Planning Commission - Regular Meeting

Good evening, everyone. We're gonna call the January 22 Planning Policy Commission meeting to order, and it currently is right on the dot, 06:30PM. Today's meeting is a hybrid meeting. The Planning Policy Commission is in person, but staff or members of the public may be attending virtually or in person. Kristen, do we have a quorum this evening?

We do, and Commissioners Zakaroff and Patterson are excused.

Okay. We might see, and I do see Commissioner Millinder Erwin. Perfect timing. Okay. Give her a second to get settled, and then we'll look at the minutes.

Alright. So our first item of business this evening is to take action to approve the minutes for the 01/08/2026 PPC meeting. Commissioners, any corrections to the draft minutes that were provided in your agenda packet? Hearing none, seeing none, those minutes are approved. We're gonna move on right now to public comment.

And tonight, we're actually holding a public hearing. So we're gonna have two opportunities to speak. Right now, we just ask for those who would wish to speak, speak in general terms, speak for the good of the order. But if you actually are here to speak on the adoption of this year's amendments, you'll want to wait till we get to the public hearing. Has anyone signed up to speak this evening?

I do have two people that have signed up. I'm not sure if they are for the general public comments or the public comments.

Sure. I guess I'm looking and do we have any virtual speakers?

We do not.

Okay. So to those of you in the audience, are you here to speak generally or for the public hearing? I'm not sure who signed up. Oh, fair enough. That check-in sheet gets everybody. Okay, so no general comments? Specific ones for the public hearing? Perfect. Okay. All right.

Then we're going to skip over the public comment guidelines for the moment so we can move on. And we are gonna begin that public hearing. This is our first item of regular business. And we are holding a hearing regarding the docket of proposed comprehensive plan amendments. The purpose of this public hearing is to provide a formal opportunity for the public to comment on that docket.

We'll open the public hearing, which will be followed by a presentation from staff, and then the PPC will have an opportunity to ask follow-up questions. After that, we'll take public testimony, close the public hearing, and then the Planning Policy Commission will deliberate and make a recommendation on this item. Kate Kaney, our principal planner, will be presenting tonight. So Kate, when you are ready, please go ahead.

Okay, apologies for the delay. Everything's set up here. Okay, thank you and good evening. My name is Kate Kaney and I am here to provide an overview of the proposed 2026 docket of comprehensive plan amendments. I will also discuss a little bit about the amendment process.

So we are here not only to have the public hearing on the 2026 docket of proposals, but also to provide an opportunity for the commission to deliberate and, provide their recommendation on proposals to forward to counsel. Tonight is not, for the commissioners. It's not about approving items on the docket. It's about forwarding a recommendation for counsel to establish the proposals on the final docket, will receive further analysis and consideration through an amendment process throughout this year. So in terms of a little background, both the state and the city have requirements for amending the comprehensive plan.

The state requires cities to establish a process so that the comprehensive plan can be open to the public and that changes can be made. Those changes are limited to one time a year, amendments just once a year. The amendment process is sometimes called a docket process. Docket meaning list, reviewing the list of proposals. The city, in the city's code, also establishes procedures and criteria for amending the comprehensive plan.

The criteria is established for private the evaluation of privately initiated amendments. And as discussed with the commissioners at their last meeting, there were no proposals received from private individuals or groups this year, so all of the proposed amendments are initiated by the city. The code also establishes procedures for how the docket will be reviewed at this preliminary phase, how council will establish a final docket, and it moves through the amendment process after that. So tonight, I will give an overview of the five city initiated proposals. I will go through in the

next slides each proposal one by one, starting with this first amendment. This proposal has two goals, really, and they both have to do with the land use designations that are in the comprehensive plan. So what is a

land use designation? You can see on the screen the brightly colored squares. Those are from the legend of that comprehensive plan map that you see to the right. The land use designations, and there are nine in Issaquah, identify the type of development and land use that's allowed in certain areas, and the comprehensive plan map that you see illustrates where those land use designations allow those certain uses. So the goals of this proposal are to add descriptions, full descriptions of the land use designations, and also to add information that identifies the land use designations and how they are implemented by specific zones from the zoning map and from the land use code.

This is that second part of the amendment that lists those nine land use designations and their comparable zones. And the reason that this is important is to make sure that there's consistency between the type of land uses allowed through land use designations in the comprehensive plan and the types of zones and zoning that are in the zoning code. State law requires that development regulations implement the comprehensive plan, so this helps us increase consistency between those two things. Okay. Now the second amendment also has to do with land use designations and zones.

This proposal actually was on the docket in 2025 last year, but there were not enough staff resources to fully address and implement this amendment. So the goal here is to clarify the names of the low density and multifamily land use and zoning designations to ensure compliance with the state's middle housing requirements and also to clarify their role and their capabilities. What you can see in the table to the right is low density residential is one of the designations. That designation also allows middle housing uses, but you don't see low to moderate or that kind of name change. So staff will be evaluating name changes for both the language designations and the zones to clarify the capabilities of both designations.

Okay. So proposal number three. This proposal would update the goals and the plan actually, it would update the policies for Issaquah's regional growth center. So just to give folks an idea of where the growth center is, if you look at the map to the right, you can see the you can see Issaquah with the black boundary. And in that central area in the purple, that is the boundary identified in the Central Issaquah plan for the Central Issaquah neighborhood.

Within that neighborhood, that green shaded area is the city's designated regional growth center, and that growth center was designated by the Puget Sound Regional Council in 2015. That designation is part of a larger system of regional growth centers across the region, and with it are some requirements from Puget Sound Regional Council that have been changed the last few years. And what this proposal is going to do is to address some of the changes in new plan or policy framework for the Regional Growth Center from Puget Sound Regional Council. This is kind of a limited update of things. It's really to align the information on our regional growth center with the population, job, and housing targets from the 2024 major update of Issaquah's comprehensive plan and address any other issues that arise from our evaluation of the new Puget Sound Regional Council goals for regional growth centers.

Okay. So the fourth proposal is an update related to the 2024 park system plan update. That update changed some of the names for things like the name of this plan, the park system plan. It changed the name of the green necklace concept for open space and trails that was in just that Isequest Central plan. Now the Creeks to Peaks concept is a citywide concept, and so there will be some kind of administrative work to change the name to make sure the nomenclature works across plans.

There's also an issue that is being looked at by park staff regarding level of service for parks facilities. Currently, it's a very quantitative approach, and the parks department is moving into a more qualitative approach. So we will be doing some learning and analyzing that as we work with park staff on those amendments. Okay. The last proposal, amendment number five, is really a placeholder for potential amendments that may arise from the work on the Issaquah Climate Action Plan update that is taking place this year.

So we are working closely with the city's sustainability manager potential amendments is available in case anything arises from that plan update that might lead to a policy change in the comprehensive plan. So that was an overview of the five proposals in the 2026 docket. Now I'm just going to talk through some process for this docket itself. Tonight's public hearing, also the recommendation from the commissioners is what will be happening tonight. February 3 is scheduled for the council committee, the Planning, Development, and Environment Committee's review and recommendation.

And then on February 23, the proposals and recommendations will go to the full council for action. And what council will be doing is acting on a resolution to establish the final docket of proposals that will then be taken through an amendment process. And this slide outlines what that amendment process looks like. So after the final docket has been established, staff will go back and analyze different things as necessary and draft the full amendments, related to each of those five proposals that I just went through. It will, start, immediately after we hear from council and go through, this summer, August, September, probably.

I am new here, so I imagine that's when the process will come to a head with full drafts from, staff, and then we will come back to the public and to the commission on this review process. Also, a public hearing will be held. There will be another planning development environment committee review and then city council adoption by the 2026. This is very important because, again, cities can only amend their comprehensive plans once a year. So some slides that we shared with the commission in advance of their deliberation at the last meeting are included in this deck.

Considerations before you make your recommendation, are the amendments proposed, are there any that are not relevant or necessary? Should refinements be made to the end of any of the amendments presented. Recommendation from the commission can add, amend, or delete the proposals. So one last reminder, the goal today is not a recommendation on full amendments, but on the docket items that you want to forward for further consideration as part of the final docket that council will establish.

So

I believe, yes, that was it for my presentation.

All right, well thank you Kate. So right now again we're going to open this up for the commissioners for clarifying questions. We'll have an opportunity deliberate and debate the merits again. But right now, before the public, we want to just make sure we get all our questions out there so when they make their public presentation, if they choose to, they will have all the same information that we have. So again, right clarifying questions. Are there any? Commissioner Mulbaru?

Yes. Commissioner Voice, last time I looked at the zoning, the city zoning maps, I noticed that a table that is common in other urban areas, a table that talks about the various uses within each zone for the commercial properties. That was not a part of the Issaquah comprehensive plan. That was not part of the Issaquah's system for knowing what goes where. Maybe it was fixed.

I don't know. Maybe it is a part of the whatever this thing is we're looking at. But if it's not, it would seem that Issaquah should make sure that whatever it does, that there's a formula so you can figure out what uses could go away within what zones.

Issaquah does have one. It's in our land use code. That's where all cities put them as into their land use or zoning codes.

Okay. It was reintroduced then because it was I know it was missing for a period.

No. It's it's it's always been in the land use code.

Yes. The table?

Yes. Alright.

Thank you.

And it sorry.

Just to

clarify, what what may have been confusing is that there was a table in the comprehensive plan that had land use designations and the zones that implemented them. That's what we're replacing as part of that first proposal. So maybe that was confusing.

All right. Thank you, Commissioner Mulbaroo. Any other questions? Okay. Again, this is pretty technical stuff. The whole idea is to get this off the ground. So once it's approved, then it does come back to PBC, and we can deliberate on merits and things like that. All right. We're gonna open the public hearing, and it is currently 06:48PM. We're gonna ask staff, has anyone signed up to speak?

No. They haven't.

Okay. So no one online?

And there is no one online.

Okay. Now since we a few people in the audience this evening, would anyone like to speak? Okay. Seeing none, we're gonna close the public hearing at 06:48PM. So there is formal action that's requested on this agenda item. So before we can even begin to talk about it, discuss it, we will need a member of the commission to make a motion. Commissioner yeah. Commissioner Kraft, please.

I make a motion to approve the docket as presented today.

Is there a second?

I second.

Thank you, Commissioner Oliner. Okay. So the motion to recommend approval of the docket of proposed comprehensive planned amendments as presented. Now we can have some time for discussion if there is any. And we should probably start with the person who made the motion. Commissioner Kraft, if you'd like.

I think it's pretty straightforward. And we went through this in our last meeting, so I feel comfortable having the staff move forward with what they presented.

Great. Thank you, Commissioner Krafts. Would anyone else like to speak? All right. So to sum it up, again, this is basically just a process. This is part of it. Again, the idea is we're not actually deliberating about the merits of this. This is getting the permission for it to move forward for counsel to review it. Ultimately, if it does get okayed by counsel, then it does become staff work, which eventually does come back to the PPC. So again, this is just a formal process that is undertaken.

Alright. So because there is a motion on the floor, we'll just repeat it one more time. This motion is to approve the approval of the docket of proposed comprehensive plan amendments as presented. All in favor, please say aye.

Aye.

Aye. So that was unanimous. Great. Thank you, commissioners. We are gonna move along. And the next item of regular business is we're going to have a housing one zero one session. It's probably why everybody's here. This should be a lot of introduction to how the city looks at planning and things like this. So Kristen Leeson, our planning manager, and Mike Stenger, a senior planner with the regional coalition housing, will be presenting on this topic. Kristen, when you are ready, please go ahead.

Good evening. I'm Kristen Leeson, planning manager with the city of Issaquah. And, yes, it's a it's a housing one zero one. We anticipate this year that there will be several discussions and potentially many amendments regarding housing and bringing more housing development into the city. And so in order to have informed discussions when those come to you, we needed to make sure that you all understand what's behind it all and what's involved in housing in this area.

So first of all, topics tonight, we're going to talk about what is affordable housing? Who needs it? Why are we this involved in it? What is the state and regional planning context, and where do we fit in? And then the ARCH, a regional coalition for housing, and ISSQA, and our relationship and the roles that we play in housing.

Before we get started, most of this tonight is going to be focused on affordable housing, but we need to recognize that it's not just about affordable housing. Everybody needs housing that they can afford. So you run the continuum, the city, we have our planning department. We work on the policies and the regulations and the programs, and we work with Arch, who helps us do all of this, and to monitor and so forth, and we permit those developments that come in. We also have our human services element of this, and they work with homeless and underserved populations to help them find places to live, to help them find services that they need.

And then we also have our economic development group who monitors our investment program that we have that we call IHIP and other funding that we have to work with developers, to bring developers into the city to see what we can do to get housing. So that is all a part of what we like to call our housing continuum in the city. So what is affordable housing? And I'm

going

to let Mark take over for a while. So this is Mike Stenger. I will jump back in in a bit. Feel free to raise your hands and ask questions along the way because I will settle in. It's gonna be a long discussion, so feel free to ask questions along the way.

Hi, evening. Again, my name is Mike Steinger. I'm a longtime planner with a regional coalition for housing. Helped city staff and city council on a number of issues over the years. And I'm glad to be back with you and orienting you toward this work.

I will say upfront that this is a lot of information. I know you probably already feel the fire hose effect. And so I'll echo what Kristen said about feeling very comfortable to ask questions. Even if we don't get through everything tonight or you still have questions, we're happy to come back as often as you need to or help as much as we can. Usually when I give presentations of this nature, the most common, the first question out of people's mouths is, what do we mean by affordable housing?

And so I think there's really two ways that we commonly think of it. The more general definition to it, and the one that's standardized in state, local, and federal programs, is to think of what any given household can afford for a given home. So if you're spending more than 30% of your income on housing and expenses directly related to the home, then the government considers that to be too much. Then you would be housing cost burdened. And so we think a home is affordable to households who can spend less than 30% to live there.

But it's unaffordable if they have to spend more than that to live there. And so affordability really depends on the cost of the home that you're talking about and the income income of the household. But there's a second definition that, depending on the context, that you may you may hear used in a different way, which is that it's used to refer specifically to housing that is cost controlled, meaning there's a limit on the rent or the purchase price of the home. And it's reserved for people of certain income levels. And so there's a wide range of these things.

Some of them are, we're all familiar with public housing. But there are other types of subsidized housing. There's affordable housing that is privately owned but has formal agreements on it to keep it cost controlled. And we'll get into those later. So in some contexts, if I or Chris talk about the number of affordable housing units, we may be talking about the ones that are cost controlled with a formal agreement.

But in other contexts, if we're showing you data, for example, includes market rate prices, we may be talking about the cost of those homes relative to household income. So I hope I didn't make that more confusing. But this leads us into a term that you may have heard called AMI, or area median income. And so it's a standard for comparing the housing costs and household incomes, as I was mentioning. Median, of course, is where whatever you're counting, half of them are below that number and half or above.

So in this context, the median income is where half of the households earn less and half earn more. And that is a number that we use not only to measure the affordability of housing in the housing supply, it's also used in housing programs to set income limits to determine who's eligible for the housing and the maximum prices. That median number is determined by HUD every year. And they do it statistically using recent data. And we will take that number then and turn it into income and expense limits that are, for the current year, are shown here.

So the current area median income for a four person household in our area, that is King And Snohomish County, is $157,100. And then we scale it from 100% down to 80% or 50% or 30% or whatever level we're interested in. And then according to the size of the household. So there are factors to multiply to get these figures according to the number of people in the household. So a four person household, as I said, the median income would be $157,000 But if it was a one person household at 100% of median, then that income limit would be $110,000 Now, in a similar way, we take that $157,000 to set housing prices in our programs.

And the expense limits are based on that 30% maximum that you should spend towards housing. And if the home has two bedrooms and the maximum is a 100% a median, then the maximum monthly cost would be $35.35 a month. But if it was a studio, it would be $27.49. Or if that that studio was a maximum of 50% of median income, then it would be $13.75 Again, I don't expect you to get all this all at once or maybe you're way ahead of me. But feel free to ask questions or we can talk about it and clarify it.

That will help explain the next set of slides and information. As Kristen said, everyone needs housing that's affordable to them. But we find that the lower the income, the harder it is to find that affordable housing. When we're talking about percentages of the AMI, then that determines who would be eligible for different affordable housing programs. So we're interested from a planning perspective on who is served by those at those income levels.

And this data from the state employment security division tells us what are typical wages or earnings for jobs that are common in our communities. It often comes up in conversations of those that we want to make sure are able to find affordable housing. If we apply some of those standard income limits, such as 80% of AMI for one person or 50 for one person, so we're just talking about the income of one person here. Registered nurse, for example, typically makes more than 80% of median income. And so does a typical firefighter.

But a typical construction worker makes less than 80, but more than 50% of AMI. Same for a waitress or a waiter. Retail salespeople and home health health care personal aids in this survey make less than 50% of median income if they're a one person household. But more than 30% of median income. And minimum wage is set.

So if a person is making minimum wage and living alone, then their income is just above 30% AMI. Does that make sense? Now, this chart is meant to illustrate across subregion, our East King County, which Arch encompasses, and compare the affordability of housing units and the incomes of households. Down here, are about 8% of the County are affordable at that level. Similarly, between 3050% of median income, you're looking at about 6% of the households fit into that income group.

But only about 4% of the housing units are affordable. Between fifty and eighty AMI, those numbers are pretty similar. But when you get above 80% of median, what we start to think of as moderate or higher income, then you've got more housing units that are affordable at higher income levels and fewer households. So what ends up happening, as you can imagine, is that there's more households with lower incomes, they're gonna have to buy up. In other words, they're paying more.

They're living in more expensive housing. And the result of that is that if you look at the households grouped by income level, you can find how many are paying more than 30%, or in some cases, than 50% of their incomes housing. Again, this is across East King County. And in that lowest income group, below 30% AMI, 77% are paying more than half of their income for their housing. Another nine percent are paying more than 30%.

So that's a total of 86% are housing cost burden. If you're paying more than 50% of your income on housing, that's known as severe housing cost burden. And that's a level which can be really unsustainable. Those are people who are in danger of losing their housing. The higher up you go on the income scale, the better that picture looks, not surprisingly.

But even at 50% of median or 80% of median, we still have high percentages of households who are cost cost burden falls frequently on single parents with children, senior renters. And we could also look at people of color and so on. The typical rent was less than $1,700 ten years ago. And it's increased more than $1,000 since then. And if you're interested in Isquah, which of course you are, you'll see that the data are very similar to East King County overall.

And so we then start thinking about what kind of housing can address the needs of people at various incomes, and particularly what kinds of affordable housing. That is, the ones that have the cost controls and income limits. At the lowest income levels, zero to 30 especially, and 30 to 50 typically require some sort of subsidy, public subsidy. That's where you'll also find housing for people with special needs, as it's often called, permanent supportive housing that provides services, emergency transitional housing, other subsidized rental housing. We won't go into what tax credit housing is, but that's a federal tax incentive program.

Anything up to 50% of median, most affordable housing is created through some sort of subsidy program. Now, you can achieve 50% AMI with land use incentives and local tax incentives. And we'll talk about that. But it's not as common. When you get into the 50 to 80% range, then that's where land use and tax incentives at the local level, the city of Isquah could control, come into play.

And then from 80% to 120 of median, We also see some land use programs helpful for that. And Kristen will be able to show you where that's been done in Hisquam. So if we stack all these things on top, then you might think that, for instance, if you wanted to provide more housing for people in that 50 to 80 group, such as waiters, wait retail sales, construction workers, and so forth. Land use and tax incentive programs can help with that. At lower incomes, we can do some things with land use and tax incentives, but it will typically take some public money to help create that.

Now, backing up to a bigger picture. As to what the city can do, what the city is authorized to do, why the city needs to do it, then we want to talk a little bit about this from the growth management planning framework that's established in the state of Washington. And so there's this foundation that starts with the Growth Management Act, which I'm sure you're familiar with already. Layered on top of that are multi county planning policies established at top the Central Puget Sound Regional Council are that guide, in turn, the counties, the four counties in the region, including King County, to set countywide planning policies, which are directive toward local comprehensive plans, which were just updated in the last year. And regulations as well.

So all of your comprehensive planning and land use regulations and so forth are all acting to help fulfill the guidance of the Growth Management Act, and particularly county wide planning policies. And countywide planning policies recently have taken a more prescriptive turn and specified in numerical terms the numbers of units that each city must plan for and accommodate in their comp plans and regulations. So I want to stress here because there's often a lot of confusion that the GMA and Countywide Planning policies do not require that the units be built at a certain affordability level. They require that your plans regulations support that kind of development. But numerically, these two charts show what those numbers look like.

And corresponding to the cost burden analysis that I showed earlier, the greatest requirements are at or greatest needs are at the lowest income levels. This below 30 PSH stands for, again, permanent supportive housing. And non PSH means ordinary or housing without permanent supportive services. And the hatched parts of the bars show what the city has had to plan for in this most recent update. And the solid green bars are the units as they existed in 2020.

So you can see that the vast majority of the change or increases, so to speak, need to be planned for at the lower income levels. And so that's what makes this a particularly acute challenge. This slide shows the has a table with the specific numbers. So the Countywide planning policies, again, requiring ISQA to plan for at least nearly 3,000 housing units affordable to households with incomes below 80% of median income. Huge challenge.

Mike, may I jump in real quick? Our growth targets citywide are 3,500 units. And of those, all except for three sixty three have to be within that uppercase affordable housing range. And the rest can be at market rate. That's a big number.

But again, the challenge is to plan for and accommodate them. You can't control what happens to market, but you can be held accountable as a city for regulations that would not allow that to happen. I see a question.

So if based on what you just said, 90% of the housing that gets built in Issaquah in near term needs to be for the lowest income sector, then what do they do? Say, we're stopping now that we've built the three fifty?

No. The requirement is that the city's plans and policies, regulations, make it possible for that to happen, not for it to actually happen. I struggle, as a lot of planners do, with making this more clear. Do you have something you want to add to it? Sure.

Yeah. We're developers, and we can't make people build things. We just have to make sure that we have a big enough sandbox to hold all of the toys, if that makes any sense. We're not going to put the toys in there, but we have to make sure that there's enough space to hold all of those toys. So we have to make sure that all of our zoning will allow for eight sixty eight units at 30% to 50% AMI. However, a market rate developer may come in and put eight sixty eight market rate units in there. We can't control that, but we did accommodate for it.

I understand. Okay.

Now if the city changed all of zoning to allow only single family homes, that would clearly not accommodate

housing

below AMI. That's where you would be vulnerable to appeals at the growth management hearing board and things of that nature. So why am I here, and what is Arch exactly? So Arch is a partnership of cities on the East Side. Most of those that are captured in this blue or purple line, whatever it is.

Not Snoqualmie, North Bend, the cities toward the East are not members at this time. But Arch was begun at in 1993 as a partnership with Bellevue, Redmond, Kirkland, and King County. Because at that time, just as now, people were up in arms about housing affordability. And the leaders of those communities thought that none of them could handle it on their own. And maybe it would be a good idea to think about housing economies as a regional or a subregional system, and not something that individual cities could do on their own.

Maybe we could pull some money together and fund some affordable housing projects. Maybe we could share policies and ideas for incentivizing affordable housing, things of that nature. And so that's what they did. And through the rest of the nineties, 12 other cities joined Arch. So now we have 15 cities in King County as members.

Our main lines of business, if you will, or focus fall into what we might consider these four areas. The pooling of funding for investing in affordable housing is a big one. And the second one that directly involves production and preservation of affordable housing is land use and tax incentives. That's the area that I know most about. I know a lot less about the investment side of it.

But if we go on and you have questions about that, I'll do this again. Then monitoring. And this is an area that we've boosted up in the last several years. So I just mentioned that to assure you that once these units are getting created, we're not just letting them go loose. We continue to provide the staffing and oversight to make sure that those homes are serving eligible households and not exceeding the amount they can charge and things of that nature.

So for monitoring, just to let you all know that every house that is under the Arch jurisdiction or every unit that is under the Arch jurisdiction and has been funded by Arch has a covenant tied to it. And all of these covenants in our land use code, we list minimum requirements for the affordable housing. So about materials used inside, it has to be comparable to what is on the market rate units if it's mixed use, then materials on the outside. And then there are, as Mike mentioned, maximum rental rates and ownership rates. And so all these covenants are in place, typically rental for the lifetime of the building.

And Arch monitors, uses these covenants to help monitor and make sure that they're in compliance with these.

And we're always working for the city. We're not an independent in fact, we're incorporated. The only charter we have is an interlocal agreement with the city. So if I'm here, we're talking to you, I try to be a staff support for Kristen and for you as if I'm an Isquah employee and not just some outsider advocate or something. Formally, are all City of Bellevue employees because somebody needs to sign our paychecks.

But that's how we look at our role as being extended staff for each of members. And then the fourth area which we've really focused on a lot in the last few years is to do more outreach and engagement with communities that need affordable housing in particular, especially communities of people who may not have regular or be accustomed to interacting with government services or know how what's available and things like that. A lot of engagement activities, I think, have opened up our programs to a much wider audience. I know this is getting long, so I'll step through the next couple quickly. Of all the investment programs, land use, tax incentive programs are both rental and homeownership.

Right now, we have upwards of 2,600 affordable apartments that we monitor. And I think the number is about 900 units in the home ownership program. A great number of those are in ISSWA. On the investment side, the pooling of funding that I mentioned began with the housing the Arch Trust Fund. On a voluntary basis, Arch members will contribute to that annually.

Some of that comes from general funding. Some of it comes from other sources. It's collected over $120,000,000 since 1992 and helped fund over 6,000 units across the region. Issaquah, just a couple of years ago, established the IHIP that Kristen mentioned earlier. And that is funded by a tenth of a penny on the sales tax established through state law.

And another sales tax funding source mentioned there is HB fourteen oh six. Development bonus program also collects some in lieu fees. And so that's another local pool that the city controls directly. You want to add anything to that right now?

Last year was the first year we were able to use those funds through applications, and it went to LEO, the Life Enrichment Options. And they purchased a house in Issaquah, and we paid for half of that. That was used to IHIP funds. And then this year, we had three applicants for IHIP funds, and those are actually going to city council soon.

I don't want to go through this step by step, but this kind of maps out different tools or funding sources and what income levels they typically help support. LIHTC is that low income housing tax credit program of the federal government that is operated through the state of Washington that I mentioned earlier. And the Arch Trust Fund, the IHIP, King County has its own sources. And typically, when we're talking about subsidized housing, they want a single project will layer several of these sources along with their own other investments independent of outside of government oftentimes, and in order to make a subsidized project work. Now the idea of the Arch Trust Fund long term is I said that the contributions by the members were made voluntarily each year.

And projects are awarded each year based on proposals that we get from the developers. And the idea long term is that where the money comes in and goes back out in proportion to where to its sources. But any given project in Issaquah, for example, will be funded by not only Issaquah, but Bellevue, Redmond, Kirkland, who, you know, whatever. And usually, we try now we try to get a little bit from every city into every project. It's a little mapping to show not only the location of the projects, but where units of different types, or serving different populations, I should say, have turned out.

Although my color vision isn't that great. But many projects will be a mix of housing reserved for families, for people with special needs, or people exiting homelessness, or seniors. And so you can see how those are distributed geographically. Just a few pictures of These are mostly garden apartments, although the Cambridge Court project in Bellevue is actually housing built by a church based nonprofit in Bellevue that serves seniors. I talked about well, actually, I'm going to where did the land use one go?

Inclusionary zoning. Yeah, I'd like to do this and then come back. Is that all right? Oh, this is yours. Sorry.

Well, was going to say that from a land use perspective, there are voluntary approaches and mandatory approaches. And voluntary meaning that the city will offer an incentive of some sort to a developer to make some of the units in the project affordable. Maybe you give, the city would give, okay, your height limit is five stories now, but we'll let you build six stories or seven stories if you make 10% of the units affordable at some percentage of AMI. That's a voluntary approach. It's up to the developer whether to accept it or not.

The mandatory approach is to say, you know, we're going to give you the right to build to six or seven stories. And in exchange, you will have to give us 10% of the units at that affordability level. So now the choice is has been made by the city. And this city is authorized to do that because, as long as the value that you're giving, in that up zone is equal or greater than the value that you're getting back in the affordable housing. So we're very careful when we do analysis for cities to measure what those values are and recommend levels of incentives and affordability.

So that it's not just taking from the value of the project, but it's actually it's a win win that and the developer can gain some value through the exchange as well as ensuring that there's some affordability from the project. Now a multi family tax exemption program is a little bit the same, but instead of giving additional development capacity, height, density, whatever, now the city is, again, authorized by the state, is able to exempt the building, the residential improvements value, from tax exemption for eight, twelve, or twenty years, depending on what the conditions are, affordability conditions are in exchange. And so this is another way to get this is a voluntary thing, strictly speaking. But it's another way to say, we'll allow the developer to save or gain so much value. And we will reserve or in a sense, take back some of that value in the form of affordable housing.

What a couple of our cities have done very astutely and effectively, I would say, is to layer both the land use incentives and tax exemption programs in a way that brings affordability down as low as 50% of median income. And again, we go through a lot of rigorous analysis to be able to recommend something based on that we think will work. Now, I'll bring Kristen back up.

Thank you, Mike. So I'm going to talk about some of the different tools that the city of Issaquah uses. And while I was sitting over there, I realized weirdly, because I'm working on two things to take to counsel about this, that I didn't include one of our tools in here, and it's huge. Back in 2002, we waived well, 2002 initially, and then again in 2008. Started in the villages and then moved citywide.

But we waive all parks, fire, and traffic impact fees, school impact fees for all units that are affordable. We waive all plan review fees, building review fees, some connection fees that we can waive, everything. So it saves depending on your project, it can save up to millions of dollars on that project. So that's a huge incentive that the city provides. We are actually going to take this to the Planning, Development, and Environment Committee to maybe potentially make some changes to this on February 3, if you're interested in tuning in for that.

Development agreements thus far are one of the biggest tools that we have used to get affordable housing. Out of development agreements, we've gotten two seventy seven units at or below 80% of the AMI, six fifty units, all of those located in the Sequoia Highlands that are between 80120%. In the pipeline, we currently have development agreements that will allow or require three fifty plus units at or below 80% area median Under the developed, it does not include the transit oriented development trailhead that's coming in, which will have 159 affordable units that are there, some because of inclusionary, some because of another program I'll talk about, but those are not included in this right here. Mike also mentioned briefly our density bonus program, and this is a voluntary program. And the development agreement is also sort of voluntary.

You can do a development agreement, but nine and a half times out of 10, we are going to require affordable housing in development agreement. Density bonus, which is actually now a development bonus program, was adopted in 2013 as part of the Central Issaquah Plan. It is voluntary, and we have a base height. We say you can build up to 50 feet, and nothing there has to be affordable. But if you want to build up above 50 feet and go to 85 feet, then a certain percentage, 20% of that overage has to be affordable.

Then another so one third of that has to be 20% of one third has to be affordable, and then there's another portion, it's very complicated, that can either be affordable or a fee in lieu or open space. No one's chosen that option yet, but either affordable or fee in Lou. So since we adopted this and it's only in Central Istiqua. And since we adopted this, we've yielded 14 units, but we've yielded about a little over $2,000,000 in fee in lieu that are now in our IHIP fund that was mentioned earlier. Inclusionary zoning is something else that Mike mentioned.

This was adopted in 2017. It was as a result of the moratorium that was done, started in 2016. There were six items associated with the moratorium, and one of them was that we had just had a 350 unit development go up, and not one of those units was affordable. And city council said, nope. We want affordable.

So now if you are going to build in Central Isoquois in the zones that are shown here, so the urban core, urban core vertical mixed use, or the mixed use, and you just look at the colors up there, and you can tell which it doesn't matter which is which, then you are required, no matter how high you build, no matter what you put in there, if there is residential, you are required to put in affordable housing. And it's a sliding scale. So it'll go anywhere from seven and a half of your units, say, at 50% area median income, up to 15% of your units at 80% area median income. And when you develop, you get to choose those options. But essentially, the lower the AMI, the fewer units.

The higher the AMI, the more units that you have to put in. And our first two projects that are doing it came in last year. So we have Trailhead is one of those. Trailhead, if you aren't familiar with it, is going next to our transit station, and it's going to have the 159 units that I mentioned, along with about 200 units of market rate next to that. So it's between Maple and Newport and next to the transit center.

And the other one is called Park Place. It's over off of 2 21st And 51st Street, where the old Microsoft offices used to be. They're building 74 units, and a percentage of those is going to be affordable at 80%. Another one that hasn't come up was the Pioneer program, which we adopted 2024. This allows for two projects in the same zones as the inclusionary zoning, mixed use, Central Issaquah, and urban core, with 100 to 400 units each.

They can be rent or ownership, does not matter. The developer can choose the scale. Again, very much like the sliding scale, they can do 8% of all of their units at 60% or 10% of their units at 80%. And this program is not intended for affordable housing. This is simply to get more housing in this area where we want our growth to occur. So part of this is that they are not required to do development bonus program. They can build up to the maximum height without having to do that, but they still have to include the affordable units. There will be lifetime covenants associated with these, and they are also eligible for the multifamily tax exemption, MFTE. Haven't had any biters yet. We almost did, but hanging on there.

So that was my very short piece of this. So that was very long. So, yes, I see questions already, but we're open.

Commissioner Adair? Hi.

Hi. So the lifetime covenants on the arch properties, they extend even so if I were to buy an arch property, when I sell it, I have to sell it to another person who qualifies. Correct?

When it is being sold, the owner has to notify Arch. Arch then will help to advertise that property, but they also set the price. They say, it cannot be sold above this.

Yes. And then follow-up question. So does somebody have to apply to Arch directly and then prove that they qualify, or how would that work with a buyer?

You don't apply to Arch, but for sales, they do have a list of it's not an application process, but they do have a list of, I believe, owners and rentals. But they have to you have to prove to Arch that you qualify, and there's a lot of paperwork that's required.

The way it works practically is that if it's a resale, then the seller can use a broker, a real estate agent, and so can the buyer. And they work out the agreement to sell it. But once a buyer has been chosen, then they'll be referred to us for the income verification.

Commissioner, are you good? Commissioner Mulburu? Initially,

you started speaking, you said there's all these to get low income housing, we've waived all of these fees. And some of the fees that you mentioned, I thought required staff labor. So if you're and you went through the list very quickly. So I could be mistaken. But it seemed to me that there were certain things that required staff labor. Where do you shift? How do you shift the burden of that expense? Where is that put?

We don't. You do it for nothing? We do it for nothing.

How but you're hired for a certain amount. I mean, you don't work overtime in order to provide that service. You can only be so productive. Is it sort of bushy? In other words, it's not specified from anywhere? You can't do it for nothing.

We get our salaries. And when these things come in, we review them, just like we review any other projects. Now, if it goes out to a consultant, then sometimes, yes, we have to repay the consultant. We do not repay ourselves, though. But let me clarify, too, though. So the traffic impact fees and the park impact fees, if we waive, as we do, 100% of those fees, 20% of those fees we have to find a way to repay 20% of those fees that go toward parks and traffic and so forth. But they don't go toward staff.

Okay. And maybe I'm not making myself clear. But I guess what I'm saying is you have to spend your time. Your time has value. The city is paying you, but somewhere the city needs to receive that income so that it can pay you. Where does that income come from?

I am not in the finance department. Come in and really don't know the answer to that question. Your salary comes from the

general fund.

Yeah, our salaries come from the general fund, and we make what we make no matter what the project is. So are you thinking that we

I'm saying that the city has a budget.

It has income,

and it has expenses. Right. The amount of work labor is an expense. If you're not charging these developers and you still have the expense, the income's got to come from somewhere. Where's it coming from?

We get paid every two weeks for no matter what the workload is. So, you know, if I need that's yeah. It it is. It's that's our contribution to the city or to the to the developer.

I I guess I'm not making myself clear.

Commissioner Grass?

I have a very different question. If from the chart that you showed at the beginning showed the biggest gaps over the twenty years or so are gonna be at the under 50% median income. So we always talk about, like, rental and also ownership. I assume those are all rental. And because people under those are not buying or qualifying for if you're if you're barely making it, you can't buy.

So I assume those are at a higher all percent gonna be rental type units. Are you finding that the the ability to build those developers wanna build those and all the codes across this is more broad than just Isequois are set up to be able to achieve those. Because those are the biggest if you look at those little hash mark graphs, they're all at the lower end, and those are gonna be rentals. Let's be realistic about that. Are all the pieces in place to be able to get that both from the supply and demand, the supply of the cities having the ability to have the right rules in place, not just in the square, but broadly?

And then on the other side, the builders have interest in actually building those? Just more of a broader question.

Yeah. A lot of possible ways to answer it, I think. The approach to solving that, to creating those units, in my mind, has got to be a combination of the things you mentioned, the subsidies, the regulations that make it possible for a developer to only get to sell or rent some homes for below market rent and make up for it by the bonuses or the tax savings that they get on the other end. That's what pays for those on the market rate side.

So I guess this is maybe more of a question for Kristen. The things that are being built, at least what we see in ESCO right now, are more sold units, not rental units. I see lots of townhouses all over a million, million 5, and all that. That could just be a snapshot in time. The the bigger apartment I mean, are the developers wanting to build apartments, or they wanting to build condos?

And is there a place of how this could all work where a new development can be a mixture where the developer sells market rate condos, but they hold back that percentage, and they continue to own those as rental apartments. So you have a mixed type. Because otherwise, if a developer is in the condo business, they're they're just not gonna play for these under 50 the 50% and below. But is there are you seeing any mixed type of developments that have both owned and rental on the same thing? And you're you're shaking your head. I assume that's

No.

No. We're not. And, you know, traditional stat condominiums, we're not seeing those at all in Issaquah. And part of that is because of some regulations that were set by the state that provide that result in, like, big liability issues developers. So the condo type development we are seeing is townhomes, and those are all sold. And there are some rental a while ago, was all rentals coming in. Was all apartments that were coming in. And then over the last three years or so, it's been townhome after townhome after townhome. We just talked to somebody the other day who wants to do apartments, and some of that's coming back. But to your other point earlier, I think, yes, you know, the lower the lower the income level, it's gonna be mostly rental.

And ownership probably doesn't start till closer to 70% or above.

I think that's even optimistic in this area.

I mean

You think that's pardon me?

I think it's your to qualify for to buy something, you have to be much higher than that, I would assume, just the pure math.

We do have some units in our programs from and they mostly come out of Redmond, but at 50% of median. And we are able to find buyers who qualify. Some of it is supported by down payment assistance programs. But at 80% of median, it's not difficult at all.

Alright. Commissioner Older? Just question.

Can you make that slide deck available to the commissioners?

Absolutely. Yes.

That'd be great.

We've had a request recently to try and get these out earlier, but we have a lot of meetings. We're gonna try and get these out a little earlier, but it hasn't worked so

far.

That's great. Thank you.

Follow-up question. When somebody in the Arch program buys a condo or townhouse, a lot of times there are HOAs. And the HOAs have monthly fees. Are those regulated at all? Or are they considered part of the covenant that they have to be lower?

When we initially price the home, we build in what the actual HOA fees are, including if there's an upfront contribution to the HOA. Over time, of course, HOAs tend to raise their fees in order to support capital improvements and maintenance and so forth. That's become a problem. Because often the fees will go up faster than the prices themselves. So we don't have a great solution to that yet.

But it's something that we're trying to deal with.

Great job, Commissioner Dara. I think we stumped them. Commissioner Matthews.

I had a question about the urban core sorry, the urban village versus the mixed use, because I know that central is called where you want the most growth. So if, say, QFC, they decide, oh, we're going to sell this, you know, Kroger, and somebody wants to redevelop it as apartments, is there a requirement? Because it's not mixed use, it's urban village, do they have to bring in another retail? I mean, I'm trying to figure out what the difference is between mixed use. Urban village doesn't seem like you need to do that.

Is that right?

So excuse me. The urban villages are Issaquah Highlands and Talis and Lakeside. And where we require the housing is urban core, which is the red up here, and then the purple stripe, which is the mixed use Central Issaquah. So if someone was to come in and tear down the Safeway or the town and country and want to put in residential there, that's urban core, yes, they would be required to put in affordable housing. But if they're up in Issaquah Highlands now or Thales, no. They have met their obligations for affordable housing. So follow-up question. Sorry about that. Do

they have to provide the retail again? Because it's looking like we're looking at a food desert coming our way if we start redeveloping the core and not have the retail available. So I'm just kind of seeing into the future. Yes.

So we actually have a developer obligation in our Central Issaquah plan that says you need to replace if you come in and you take a business out, you need to replace find a way to replace those employees or give them opportunities for employment one for one or, you know, whatever we this transit engineer transportation engineering manual says. We have not found a legal way to codify that yet. Uh-huh. So that is actually something that we are working on right now. And we actually came across something the other day, so we'll we'll see how that pans out.

Yeah. Great questions, everyone. Commissioner Millinder Erwin.

Thank you, Chair Bliss. I have a question about the Arch model with respect to office building conversions if converting those to different types of either affordable housing, a small a of a big a. Would that work with your arch model?

Well, we would defer to whatever the city's regulations are on that. But we could administer it.

Yeah, two potential projects coming in that would be commercial or office conversions to multifamily residential. And yes, they would be required to comply with the arch covenants.

Interesting. Thank you.

Great discussion, everyone. Commissioner Mulberry, do you have a question?

I was just praising her for a really interesting question. Sorry.

Yes. Well deserving. Go ahead and turn off your microphone. Otherwise, you're going to give me so I think we move on? All right.

Sorry. Yes. That

was I'm sorry. That was She's waiting for it. Exactly.

Right? Okay. I didn't realize that was the end of the presentation. Well, good way to end on such thoughtful questions from the commissioners. Great discussion. I wanna thank senior planner Mike Stanger and, obviously, planning manager Kristen Leeson, and also senior planner, Kate Kaney, for the great presentations this evening. We're gonna move along because that concludes our regular business, and we're looking for reports. And our first report is city council updates.

I mentioned one, that we're going to be talking about impact fees at the February 3 planning, development, and environment committee. And you all might wanna tune into that one just to see how that goes. We will also be taking to that meeting sorry. We'll also be taking to that meeting the docket that you all made the recommendation on tonight. And just in case you're interested, there will also be an Issaquah climate action plan update given to the committee at that time as well.

And then I mentioned this last week, I believe, but on March 9, potentially March 2, but right now it's scheduled for March 9, we will be taking a topic called barriers removing barriers to development to the city council to have them help us identify we're gonna talk about different ways that we think that can be done, and from that will come amendments that we'll be bringing to you next year. So you might wanna tune into that one as well.

Is that something that's worked out through the city and just developers over time?

We are talking to developers. Right now, there's a meeting coming up in February between staff and developers, and that's why we're going in March so that we can have that meeting first. But we're also working it out internally. Just things that we've heard, things that we've seen that how the way things function inside, as well as what we've seen comments that we've received from outside.

Okay. Great. Stay tuned. Alright. Any other

updates? No. I think that's it. For those of you there are three of you whose term limits are up this year, and the applications are out if you are interested in applying again. Just a note to all of you out there and all of you, there are not just positions open here, but there are positions open all over the city in all different boards and commissions. So if you know anyone that might be interested, let them know.

Alright. Basically, our our final business on the agenda is just any other business or announcements?

None.

Okay. And Senior Planner Kaney, I got that right. I looked at my notes after everything. I don't think I mentioned how many people said no because there was no no. But we want to make it official. It was official, right? Okay. Perfect. Always scares me when it comes to the formalities up here sometimes. Alright. Well, thank you everybody for being with us this evening. That does it for us. We're gonna conclude this meeting of the Planning Policy Commission tonight at 07:56PM. Thank you.