got it online too. So I just moved that up to the previous discussion, but it sounds like MFTE citywide, nobody's quite ready to do yet.

Sounds like we want more data.

Okay, more data. All right, got it.

And can I just point out that that doesn't necessarily benefit us either because if we're trying to hit these RGI targets, then we need them in the specific areas. So I would suggest we incentivize building in those areas that we need.

All right. Um, the last one that we have are just any other incentives to improve feasibility. I'm going to bring this one up for something that we've talked about with developers and Matt and I have talked about it is the development bonus program. So right now developers need to be able to just get all the density they can get and with or without in the mixed use residential zone, you know, outside of this pioneer program, if you just allow developers to go to the max, we still require, we still have an inclusionary zoning program right now, and we still require inclusionary zoning. So either way, if you let them go to the maximum or not, you get affordable housing. So is that most cities that I have looked at still have development bonus programs? Some do not. Woodinville keeps coming up as one that does not and still has development that people like. Any thoughts on that or any other things? I mean, do you want the city to consider looking at, you know, doing other sort of capital projects that would help bring development here?

What would that look like?

Well, I mean, I would say do what Mercer Island did, but they got a huge federal grant to be able to rebuild all their roads for downtown. I don't know, a park, you know. Matt may have some other ideas.

I'm happy to chime in. I mean, you know, any public investment can go a long way. I would argue that the city, it's about infrastructure. It's about making sure that you have the road capacity, that the water sewer infrastructure is adequate. So instead of a developer coming to Issaquah and saying, I want to build a 200 unit project right there. Oh, but I've got to upgrade a mile long stretch of sewer that's, you know, super outdated. That adds time, costs, all of that. So You know, just making sure that the sort of backbone infrastructure, the parks, the water, the sewer, the electrical, sort of that development community can come immediately tap into existing updated infrastructure is probably the best thing you can do to be development ready.

Begs the question, how is our infrastructure in the urban core? In our regional growth center?

I need to look. I'm not sure, frankly.

We need that to be attractive.

I can speak to this a little bit from what I've picked up from listening at dinner. So right now we are... I would say making do with what we have budget wise. We are not in a budget crisis. We are doing pretty well, but our reserves are low. They were depleted by COVID. And so The city is going to have and is looking at how to make investments in getting that infrastructure back up to where it should be to have a nice, safe, comfortable infrastructure. Does that make sense? In terms of streets, water issues, etc. there is a big expense coming down the pipeline with regards to water that we have to be very aware of. And that is why I think we should also be cautious with regards to how much tax money we do let slip through our fingers. And obviously, there's always a balancing act. But I'd say we're okay. But, you know,

I think it was our storm system plan that was like 20 years.

Yeah, we just updated our storm system plan.

I know we did, but I want to say the last time I saw that header, it was like 2003.

They know what to plan for. It was. It was 2003, and they know what to plan for. And they're not looking at now. They're looking at 20 years from now, just like we do with the comprehensive plan. The beauty of having a regional growth center is that when you apply for your grants, you can apply for infrastructure grants. And when you are a regional growth center, you get moved up a little bit on that list. So that's a possibility. But I'm going to say me talking about this is kind of far-reaching and out there because what we really need is a public works person to tell us more about what that entails and where we stand as far as our infrastructure goes.

Keith was our last one?

Planning director?

No, public works.

Niven? Yeah. He was planning.

Any thoughts as far as the density bonus program? If I understand it correctly, it's quite a lot of hoops for people to jump through in order to get it. What if we just took that away and let them build to the max and they still have the affordability requirements? Any thoughts on that?

So wait, what hoops would we, if they still have to meet affordability requirements, what hoops would we be removing?

So what are the things that trigger them to allow them to build the max, the max bar?

So we have a base height and a base floor area ratio. And if they want to go, if developers want to go above the base in either of those, they can. But a percentage of a percentage... that increased square footage is required to be on-site affordable housing and then and that's a third of it the other two-thirds can either be through fee-in-lieu open space or on-site affordable housing no one has selected the open space option yet we do have fee-in-lieu funds about two million dollars and we've received 14 affordable units

calculations are difficult they need the density and either way you get affordable okay I do want to make a pause because we have Commissioner Zakharoff who's been waiting to in raising her hand so please Commissioner Zakharoff

Thank you so much. So I hope you can hear me well. Well, to me, the development bonus program is actually the program that should kind of allow developers to build more if they want to. But at the very same time, we want them to build more. So it's kind of like at this point, it's a little bit doesn't make sense. It's not like it doesn't make sense, but we want them to build more. We need more produced house units. So I would be in favor of eliminating development bonus program. Just completely.

Thank you, Commissioner Zakharov.

Vice Chair Patterson.

Thank you.

Clarifying question for you, Kristen. Is that a citywide program or just an urban core or central Issaquah?

Central Issaquah. Okay.

In that case, I'm a little bit more in favor of it.

Yeah, I mean, I think to Commissioner Crass's point earlier, we just have so many different goals and we have to really get down to what are the priorities. I mean, again, we've got goals as open spaces, we've got goals as affordability, I mean, goals to develop housing. So at some point, these goals are coming into conflict with one another. And if the goal is to develop, okay. Let's do what we can in order to spur that forward. If the goal is solely affordability, that's fine. All of this is going to have to be arranged more towards affordability. But again, you can see the data that's coming in. That's a tall hill to climb. Commissioner Crafts, your name was said.

Yes.

So this is going to step back a couple points here. and it's a question for Kristen or Matt. Do we have data and then trends of our rental vacancy rate by price point right now in the city and or unit type? Because I'm trying to understand to solve affordable units, it may, and we've talked about this before, it may need to be done in a different way, not with these big $125 million buildings, but using old stock conversion of other things that are infill lots, et cetera. But understanding more about our current vacancy rate is, I would love to know more about that and where the trend is, because that's just kind of a starting off point. And it may show, some insights of where there's holes and we may have, if we show that we have vacancy rate at under, you know, a $1,200 units apartments, then I'm like, okay, well, let's talk about what that means. So if the data exists, I would love to have that shared. I don't expect it right now, but I'm like, something to bring to the conversation.

I don't know. I'm looking to both. Matt can't see it, but I'm looking at him and I'm looking at Andrew. I don't know.

It's not something we have at our disposal, to your point, Commissioner. You know, there's potentially a way to look at property by property level information. The moment you get that fine grain, I worry a little bit about the data quality, but we can take a look at, there's publicly and privately accessible data that we have access to at the sort of the property level that we could happily do a little data extraction and just see what the overall vacancy rate is and if there are units that are struggling. One thing we are seeing across East King County is sometimes, and this is also true in Seattle, I should note that there are some affordable units that are listed at 80% AMI that are at or above market, and those are actually ending up facing some real vacancy challenges. So Seattle is grappling with that as we speak. So yeah, all that said, I don't have the information at my disposal, but we could do a little data analysis and provide it to Kristen.

Because I assumed that we would have it because we established goals. So if you need more units, you have to then understand where the holes are. The other thing is, there's a lot of townhouses being built, from what I can see, not selling. So those could turn into a, I'm curious if the city believes that these are going to turn from for sale to rental units, just like when Bellevue, in the Bellevue, they built the Braver, which originally was supposed to be condos, and they turned it into apartments. So I'm not sure if there's different ways of solving this, where if there's programs, or at least where developers are, gonna just convert what was gonna be sold to now being rental units, which then have maybe an opening for a different lower income base than what was originally planned.

Yeah, and I don't know, and a lot of those townhomes are so, it's too early to tell.

I don't even think there's a price on the ones on Front Street yet. I don't think so. I think the ones for Newport have a I tried to look it up like last week, and it still hadn't had anything.

Okay. So do we have a consensus?

Yeah, Commissioner Matthews.

Sorry, I was going to go back to Commissioner Zakharov's comment about the development bonus program, and I also think that that might be something that's duplicated that we may get rid of, and maybe the city picks up. some of the open space requirements because I know that the parks department has goals for having X amount of parks. So maybe that's a trade that we do get rid of the development bonus program and then the city helps locate and build parks that might be more expensive. I'm not really sure what it costs to develop a site into a park, but it might be something to consider.

That's a good suggestion. I mean, when we consider everything. And I do want to make sure, Commissioner Zachroff, is that your hand again? No?

Okay.

I guess my one apprehension on eliminating the development bonus program goes to my earlier point of knowing what the city's plan would be for affordable housing. It seems like if we're to get rid of the affordability requirements in lieu of the MFTE and not having affordability requirements, it's one of the few levers we have left that I'm aware of right now that that would exist. but maybe it sounds like that might not be the right vehicle, so maybe there's an alternative.

And it sounds like removing the affordability requirement, as you've talked about it tonight, is just for the Pioneer program for right now, and then so for everything else that gets developed outside of those two projects, we still have inclusionary zoning that would be required.

So make sure that I get this right too, Kristen. So even if we got rid of the development bonus program, those developments would still have an affordability piece?

Correct.

Okay.

We wouldn't be we can't get a bread what you know the state the you know PSRC there There they say in the state says you have to provide for you know accommodate and provide for affordable housing and These are your targets and if we take anything away like that That's sort of going in the opposite direction of what our recertification would get us so we still need to do that, we also need to meet a certain number of housing in it. So yes, there are two different things we're trying to accomplish out there is development plus affordability. But yeah, we wouldn't just take that away.

As far as the planning department, would you say the, I won't ask for numbers, just give me a one to five, like a pain level, right? Like the doctor asked, on a pain level of one to five, five being the highest, how much is the burden to go through the density bonus program? 3.5 okay so it's relative it's actually painful i mean yeah that's pretty painful i would say so in order they still have the affordability requirements we're just letting them get the density that they want in order to get the the units and get the project to come down a little i have that right very very crude i know but that's kind of the idea yes okay i guess the question for me is there any way to do that in a in central Issaquah or with a, I mean, we would have to make an amendment to the code.

Yes.

Right. And I know everyone's scared of that, even though all codes can be re-amended, but I know that freaks people out. Yeah, I guess I want more information. The go-to response, right? More information. But I could very easily be convinced to get rid of the density bonus program and see what happens. Do we see these again? Are we going to see this again?

You will. On September 1st, we take this feedback and developer feedback to PDE. And then they'll give us a little guidance. And then once we start doing code amendments, recommended code amendments, we come back again. And we will have more data then.

My finger gun is smoking. Anybody else?

Oh, Commissioner Zakharoff.

Oh, that is Anne. Commissioner Zakharoff.

Thank you so much. So should we be also thinking about increasing the floor area ratio from 2 to maybe 2.53? Should we talk about that?

So the initial request is to just look at the mixed-use residential zone and increase the floor area ratio there. And what we think we're going to recommend is that the FAR go from 2.0 to 4.0. But then that also means that we need to change the mixed-use Central Issaquah because the max FAR in mixed-use Central Issaquah is 3.5. And you are supposed to be less dense. So we're going to look at those two and come back with numbers.

When do you plan on bringing this back?

Thank you.

Thank you, Commissioner Zucrow.

I think October, because we want to get this through council hopefully by the end of the year. And we have architectural standards to look at at the same time.

Further comment? Questions? You get what you needed?

Yes.

OK.

Thank you.

All right. That's going to do it for regular business this evening.

Thank you, Matt.

Yes, and yes, thank you very much, Matt, and appreciate your presentation. That was great. I want to say thanks, Carl, also for his remarks and staff who always do a fantastic job. We're going to move on to reports, and we'll start with City Council updates. If there are any.

all that to say, I have no updates since last week.

That was funny. Okay. Any community updates? Issaquah updates, city of Issaquah updates?

No, no city of Issaquah updates. Oh no, sort of. We did just hire a, you may remember Thomas Rush, who was our senior transportation planner who left us and went on to Kirkland. Um, I know that Kirkland, But we did recently hire a transportation strategic analyst, I think is her title, Amanda. And you'll probably see her at some point because we are going to be working closely with her on station area planning. So just heads up.

Yeah, that's great. So do we officially have a rivalry with Kirkland?

We have for a very long time. We took a bunch of theirs. Now they've turned it around and taken a bunch of ours.

Yeah, like I said, Team Isoquel all the way. Okay, any other business or announcements? Anything for the good of the order? Commissioners? Commissioner Adair?

hi yeah so as you may have heard uh last week pde took our recommendations on transparency and decided to go in a different direction right they dramatically lowered it to 15 from 45 percent um and that goes for not just multi-family residential but also along natural context areas So as I believe a lot of us reiterated during our meetings that 15% is considered too low, especially in long natural context areas. I was going to ask if we'd like to put together a letter to city council who's meeting on September 22nd that would just basically fully explain the planning policy commission's reasoning and logic behind our original 45% recommendations beyond, you know, to support those and urging them to choose a transparency level that's at least higher than 15%. Because if you think about it, 15%, if somebody applied for a variance, that could go down to 5% even. So I'd be happy to draft up the letter. I've already been working on it, and I could bring it to the next meeting for us all to go over and vote on, if that's something that other members are interested in.

I don't have a problem with that. Is there any legal reasons why that would be weird? No. Okay. And then the only question I would have for Kristen and staff is, in our recommendation, did we Did we make clear why we chose those numbers? Was that not clear to the PDE?

I haven't written it yet, but it will be in there.

Okay. Well, they went from 45 to 40 for commercial, so they basically stayed in line with commercial. went a very different way.

Well, actually, yeah. Oh, sorry, just to correct you. We had 70% in central urban, and they went down to 40%. So we had 45 across Issaquah, but with 70% in the urban core. And they went down to 40 everywhere.

The question is, like, do they not have our input, or they just did it from scratch? Or I'm curious of the process of how that worked.

We took, in that staff report, yes. We took your recommendations and talked about it and that they chose to go.

I'd love to hear their rationale. Okay. Will they give that back to us so we can learn from that? Is that a part of this process?

I can go back and watch the meeting again.

Okay.

We've had a few since then.

All right. Thank you. Okay. Yeah, I don't think there's a real problem having Commissioner Adair draft a letter that would just buttress the staff report. I mean, do you see a problem with that, Kristen?

No, it's been done before.

Okay. I'm fine with that. Obviously, you know, the commissioners, so how would that work as far as the commissioners would get it through an email, we all sign, or would this wait until another meeting?

It probably, if Commissioner Adair wants to draft a letter, we can include that in the packet, I think, as a draft, and then we can put it on as an item, and you all can discuss it at the next meeting on the 10th.

Perfect. Let's do that. Okay. Thank you, Commissioner Adair. Any other... Any other items before we close out? All right, well, thank you, everybody. Again, thank you to Matt and thank you to Carl and everyone else. We will adjourn this meeting of the Planning Policy Commission at 8.29 p.m. Have a good night.