Government Performance and Finance Committee - Regular Meeting

We do.

So, okay.

I'd like to call the order of the Joint Government Performance Finance Committee and Audit Advisory Board meeting on September 15th, 2026. Clerk, please call the roll.

Board Member Ball? Absent. Board Member Claus-McGann?

Here.

And Board Member O'Loughlin?

Here.

Vice Chair Bushnell?

Present.

Council Member Rumba? Here. Council Member Sevelle Gay? Absent.

Alright, so we'll now move on to public comment. Clerk, has anyone sent virtually or in person for public comment? Neither. Alright, so with that we're going to close public comment. So, at this point in time, Councilor Slugging has let me know ahead of time that he is running a little bit behind, and how the seller program is a topic that he is definitely very interested in. So, what we're going to do is we're going to move two of our presentations on the agenda to accommodate that, and hopefully he will be here by the time we get there. So, we're going to take the briefing items a little bit out of order, and we're going to start with briefing item number three, amendments to the Tacoma Municipal Tax Code, substitute 6A, or amendments to the Tacoma Municipal Code, subtitle 6A, tax code.

And I'd like to call on Daniel Larson. Daniel Larson, the tax and license manager. And today I am going to talk about utility tax rates and increasing them from 6% to 7.5%. On August 4th, 2026, Tacoma voters approved proposition number one that includes an increase to the city's utility tax rates from six to seven and a half percent. And what I'm presenting today is the effect of that on the Tacoma Municipal Code, just changing those rates, actually, in the code. Just a little overview. Proposition 1 levied the additional 1.5% utility tax on natural gas, power, and telephone services, which includes landmines and cellular phone, for 10 years beginning January 1, 2027. These key transportation priorities are better neighborhood streets, safe streets to improve the city's busiest streets, and improved connections to expand access to transit, schools, and neighborhood districts. So the tax rates being amended are spread across four different chapters in the tax code, increasing the rates from 6% to 7.5%. And just to note, these amendments will not affect the tax classifications already set at 8% for solid waste, cable, water, rail, and wastewater. Next slide. Can you go one more? Thank you. The increase in the utility tax rates will increase annual revenues and the streets initiative fund by approximately 10.5 million, which has been planned and accounted for in the current budget. Next steps, our first reading next week, September 22nd, with a second reading the following week, and actually that should be September 30th, the second reading because the date got changed. that week, the council meeting, and the effective date, January 1st, 2017. Okay. Questions?

Any questions for Danielle? Okay. Thanks. I know we're talking. Yeah, the questioner is, I know we're talking, so I'm going to say his name.

actually i need you to make the motion so you do have to talk to me thank you for the permission uh i move to forward the proposed amendments to takoma news club subtitle 6a to the full city council for deliberation second all right all those in favor signify by saying aye aye

Alright, let's start adopting. Alright, now Daniel's not even too far away because we will move on to Read Number 4, which is Amendment 6A.30, Business and Occupation Tax.

So, I am here today to talk about amendments to Subtitle 6A again. These are restricted to Chapter 6A.30, the Business and Occupation Tax. and further restricted to the definitions of sale at retail and wholesale. These are required by Chapter 35.102 RCW, Municipal Business and Occupation Tax, or what we call the model ordinance across the state. Next slide. So just a little bit of background on the model ordinance. There are 54 cities that impose a local B&O tax on the grocery seats of businesses engaging in business in their city. Since 2004, cities with the local B&O taxes are required by Chapter RCW 35102 to adopt the B&O tax model ordinance with mandatory uniform provisions. across the cities that are related to a minimum threshold before we can tax the gross receipts, tax classification definition, the definition of engaging in business, and how we allocate and apportion activities occurring in more than one jurisdiction so that we're not unfairly taxing somebody on more income than they're actually generating. During the 2025 state legislative session, Senate Bill 5814 changed the definition of sale at retail, which is one of the mandatory tax classifications under the model ordinance. Senate Bill 5814 added the following services to retail sale, advertising services, live presentations. Thank you. information technology services, custom website development services, investigation services, temporary staffing, and sales of custom software. During the 2026 state legislative session, there was another bill passed engrossed on the state ESSB 613 and 6346 that contains some clarifications and exemptions to the definition of sale and retail. So the tax classification definitions are a mandatory provision in the model ordinance, which is why we're required to change this. The Senate bills that were passed this year contained the clarifications and exemptions in the definition of sale at retail. And so therefore, we need to amend our municipal code 6830-030 where the sale of retail definition resides. The amendments that we are changing, you'll see a long list of amendments in your packet probably, but to summarize those, we're clarifying the definition of data processing services, identifying a list of activities that qualify as investigation services, clarify that the definition of temporary staffing exempts hospital-based clinical providers, Consolidating tax treatment affiliated groups includes a number of activities from the definition of live presentation and adds an exclusion to the definition of digital automated services. In addition, we need to update the definition of sale at retail in one spot where it's parallel to the definition of sale at retail. Next slide. So we will see some fiscal impact from this change overall. So the clarifications and exemptions excluded reclassify some service activities originally included in the 2025 definition from the retailing classification, which is a lower classification rate of 0.153 back to the service and other classification, which is a higher rate at 0.4%. So the change will increase city B&O tax by approximately $135,000 starting in 2027. However, the local sales tax collections will decrease, which actually started in July of this year and will annually reflect an approximate decrease of $515,000. So the net to the general fund is a decrease of $415,000. And then additionally, our other individual sales tax funds for mental health, affordable housing, Tacoma Crades, public safety, transportation benefits, we'll see a decrease as well. These are all reflected in the current proposed budget of 2017. last slide is we are these will also be at september 22nd from council for first reading and september 30th actually for second reading with an effective date of january 1st great any questions for danielle just so this is all just stuff that basically are coming from rcw Right. It's required. It's mandatory. We don't have any options of making any changes. The only thing we're able to fluctuate a little bit is the effective date. So all the cities are making it effective January 1st, 2027, where state made that change July 1st.

Gotcha. And then just the way things are calculating, we're actually going to have less revenue just with the updates. Right.

So it's kind of like an unfunded date. It is, it is, we did see an increase from the change in 2025, um, which we wasn't was something we would plan for either. But this is now a decrease to that expected income. We thought we were. Okay, thank you.

Uh, the, um, so what's your, what's your question? So. The increase was in 2005, the state expanded things, put more things in the sales tax. And then in 2006, the change was where they created the millionaire's tax and then created all the sales tax exemptions to kind of offset those two growths. I know, and I think some of the, you know, being from the school district, I think some of the sales tax should just definitely have some impact on some of our government agencies. You know, the live presenter one was a big one for a lot of organizations around that. And then so the nexus is we're about $550,000 short a year ongoing? Well, that's about $450,000. Less.

Yeah, because we'll get a little bit more B&O tax now, less sales tax. Gotcha.

Yeah, which I guess, you know, is an ongoing conversation we're having at the Association of Washington Cities, which is, as the state has moved their tax system more progressive, they've left cities to remain kind of still over the rest of the place, and then they're also carting out our ways to be able to pay for ourselves, too. Which I guess gives less credence to the state to be committed to that idea that they're going to make us whole if they're not. Let's slay this session. Which we'll see. We'll find who that is. Okay. We shall see. We shall see. Well, Daniel, let's, again, this is not, Vice Chair Michele made it very clear, nothing really in our control on this one other than just the effective date. So with that, I would motion Vice Chair Michele.

I move to forward the proposed amendments to Communist Code Chapter 6A.30 to the full City Council for consideration.

Second.

There we go. All those in favor say that by saying aye. Aye. All those opposed? Thank you, Danielle.

Thank you.

All right. Let's see. You know, I'm going to try to get customers to log in as much time as we can. So with that, I'm going to change our agenda one more time, and we're going to go with item number two, which is the State Auditor's Office 2025 Exit Conference and Financial Federal Audit. So I think I see our colleagues at the Auditor's Office with us. So Sandra, are you here?

Hi, everyone. Actually, Sandra is not here today. She sends her apologies. She had a situation come up where she was unable to join us.

All right. So who do we have with us from the Auditor's Office today? Is it Judy and Jason? Yes.

Yes, good morning. Thank you, everyone. It's good to see you all. And we're very excited to share the results of our audit this year. I'm Judy Lee for anyone who I haven't met before. I'm the Assistant Audit Manager with Team Tacoma that supervised your audit this year. And today I have Jason Starr, who was your auditor in charge. He led a team of, we had many people attending, participating in your audit and very happy to share the results. Before we get started, it's important to note that we did prepare a packet for you. So everyone should have received a packet that has more detailed information. It's a supplement to our presentation. So if you could follow along with that, we'll be happy to answer any questions as we go along. And also at the end of the presentation, we will have a question and answer comment slide for us all to discuss. Let us go to the next slide. One of the most important thing about audits is their role to increase trust in your government. Audits can shine a light on areas that are important to your citizens, your external stakeholders, and your own employees. Our audits are able to do that because the public trust the State Auditor's Office as an independent organization that provides transparent examinations of the operations of state and local governments. Another important role of audits is the ability to identify areas where efficiencies can be improved and where you can be more effective in complying with the requirements. We can also share with our audit liaisons where you're working more efficiently and effectively, and we try to share that throughout the entire audit. So our goal today is to make sure you understand the results of your audit, and it's the financial statement and federal audit that we are exiting today, and answer any questions that you may have. So let me turn it over to Jason, who is in charge of your audit this year. Jason?

Thank you, Judy.

Go to the next slide.

Yeah, so I'm going to start off by talking about the financial statement audit with the scope of January 1st, 2025 through December 31st, 2025. And the purpose of a financial statement audit is to issue an opinion on whether the financial statements are free of material in the statements and can be relied on. for users for making decisions. We are issuing an unmodified opinion on presentation following US GAAP, which stands for the Generally Accepted Accounting Principles. And as part of the financial statement audit, we are required to understand the controls and the processes that are in place for preparing the financial statements. And if we identify any control deficiencies or noncompliance, we're required to communicate that with you. So in our report, we noted there are no significant deficiencies in internal control, no deficiencies that we consider to be material weaknesses, no instances of noncompliance that were material to the financial statements. So that's great. If we go to the next slide. Yeah, and the statements are required to be communicated. But again, there were no material misstatements that were identified. And there are other uncorrected misstatements that have been provided to you, but they are not material misstatements. And additionally, in our audits, we identify areas that are significant risks. We always consider the risk of management being in a position to override controls as a risk for the financial statement audit. We didn't identify any issues with management override of controls, and there were no other significant risks requiring special consideration for this audit. And then the next slide. Okay, and then Baker Tilly performed the audits of the power, wastewater, water, solid waste, and Tacoma rail funds. We performed procedures to ensure that we could rely on their work and re-reference their work in our audit report. We did not find anything about the quality of their work that caused concern. There were no limitations that restricted our analysis. We did not notice any material misstatements of the financial statements that may have resulted from fraud or suspected fraud.

The next slide.

And related to the financial statement audit, the city prepares an annual comprehensive financial report, also known as ACFR. And it contains additional schedules and statistics about the government. This is an optional award program that's offered by the Government Finance Officers Association. And we issued an annual comprehensive financial report letter on June 30th, 2026, as a completion of that audit. Okay, go to the next slide. Okay, in the next I'll go over the federal grant compliance audit results, also referred to as single audit. The scope is the same, January 1st, 2025 through December 31st, 2025. The purpose of this audit is that it lets the federal grantors and funders know that the city materially complied with the requirements of the federal funding. This audit is required whenever the city expends more than $1 million in one year, which is always. So there's always a single audit. And it is conducted in accordance with the government auditing standards and the uniform guidance, which is the federal requirements. So we are issuing a report on the compliance and internal control over compliance for each major program that was included in the audit. And in that report, we are issuing an unmodified opinion. We reported no instances of significant deficiencies, no deficiencies that we consider to be material weaknesses, and no instances of noncompliance. So it's great. Go to the next slide. And here you can see which programs were included in our audits. We had a pretty big audit this year. The programs are determined by following the uniform guidance. And this year they included the CDBG program, Economic Development Initiative, Highway Planning Construction, Assistance to Firefighters Grant, and Support Security Grant program. And together they counted for about 81% of total federal expenditures for 2025. The next slide. Okay, and then there were a couple of findings last year that the city prepared corrective action for. And we perform procedures to confirm the status of those corrective actions. The first was for the CDBG cluster for reporting requirements. And the status of that corrective action has been fully, fully corrected. And those corrective actions you can see in the in the report and also in your packet. The next slide. The second was for the Edward Byrne Memorial Justice Assistance Grant. For a few issues, there was subrecipient monitoring, procurement, and suspension and debarment. The status on that one is partially corrected. Again, we performed some procedures to verify the the status of those. And this is partially corrected because there's still some guidance materials that are in development, but many of the other corrective actions that were described have been implemented.

Okay, next slide.

Okay, and some closing remarks. The audit costs are in alignment with our original estimate. The accountability audit for fiscal year 2025 is estimated to be completed this December or early January, so that will be kicking off very soon. The next audit is scheduled to begin in April 2027 for the the 2026 year, starting with the financial statement. Then federal programs will start that in the summer, end of June kind of time. And then accountability likely at the same time in the fall next year. And we've provided an estimate of the cost of that audit in your packet. And go to the next slide. And I think I'll pass it back over to Judy.

Okay. Am I unmuted? I'm a little slow today. I just flew back in from Japan yesterday. So I do apologize for that. So we do expect the city's reports to be published on our website in the next one to two weeks. And you can sign up to receive email notifications on when our reports are released, as well as other news and alerts, including resources that are available on our website at sao.wa.gov. Our email that we send out when the report is published will include a link to our website. you'll be able to access it that way. We'll also send you a customer service survey. We encourage you as anyone else that participated in the audit to complete the survey. Please forward the survey to anyone that you believe might want to share feedback on our services. We always want to do our best to make sure we also give good customer service as we're conducting our audit. So we appreciate that. Go to the next slide, Jason. We want to thank city officials and your staff for the ongoing commitment to fiscal accountability and accurate financial reporting. Especially want to thank Susan and Polly for their timely communication, for prioritizing our responses to requests, and for meeting with us each week and working together to make sure we have all the information that we need and our staff is not being held up for anything. We really do appreciate that with the city. It helps us to be efficient and effective in our audit work also. So appreciate that and want to really thank Susan and Polly and the staff for responding to us so quickly. Next slide, Jason. All right, this concludes our presentation to the city for the fiscal financial statement and federal audits. We want to thank you all for your time today and participation in the meeting. And we'd like to open it up to any comments and questions that you might have. So does anyone have any comments or questions for us today?

All right. Thank you very much, Judy. And having done that flight for you, I'm back to the West Coast. I'm glad you're here with us today. It's never, I joke with my son, sorry, side story. I joke with my son that when I flew back the last time, I left Tokyo at 6 p.m. on Saturday and arrived at SeaTac at 10 a.m. on Saturday and actually traveled back in time. So I'm actually having a good experience.

You're a little bit dizzy here.

Yes.

But glad to be here. Glad to see you all.

Great to have you. We'll go with Board Member O'Loughlin.

Yeah, just a minor clarification on the slide that described the work that Baker Tilly did. It said it left out stormwater. That was one of the utilities. And it is a subfund of wastewater, so it can be considered the same. That's called the sewer utilities, typically.

Thank you for that, yes. That is one of the five audits that Baker Tilly did, and they had a report for each one of them. So, yeah, that's good clarification and correction.

Thank you. All right. Any other questions? No, I mean, good to see that staff has taken corrective action on all the things that were brought up in the last audit. And thank you for explaining the partially complete corrected statement there I had a question but then you explain kind of how why it's partially correct or not completely correct so we're in the process to deal with that but otherwise I don't have any further questions it's always good to get reports with no real further action clean report yeah yeah okay seeing no further questions thank you you all for being here, and I guess we'll see you back here again. I will see you at a regular cadence, so I'm sure we'll see you back here again sometime soon. Yes. Thank you. Thank you. All right. So, with that, we've basically run the agenda in reverse order, and so we're going to go back to the top, which is for the item number one, which is the affordable housing accelerator program. So I've got some paperwork to hand out to folks here. Oops. No. That was a joke. I'll move over here so I can talk about it. No, I... For the audience who cannot see, I joked with the council member that I printed out copies, and I joked that I killed some trees for this. I will just pause. In my own defense, I was at a presentation from somebody from a conservation group, and they said, don't feel bad about the trees dying for the paper, the tree died for something more important than that, which is usually like telephone poles or things like that. So that's just the thing. The tree didn't die for the paper. Okay. As you can tell, we've been off for two weeks, so everybody's in a pretty decent mood here. And the jokes are flowing. So I'm Kustler Heintz, Chair of Corporate Finance, but today I'm presenting a little bit on the Affordable Housing Accelerator Program. And it's just for reference for those that are following along, I made a presentation back in July, I was gonna say August, July, in July to the committee about some of the work I had been doing to kind of reach out to developers and understand what are the issues and challenges you're seeing in developing and building housing here in the city of Tacoma. So that was the first part, was kind of, what's that here? And then what I have before us today is, oh, here. That's probably better. I'm sitting here. Is kind of a draft for discussion only of what are some of the things we could do going forward around affordable housing, sorry. The reason I want to talk a little bit about this is Since I've been on the council, so since 2020, we've engaged in a long process to try to allow more housing here in our city. So we did a little Tacoma as our big kind of comprehensive update to our zoning code with a real priority and real focus on how do we allow more types of housing in our city and just more housing in the council. So in many cases, as I'm kind of talking to elected officials across the country, They're all in different places. Everybody understands they need more housing, but they're all in different places. And there's some electives that I talk to where they are in the heat of the home and Tacoma conversation. Like, we need to change zoning. We only allow single family housing. We have parking requirements in Saturdays before cars. You know, parking spots for every housing unit, right? So they're really doing the land use part. Then you have folks like us where we've done the land use component, we've changed the code, and now it's, well, how do we get it to happen faster? There's a whole other group of folks that are a little further ahead of us that have done the code, and they're putting things in place to make things move faster. And so this is my attempt at laying out what I think are some things we could do. So again, this is a draft, right? So this is kind of me pulling together ideas from across the country, working with policy staff around what could we do. I haven't had every director for each department look through and sign off on each one of these things. It's kind of meant to be more as a, in my mind, a menu of options. There we go. All right. So with that, let me see the background here.

Yeah.

Perfect. All right. Next slide. I'll talk a little about the overview of the problem, but just to be really clear, Tacoma's growing. It's a great thing. We want to grow. We want to be a city that's growing and becoming more dynamic. At the same time, we've seen our housing crisis really kind of skyrocket in many places. I have made this comment to some of my constituents that the last time you were looking for a house, the year started with a one. You really have no idea how expensive housing has gotten here in the city. And so housing has gotten really expensive, which creates a tension where some of our long-term residents could be pushed out. And it also provides, uh, makes it harder for people to get their start here in our city. And also people are coming here for work. So housing is kind of a triple threat to kind of our long-term growth and sustainability of our city. And the. We've taken some really big steps. As Councilor Romo would remind me, the affordable housing access strategy predates my time on the council, but it's been kind of the roadmap for a lot of the work the city has been doing. That included home in Tacoma, and this is more of a, well, what can we do to make this move faster? Next slide. So, one of the key kind of things that I've talked about in our last meeting, and it's been in my mind for a while, and a lot of conversation I've been having with The developing community with residents, through my work with the Association of Washington Cities, is this idea of democratizing development. What I'm really trying to get to is, how do we make it so that more people can take action and develop if that's what they want to do? I had a conversation with a developer many years ago, and he said, John, if you look at these big 502 buildings out there, There's very few people that can do that. Very few people that can get the money together, the capital together, the expertise, the construction, capital, all these pieces to get that big building to come off the ground. He said there's probably five people. He said, but if you look at a duplex, an ADU, a fourplex, an eightplex, there's hundreds of people that could do that. And so his question to me was, why would you want to do things that would empower five people when you could do things that would empower hundreds of people? And so, part of this process, what I'm trying to look at here, is how do we look at things like education, cost transparency, incentives, and access to support to allow more people the opportunity to be the developers, help build our city. I don't know if customers should log in, I've talked to the OneDrop folks, I've talked to Rumbod, I've talked to a lot of developers, I've talked to folks that are in the smaller development space that are talking to us about how do we get this to happen. You know, how do I take a single family home, and add four more units, or add 80, or add two blocks, and five more houses. So that's really what we're looking at for this part. And so in the report, there's kind of five objectives that I've kind of laid out as things that we could be thinking about as a council, as a utility board, as a city. So the first one, if we go over to the next one, oh, sorry, the first one is, sorry, is empowering for builders. Sorry, I'll start with that one first. And really just thinking about how do we make it easier for more people to do this. One of the things I've heard, and I think it's true, is we have some folks in our development community that no matter what obstacles we put in front of them, they will build. They will find a way to make it happen. And then we have some folks who start the process and get bogged down. And then we don't get from the idea to the actual thing being built. So the report here has kind of Objective One and Power BIOS has a few kind of things we could be doing. Education to simplify the process, so making sure people know what's required to be able to build. Cost transparency, so thinking about how we can be better at providing as much up-to-date data on how much it's going to cost to build something as early as possible in the process, so people get a full idea of the price tag. Looking at incentives to get people to do more work around it. We already have some, but the other ones are there. having easy access to support, right? And so I want to dive just a little bit more into the providing incentives component. State law recently changed. Thank you to our assessor treasurer and former council member, Marty Campbell. There was an incentive just in King County that allowed property owners to have a property tax exemption for DABUs on their property. It was just contained in King County and the assessor's offices more broadly were kind of the ones that were asking questions around it. I know that we talked to accessory treasurer Campbell about potentially expanding Pierce County. We got his support. And so at least recent state law, we did change it. It did get changed to allow for a property tax exemption for accessory dwelling units for low-income households. So that's currently allowed by state law. It's something I'd like us to explore here in the city. So I'm gonna just put that out there right now. I know that I've become an MFTA person or at least one of them. So it's something I'd be interested in further exploring. As you can see, oh, and one thing with the report, there's a key on it, which a star means probably is new staff would be needed to implement. A dollar sign, as you can imagine, is additional funding would be needed. And a check mark is that this has been identified by city strategic plans. So as you can see, providing incentives, it's not so much that there's a tax incentive for ADUs. for low-income residents, but it's that someone has to track to make sure it stays in the hands of a low-income resident, that it's being rented to somebody below market rate over time. So that's that one right there. So that's objective number one, empowering more builders. I'm just gonna go through all five of these, and then I'll answer questions. So the next slide, objective number two is identifying more space to build, right? And this is not just about becoming more proactive and identifying city-owned property. It's also taking new steps to think about all of our spaces in our urban landscape and how do we utilize more spaces for housing. So this lays out a couple things, a few of which we're already working on. Number one is parking requirements that I'll just call out that's listed here. Parking reforms are a critical piece of how we get more space for housing. The city's already done a lot, the planning commission's already working on this, and they're bringing a proposal back to us about what we should do for parking requirements in the city in general. But one of the questions we ran into at home in Tacoma is if you think about the lot being a square or a rectangle, there's only so much you can fit on the lot. And every time you require a parking spot, it requires less space for you to build housing. if less space for trees or open space. And then what we do know is structured parking, like a garage, costs more. So when you think about, there's a limited amount of space on the lot. If you require parking, it has to go somewhere. If you require it to be incorporated into the building itself, it raises the cost of the building, and that's not the challenge with that. So along with that, looking at auditing some real property, Um, transforming, you know, dated spaces, right? So how can we think about, um, you know, different parts of our rights of way and property that maybe you've not utilized? You know, I think about right of ways it's not used anymore. So we don't use it. It's how can we think about using that for more land? Uh, working closely with faith based organizations. I think a robot has chatted about me. And many of us, you know, we were talking, I was at the Mason United Methodist Church over by Proctor. They're partnering with Mercy Housing to build a brand new family-sized unit housing project for affordable housing for families. And one of the questions they asked, you know, so they are a faith-based organization that has land, rich, and cash for, and has a declining attendance. And they're, what do we do in the future to help utilize our property for, you know, our mission? And they're going to build housing. There's other churches in our community that have similar challenges like that, and one of the things we do is think about how we can be part of them. State law already allows a bunch of things that we need as part of that to help us do that. So that's another piece in here I think would be of interest to most folks here. One thing I thought was interesting when we talked to the Basin United Methodist Church folks, the question was, well, how can big could you build it? Because actually faith-based organizations have a lot of bonus capacity. They can build a lot bigger than our code says. They can build more housing. And the comment that was made at the church by the pastor was we're actually building it as big as we can afford to build it, but not as big as we could build it. So it's not a zoning issue with them, it's capital. It's how much money do we need in order to go bigger. And we could go bigger and build more family-sized units. Which is good. Something for Councilman Rumbaugh, I know she's very interested in family size units, something they said there, and this might be something just to flag for you, was currently the way the State Housing Trust Fund works is there's a cap for how much money you can get per project. And what the gentleman from Mercy said is we build family size units, which are more expensive, but we're under the same cap as somebody building studio size units. And so what they were saying is we would love either a sliding cap or allow us to do more if you're going to do a full family units. It's something to put on the list for future.

State agenda? State agenda.

Yeah. What caps? I'm sorry. So there's a cap on how much money any one project can get from the state housing trust. I think it's $10 million. But his point was $10 million in a project of all studios, which is $10 million in a project of all three and four bedroom units. His point was, he said, you should count the number of bedrooms in the project, versus the number of units. So there you go. Objective number three. We'll go to the next slide. Making it easier to build. Some of the stuff we're already doing. And again, I'll say that at the end here, but looking at other ways we can kind of leverage and make it easier to build. So one of the things we talked about is pre-proof housing plans, which is something we've already done. with ADUs and looking at how we can scale that up to missing middle projects, different styles of housing with more pre-plans for missing middle housing styles. I know there's challenges when we talk about the building code, but I know staff is looking specifically at the townhome model because that fits under a six-unit townhome and it doesn't trigger the commercial code. So there's something there to be thinking about. One of the things that is kind of an interesting idea that I put in here that I've seen other cities do is pre-approved infrastructure plans. So we go back to the cost transparency coming in and saying it's hard because Tacoma is AA. uh uh not a greenfield brownfield city right it's all infill right so infrastructures look all the same so some of these cities we're seeing that are expanding new areas where it's green they have these pre-approved infrastructure plans we're like okay put your house here this is what the infrastructure looks like and you can just do that um it'd be harder for us to do that considering it all infrastructure looks hodgepodge there's a good word for it but something to be thinking about you know is there a way to just um tell if you come in for development say hey look if you infrastructure looks like this, you can go, right, and think about that. One, bringing the other piece in this, and this is more Council Member Walker, but just something she's talked about, is building materials that are more, so looking at incentives for reuse of building materials, and what that looks like, and then also, I think Board Member Klaus-McGannon mentioned this in our meeting earlier, mass timber, thinking about how we can move, kind of support more manufacturing-style homes, right, so not only the mass timber being the pieces put together, but also encourage people to build more. And I think there's a lot in there that people are already doing it, so it's an option for us to maybe be a leader there. Okay. Number one, objective number four. Increasing private capital projects. All right. So one of the things that we've brought up, one of the things I've heard and I try to kind of come back to is the house I live in, was built with zero public dollars. I mentioned many of the houses people lived in were built with zero public dollars. And the interesting thing is people will actually just build housing for money. And then you give them money in exchange for it. And the government doesn't get involved in that whatsoever. And most of the housing we get built in our country is built through the private marketplace and people building it and selling it. And so if we want to really kind of tackle this kind of housing challenge we're facing in our community. One part is, I agree completely, that we as a city and a state, federal government, have to step in and help subsidize some of the housing, especially for the more affordable stuff. But there's also this pool of resources out there, money that's available, that once you just build housing at the market level, or just above the market level, that we could help find ways to streamline and make it happen faster. And what that does is as new housing comes online, it creates space in the marketplace and people self-selecting those spaces, right? So then if I have more, if I live in a kind of an older building and I want to move into a newer building, I can move into that newer building and then I open the space in my older building. Or I'm happy in my older building and somebody new moves into the city, they could instead move into the newer building and not kind of push me out of my building by being able to pay more rent. So there's a balanced ecosystem of housing we need to build. And part of that is increasing climate capital. So one piece that we hear a lot is streamlining permitting, which is something we're already working on, and I think Dr. Sjogge is going to talk about that, to make it faster for projects to be put into the ground and then financed. When you think about how financing works, right, so I borrow money to build something. Every day I have to hold onto that debt. before I can refinance or sell it is what costs me money and increases the cost that I have to pay for it in the end. And so my streamlining permitting short timelines, not only getting housing built faster, but also helping with the cost. There's some, taking a look at some of the regulations we have around property, which is gonna be a larger conversation, I'm sure, in the next couple of years. But we did hear a lot of developers talk about risks associated with when you build housing for rent, that there's unpredictability, whether your rent will come back to you, or whether you'll be paid on time. That is causing, that is cooling the marketplace around who wants to invest here. So that's what we'll have to talk about. And then, one thing I do hear from developers a lot is enhancing community safety. See what? People wanna build in safe communities, and the more we do on safety, the more we can encourage people to build here. So some of this is just really, How do we make Tacoma continue to be a desirable place that people want to live in the desert? And last one, goodbye. Getting funding into projects. So this is the last one, and this is probably what I have been the most interested in. When you build something, you have to, you're going to impact the infrastructure around it. How do we balance that as best we can? And I think one of the lessons that I've picked up, and I've told developers many times, is we're happy the housing's here, but we also have infrastructure we have to maintain, and we can't pass all that cost off on the people who are here to afford it. And so there has to be a balance between when a new developer comes, who pays for the impacts on the infrastructure. So some of the things that are suggested in here, is kind of looking at infrastructure outside of proven support funds. So what can we do to help with, when new development comes in, if it meets some criteria, maybe it's affordable housing, maybe it's home ownership projects, whatever criteria we set, is there a funding opportunity where we could buy down or offset some of the infrastructure costs? So that's part of it. And those costs have to be associated with things that are in the public right, that have public benefit too. So we can't do it for private benefit, but if, say, helping find out the cost of ADA improvements for sidewalks or improving utility hookups and things like that. We can do that because it has a public benefit. And then the second one is electrical infrastructure support. And this is just around one of the costs I did here is like the cost of electrical infrastructure when people are hooking up into things. I will say one of the things that I am working on that I'm hoping will be part of the legislative priorities is The state of Washington has something called the CHIP program, Connecting Housing Infrastructure Program, which our utilities have been really beneficial. We've had a couple projects in Tacoma where they have applied for dollars from the CHIP program, we've been awarded them, and those dollars could be used directly for paying for infrastructure. So it's straight across. One of the things I did here was electrical infrastructure should be included in that too, as an allowable expense. And the second one was allowing public works, rights of way, ADA, street improvements to be a part of the SHIP program. So right now it's specifically for sewer, stormwater, water infrastructure. We're trying to expand to more and put more money into it. So that's something I'll be trying to add to our legislative agenda. The electrical support one is an interesting one. I have to say, to be honest with my utility folks here, we have a bunch of utility-owned investor utilities that people are not excited about maybe paying off their infrastructure costs. So I've said maybe we could just say for initially-owned electric utilities that this could apply. Publicly-owned. Publicly-owned. There you go. We have to think about the term on that one. So that would be a conversation. But that would be kind of landing out of a CHIP program. It's a state-level program. And then the other one was, the other two on this list is, I really would like to improve our LID program. I think if you look at the infrastructures built, if you look at the people who built these big housing developments in the 20s and 30s, they used LIDs to pay for all of that, so they built the infrastructure, they financed through LIDs, homeowners paid it off over time. has helped in lots of places, but could be better. And I think, actually, when I hear developers tell me, like, can't build these four houses, and it costs a lot of money, like, what do we do here? It sounds like, you know, it sounds like a great opportunity for an LID, and you could utilize this to finance, very cheaply, your infrastructure over time. But there's some real improvements to the LID program that need to be made, that I'm hopeful we can work on. And the other question, which is down below, is I do hear from people the question around infrastructure proportionality. So the question of, I get I need to fix the sidewalks in front of my house or the building I just built, but then I have to build them across the street, and then down the street, and then to the next block, and then down the street to the next block. And the question of, at what point has it gone from we're having the building pay for its impacts to the building is now paying for infrastructure conditions . That's a fine dance to draw. But one thing I think we could do is think about what's a framework we could create around that. So it would be back to that transparency. Like, hey, you're building, here's how we do this. So that's, those are the five. Ooh, I went a lot longer than I thought I was going to. Christina, it's hard doing all this stuff. The, you know, and I just say a couple things I'm really interested in working on personally, and probably going to bring a bid-bot ask, because this will not be part of this budget, because it has costs, is the property tax exemption for ADUs, DADUs, for low-income households. I think it would be a great opportunity for us to partner with property owners to help us build some more affordable housing at a lower price point. And then also, really want to work on the LID program going ahead. And actually, Christine was part of it. There was a group. There was a group of behavioral scientists that were pitching to help government agencies better design processes to make it more likely for people to finish them. So we applied to have them help us with our LED process, we're not chosen as the project. I would like to say we took second in the jizzing, and they said they would like all of us later about that too. But just having her come in and talk through about how can we make the LED process smoother and get it quickly from people signing off, getting it built, and then getting it closed out, which I know is an issue for finance. Okay, with that, That is what I've got here. I would just say this is meant as a draft and more of a menu, and kind of you can think about this as my report on what can we do to speed housing in Tacoma. I'm open for questions from council members, and Vice-Chairperson, I'll let you take this one on, so you can let you run the show for a bit.

Thank you, Vice Chair, and thank you so much, Chair, for your follow-up on this. I know that you've been talking with associated ministries about the faith-based organization part, working with them. I'm really interested in what we can do there as far as when we start talking about affordable housing, you said it was 30%. Your definition was 30%. Am I right?

Yep.

Does affordable housing 30% AMI always mean public or does it mean private as well? That is one question. And so then based on that, I kind of get into that whole issue that you brought up about sort of who's on the oversight of affordable. So if we're saying it's a 30%, you kind of started talking about that, but how do we make sure those stay affordable? And then I guess that that's, when we have a program right now that we do, but with that, how would that continue to take place? I mean, if we're, because I really want to see 30%, for me that's low-income housing, and if it was low-income, through nonprofit that they would meet some of the definitions of not having to worry about some of the things that have been passed as far as controls over rental housing. So I want to say that's important to me that we have a better conversation about that because I think that's really important. And then the other thing I really appreciate you bringing up the information about the housing trust fund. It would be really great if we could be peers on bringing that forward this time during the legislation, the legislature, when they're talking. I thought it was funny you brought up the audits of the owned property because that's something that her former council member had brought up as a big deal, and she wanted to have it happen every year. If you have it here, I think she should get just, let me give former council member the And then I love the idea of transforming low-use roads into housing. That's such a great idea. So you've really been thoughtful about this, and I think for people who are looking for us to be development-forward, this fits a lot of that. I really do think that tackling how we can protect rent so that it actually gets paid. And that certainty is really important as a city. I don't want to be, Atlanta has one of the highest rates of evictions in the nation. I don't want to be that. I want to find a way to protect people from eviction, but rent gets paid. So those are, I think they can work. That can work. I just, I'm looking forward to what happens next year as we move forward with this.

Yeah. Thank you, and the Council on Renewables definitely blew out my mind as we went through so many things. So, to the Council on Renewables' point, the 30%, you know, the basic, the term we use for affordable housing, from my understanding, is 30% of your, you should spend over 30% of your income on your housing, right? So, whatever you make determines, like, so if you're making, so a good example, like today, I was reading about the Social Housing Project in Seattle, and for the lowest income folks, their rent would be somewhere between $570 a month, which if you do that by 30%, it makes something like $20,000 a year. So the 30% is kind of, you can't spend more than that on your rent. So based on your income, it can go up or down. But to your point, some of that can be private, right? And the way we do that in the private marketplace is often through vouchers, the THA, right?

So part of it is can we find more private folks that want to do this and take vouchers to support that?

Your point about how do we manage this, so the MFTE program requires us every year, the staff, to check and make sure that the rents, the people that are renting these units, it does, their incomes don't exceed that number. We did allow, the last MFTE update, for people to earn a little bit more than that, over to a certain point, to allow people to kind of grow into the unit. They increase their income, they don't have to make any choices. But we manage that for the city. For these other folks, a lot of it is mission-driven. They either have long-term agreements with low-income tax credit holder companies, or low-income tax credit. There's requirements that they have to keep their rents at a certain level, or if they're covenants with folks, whoever their loan lenders are. They manage that on their own. There's two parts to it. But I think that's the ongoing conversation of not only how we create these units, but how do we make sure people slide into them. And I think that's a bigger challenge. I mean, there was an article in the New York Times, not what I read, but there was an article in the New York Times about the city of Denver and a bunch of these LIGTECH properties having vacancies because they actually they're allowed to charge a certain amount, which is affordable, but then the population that needs the housing is below that. So how do we kind of better match the numbers is a good conversation we're gonna have going forward.

I mean, I think Seattle is having, that's where they're sort of having that issue right now. They couldn't get their low income rent. low income units rented because the rate, the market rate was a certain level and so. Gave them more choices, but maybe people aren't actually renting out the units that are the market rate, so they'll stay vacant longer. So, yeah.

Actually, the whole housing, there's a lot of housing financial complications with that.

Right, thank you so much for explaining your answers.

But I will keep a track of

Really good, and that is really holistic. You know, I think I come back to, you know, if you're looking for pointers, I would actually put your last paragraph forward. Okay. Because this is the one that says we can't lose focus on advancing housing as a cornerstone for stability, because without sufficient housing, we would stop attempting to address far more challenging and costly downstream impacts, right? And then there's some more. And I would say it's not that we will, we already are. Because we are... So to that end, I think a theme in my head Well, yeah, because, I mean, we're part of NLC, we're part of AWC, this is not a Tacoma problem, this is a national problem. And quite frankly, if we are better at solving that problem, we will get the benefits of the kind of economic boom we need to solve all our problems, right? If anyone in this country can figure out how to solve housing in their local jurisdiction, they would. That's just it, right? Because everyone is looking in this, in this terms. I guess a theme in my head that I like that's in here that maybe could, you know, if you're willing to kind of make it a little more kind of visible is the idea of kind of iterating on what we've already done. I think you started that in the beginning. Yeah. But maybe that's an objective on we should continue to build on what we've done. So some of the questions are on. that I've talked to you about and that I am considering bringing is this idea of, okay, we've done Home in Tacoma, we've done a pilot program. Can we get a goal internally? And that internal goal would be, can we reduce the amount of time that it takes the middle 80% of all permits to go from the process end to end by 10% line up? As a way to iterate on our operations of, can we improve it? And that, I think, there should be a theme about iterating on our policy updates. We've done that in Home of Tacoma, right? We put in a three-year clock on looking at it. That was actually one of the suggestions you had brought up more than once that I agreed with, this idea of continuing to iterate on existing policy and not resting on the laurels that we've solved everything. Because a lot of what's in here is based on that. I also want to point out, because we've talked to a lot of developers, there is this idea, and I think it's really important, that empowering more builders idea. Because one of the frustrations, or maybe not a frustration, is when you're creating new processes and new policies, sometimes you want to get the new pioneers to want to come here and build. And this doesn't need to go in the report, but the idea that we've had conversations with developers who've built the same way for 30, 40, 50 years. And we try to say, but you can do this, but I just want to do what I've done for 30, 40, 50 years. And sometimes I've literally screamed at someone, I'm like, well, your solution didn't work for 30, 40, 50 years. So why are you doing the same solution? So the question being in this a world of empowering builders, I like this idea of talking about residents and what they can do, but also attracting people that are willing to be innovative, being willing to understand the flexibility that we've started adding and taking advantage of that here in Tacoma. I think that would help us immensely in this world of iterating I'm thinking about this world of iterating because when we've talked to developers who've done the same exact thing and they just want us to make that same exact thing easier to build, that is not good iteration on our existing policy. What I want is someone who wants to come in and build a sixplex in a UR2 or an eightplex in a UR2 because they want to do two units as affordable and tell me what your barriers are. So hidden in that long diatribe was also the idea of being intentional about also asking in terms of permitting and everything that happens in there in some ways, but maybe being more intentional about could you, you know, what was your zone? What was the maximum unit count you could have done if it's housing? Why didn't you go to the maximum unit count to kind of understand was there a policy barrier that came in? Like you're in a UR2, you're allowed to do you know, six by right, why are you doing four? Right, because we've heard of that, or why are you doing two? Why aren't you doing eight and taking advantage of our affordable housing bonus? So maybe a theme around kind of collecting this information so we can better inform future policies with real world, like, actual collected data. to be what i wrote i love the idea of lids i've talked to linda many times like couldn't an lid solve this problem right and it's like council members lid aren't what you think it is it's this big you know basically arcade thing so i would love to work with you on trying to understand how we can make this kind of construct of an LID maybe more beneficial. The idea of a property tax exemption for TADs and ADUs for certain things would be amazing. You know, when I think about housing and I think about housing costs, I think I have to keep reminding people and because I realize there's so few people who have people who've been able to to purchase a home that one of the best ways of freezing your monthly cost for your home is to get a standard 30 year fixed mortgage, right? Your principal and your interest pay the same, you know, Right? So, and as I say, if your insurance has gone up, that it's increased your housing cost by 20%, you should probably move because you're probably in the middle of like, you know, a place where your house is going to get fired, you know, get a wildfire or flooded or earthquake or something. That's what insurance kind of figures out, right, for you. And homeownership being so low over here has, So I appreciate you calling that out as well. And on that talk about rental arrears and non-collection. and was one of those innovative housing builders who came in and took a lot of kind of derelict motels and basically District 5 and 4. He has a couple right on our border over there. I had a really nice conversation. He looked it up for me. He says he has about 600 units in Tacoma. And he's like, let me do an apples to apples because the 0% nonpayment at Bellevue probably isn't right. 5% non-payment in Fife and Olympia, which were the closest apples to apples. Tacoma was just slightly north of 10%. They can literally give you a time at which that happened. I'll let you guess when that was, right? Because they had you We did not need to have government funding into projects for a long time because people didn't pay. There was some ability to get money back from it. When you ask the question, I could build in potentially five-year liquid or pay all of it and have a 1.5% to 2% nonpayment rate, or I could build in Tacoma and it's 10% nonpayment rate. all the other things that we're trying to do. So that is something important to take into account.

We're an amazing city. Is it worth 10%?

And then the last thing is I do want to point out that modern construction is a climate solution. Adding more than one unit to an existing lot that probably had a 1940s, 1920s craftsman, like my house, 1923, on a per square foot basis, the amount of energy required to heat and cool it is immensely less. It's an order of magnitude less on a per square foot basis. When you compare old buildings that haven't gotten much upgrades, and so when you add more units and use our, you know, building code that has the highest requirements around that. But there's a reason why we are, because we want to ensure that people who live there are spending as little as possible eating and cooking their own. And I think we forget that part of the equation, that there's a way in which we can increase housing, get people a house, and have them be able to, on a long-term basis, spend less money on the cost of keeping that housing up. And quite frankly, like I said, modern housing today, compared to the average age of a home that is being replaced, there's an order of magnitude decrease and a better climate solution.

So those are kind of my thoughts.

Thank you.

Yeah? This is a quick comment. I appreciate the feedback, including the closing paragraph at the beginning. I think that's pretty good. And I also like the iterating policy. I know that there's something we're trying to be clear about. It's like this is not a brand name. This has been going on for a while. But I think one thing that I have I think people think government moves too slow to iterate, but I don't agree with that point, and I think by making us do it, I think we can actually do a lot more. I think what folks want is they want nothing to ever change. If they like it, stay the same way forever. If they don't like it, change it tomorrow. And really the key is we've got to have a fine balance there. And I think iterating on policies and making changes, improvement, collecting data, is something I'd really like us to do a lot more of. What was the other point? I think that's a good theme. We'll have that a little bit more as we go through this.

I have one comment to kind of contribute for the streamlining permitting and like going 10% faster. That is absolutely nothing new going back decades. There's been developers and permit people at the city. And one of the key things that I've asked both sides because I've never really been on either one of them is how do you know it was a good permit review you know and there's not a common answer to that so the developers fast and permit reviewers comprehensive and they didn't let anything go so I think some effort into getting that yeah that definition of what a what you know what is a permit review have to be So that both sides have a similar expectation of how that goes because I know lots of people that have been in the permit review years and years, a long time ago. They would get their results changed as developers came in, and then they got more entrenched. I mean, it created this really adversarial approach, which I'm not saying exists today, but I don't know that we've ever really cracked the nut of what is a good permit review. everyone can agree on. And if we got that, I think we would be moving down the road.

I agree with you. The resolution I'm considering right now is pretty high level. It's trying to throw out the slowest 10%, the fastest 10%, look at the middle. It's supposed to be a bread and butter. And the question really is being asked is, what are the things we could potentially do to speed it up, right? Across not just the permitting department, but every department that touches it. And maybe some of the solutions and we put in there is maybe we need to have better kind of upfront instructions for developers. Maybe we want, you know, uh, more kind of those, you know, cheat sheets where you can learn, you know, maybe those are things that could help, right. Because we can maybe, uh, collect information on, on a certain time period and what some commonalities have been and really kind of think about what potential solution exists to speed it up faster while still retaining that requirement that it be comprehensive because, and it goes to, um, and defining that and, and defining what that is because, you know, it goes to point, you know, back in the 20, We could have built anything anywhere in any way we wanted to, right? I mean, there's a reason why we had permits is we learned that that wasn't actually the best way to build things. And for every single person that says, I have a home built back then that's still standing today. I'm like, you're the lucky one. That's not survivorship bias, right? Because all the other ones fell apart. And there were a lot that fell apart, right? And we want to make sure these homes don't fall apart.

I think that's a really good point. Because I think one of the things I've heard, the person coming in for a permit always wants to move faster. The city, rightfully so, has it. And I hear this, mitigating risk. Because once you issue a billing report, we're on the hook. And so that balance of, do we mitigate for every single risk that could possibly ever come about? Or is there a level? So what is a good review period? That's a great question to think about. There's a, I don't know what it is, but I know that there's a, it's a diminishing return at some point, right? At some point, when the black swan happens, you can't, it's gonna happen, right? And so like, do we, what level do we need to work on to that level? To what level do we need to mitigate the risk to the point? And I think, what is good for it? That's a good question.

Because I think, you know,

Just from my observation, a developer's good permit review is like, I showed up, I gave the permit, you gave it back to me, and I went and built. From our side, it's like, well, a good permit review is you turn in this garbage permit application, and I fixed all these problems, and then you fix them, and then you built something that was safe for people to live in. And I can see the tension there.

Yeah, and that's actually kind of one of the points that I was thinking about is because it's like, it's not the permitting department job to fix your project. You should be submitting good plans in the first place. And I think part of that is education. And I think sometimes the reason why folks get frustrated because of all the reviews and redlining is because it didn't give us the best product because you went with the lowest bidder when it came to uh developing your project so you know who's to blame on that it ends up you cost them more in the long run um you know i've seen you know i have the benefit of a civil engineer wife that does a lot of work and i've seen some pretty interesting uh permanent things that she's had to wait through and fix and so anyways

um did you have anything you wanted to add yeah just a couple things so i really appreciate council member sadalga's comment about flexibility and creativity and iterating that part of that goes back to a number of years ago i was looking at 3d printing of housing and that is going up in other places and it is fast and it creates really solid housing and we don't have any of it here so i keep wondering is is there a way to bring other ways of building here that are cost-effective and good. The other thought I had is I know our building code is really good, and I don't know, does that kind of require putting in heat pumps? So the reason why I'm thinking about this is we have, you know, the utility offers rebates around heat pumps to low-income, right? And so I wonder, is there a way to sort of preload that if it is going to be for low-income, and we're not doing this 30%, but we're looking at 80%? AMI or something like that. We're setting units aside. Is there some way to... That's just a thought process. Can we take advantage of the database?

Yeah. That's a good question. I know the state is working on all of this stuff around adding the ability to condition spaces, because we didn't have that requirement in the state. They had just the latest billing code requirements, so that might be a really good thing to think about on our state agenda.

This is the interesting part for the utility side, which is probably some of the broader conversation, which is there's prohibitions to fuel switching. We can't go in and make people switch. With new construction, we could definitely go in and help support that. TADUs, and like we say, we'll give this tax exemption if you're writing to a former person, like a low-income person, then there could be an opportunity where we could partner with you all and say, and if you do that, then these are all just rebates that are available if you want to do a heat pump or some other pieces that are there. I think the more, you're right, I think the more you preload some of that stuff, because if somebody doesn't know any better, but if you're like, well, hey, when you do this, here's all the things that are available to you, it's going to be great.

Yeah.

And I think your point about innovative building materials would be good. I guess it comes from a songiest point. I would love us to be a place where we like to encourage people to come and try innovative things and like to think about it. The flip side of that is I've got email from someone. I don't know if anybody's driven up Orchard Street lately or by Silas High School. There's a house and then behind it is four really large town homes that are going in right behind it. And so neighbors are like, whoa, what is this? It's like, well, it does look strange. And I'm like, part of me is like, wow. But that is, I met the developer, that is four family size town home units, so three bedroom, three bath, with a garage behind this house. And he worked the code, he saved the tree in the front yard, and he did all the bonus structures and everything, and pulled it off, and now that's what's going in. So there's a, it's cool, it's stark, but we have to be okay with that, right? Because I think in the past, you know, The freak out is like, oh my God, that's horrible. How did that happen? And then the thing just went to that.

And the only other thing that I had around this parking stuff, does this automatically push more parking out onto the roads, which is a real problem.

Yeah, I mean, I think that is one of the ongoing challenges is that, is the part right there. One thing that we try to, I guess, This project this guy's building right there, he has garages on all the projects because he's like, somebody's going to want a place to park. And so it's really more about kind of letting the developer decide on that one. I would imagine that we find in places where it's parking constrained already, like the city district, where there's not places to park on the street, they kind of have to build the parking because it's like, there's just you've got to have something for these people to park in. They're going to have cars.

There's also the issue, if we want our To convert to EVs. Yes. You need them to be able to charge. Yes. Charging on the road is... Yeah. Yeah.

It can be a challenge, as you all know. Yeah. Yeah. I think that's another consideration.

Great. You're fine. Thank you so much for the report. It's really comprehensive. It's a lot of things I've been also thinking about, so I appreciate being able to lay it out in a really succinct manner. I really do appreciate that. the idea that we can improve upon processes that already exist, but then also look for opportunities to either expand policies or, and particularly with the state, I'd love to see like a list, just a list, general list of all the things that we could probably move the state on that would be beneficial. And I also, and you brought up the DADU carve out for King County that happened. I suspect that there's more carve outs for housing that King County gets that we don't. And I think I've had conversations with them I'd love to know more about what those are. And sometimes you just don't know it until someone from King County comes out and says, hey, how come you don't have this incentive? Well, it's because it's carved out for King County. There's a lot of those. And so I'd like to know what those are as well. Or expand it so that there's some equity in the incentive programs and things of that nature. And so that's something I think about a lot as well. There's a lot of carve-outs for King County for some reason. when it comes to a lot of different things. Additionally, something I kind of didn't quite see here, but it kind of gets at the overall housing need is kind of like anything around ownership specifically, you know, generational wealth building and opportunities for subdivisions. You know, I get a lot of subdivisions. I know we've done some work around that already with home in Tacoma, but is there a way to incentivize that more? Is there barriers to doing that? And in particular, I appreciate some of the MFTE projects more recently over in the South End where it's... ownership NFTs, so the benefits actually going to the people who are purchasing that property. So that's really helpful. I'd love to see more of that. So I'm trying not to go through it all, but I do hear often that a lot of the constraints that developers have had, aside from permitting, of course, because that's always a pain point, is capital funds. And especially given the current interest rate and the market the way it is right now, it's very likely that we might see an interest rate hike just based on all the economic indicators that I'm seeing. I don't think it gets better, at least in the near term. And so what are we doing to try and incentivize more housing, given all the constraints? And that's where the subsidies and things of that nature could potentially support things around housing. And particularly, I think about the public benefit that offsite improvements and other things are doing for our community. And how are we able to reconcile that with a project in the capital stack that they're putting together? And you had mentioned it earlier, kind of looking at Is there some subsidies that we could do? I really like things like revolving loan funds. I think that they're a really good way to have a self-sustaining thing. So it's not just the state or the city just dumping money into direct subsidies for these different developments, knowing that there is some public benefit to off-site improvements and utility hookups and all these other things. Maybe there's a way for us to do a very low or no interest loan for those kind of benefits. that revolves back into circulating within that space. And I don't know if state law allows us to do something like that or if that's something that we could work with the state to develop. But I think there may be a way to work with financial institutions to do some sort of infrastructure level support that the state or the city can subsidize and it revolves back into a fund that, you know, we do an initial funding and it grows and supports But that would help reduce some of that capital stack burden because they might have to spend market rate interest for building everything, but that this particular portion may help something pencil out that may not have penciled out based on the offsite improvements, utility connections, and other public infrastructure that goes in with those developments. So I think about that as well. And so I don't know how the CHIP program might be able to support something like that, or if it's like maybe something in conjunction with the CHIP program. And then that dovetails into the electrical infrastructure support, because I see off-site improvements and utility connections, system development, all these things are really a part of that public support realm. Because at the end of the day, it's also supporting the residents that are going to end up living in these locations. I think there's a lot of opportunity for process-approved LIDs. I think I'm going to just stop talking. We can sit one-on-one and go through line by line because there's a lot of really good stuff in here. Go ahead.

Great, great comments. I think the capital for offset income and cost setting, I've been thinking about this since I was in finance. Everybody knows better than me, but when I have a project, I have to cash flow it out. It's like, here's how much money it's going to make. And then I have to borrow at a certain rate. It's just a math problem. And so one of the keys that I've been talking about locally, or here with our city manager, and then I think with CHIP, we're seeing other states do this, is the revolving loan fund. low interest, and just enough to basically capture inflation, right? Low interest that can bridge the construction costs. A lot of these projects, what they do is they get a construction loan, and then once it's done, they start occupying the building, then they convert to permanent financing, and it pays off the construction loan. So some cities and states are looking at bridge loans for construction, where they loan you the money, you get built, it's lower interest, so you can buy down the cost to build, lowers your financing costs when you go to permit financing in the city. Your state gets the money back much faster because as soon as it's like permit financing, it's still coming back in. So I think there's ways to look at that. I'd really like to look more at that. The chip is great. You know, one of the challenges we have is our system is very much like we give $10 million to this one project and then we never see it again, right? It just goes. Would it be better if we had a product where it's like, well, we'll give you $10 million at a very low interest rate and then you finance it and then it comes back to us or at least part of it. So this is something I definitely, we should chat more about what that could look like. I think there's ways we could do it both here at the local level on a small scale and also bigger on the state level. I think ownership, there's lots of places we can plug that in, so I'd love to talk about that. Just to kind of close out, yes, I would love to chat with you all more about this again. And the thing I want to reiterate is, and some of you all know this about me, the person who's like, you know, we do lots of things, but I want to package it in a single place so it's easier to help them understand. So this is more my attempt at packaging everything a lot of stuff we already do. And what I hope for this is I definitely am not going to do all of this. So if you see something in here you like, please feel free to take it. I mean, I take some of these pieces on, right? I just want to put in one place, here's what I think we could do within the realm of possibilities, and then council members could pick and choose to do what they want off of it. Christina reminded me, and this is just, you can look this up, but I might, I don't have her on my, Karen Bass in LA proposed this new permitting form where if your project is 100% affordable, how fast do you get your permits? Like 60 days? 60 days. So guaranteed, or 30 days, I haven't looked it up. But basically, if your project comes out 100% affordable, you are guaranteed to be permanent within 60 days. What they found in LA, which is kind of interesting, is a bunch of private capital started dumped into this project because they know they can get it done faster. So it's opened up this spigot of money, and people are like, oh, well, if I can get this 100% affordable product done in 36 days and get a permit, like, let's do it. And so it's actually helped open up some private capital investment. Yes?

I'm sorry, can I ask a follow-up question?

Yeah.

So that just makes it affordable because I don't have to borrow the money for long.

It helps buy down the cost so that they come in and they're like, I can make this work faster. So, and it would benefit people like the THA folks or the people who are doing the affordable, like, they can do it faster. and also you open up crack capital. It's something that's kind of a radical re-examination for me, and that might be something where we just, like, I think, I like, because we're talking in his resolution about all permits and how we speed them up, but we could also slice the onion in such a way, like, hey, this one little tranche here, if anybody comes in, 100% affordable.

We could do it with faith-based organizations.

We could do it with any, we could do it, yeah, we'd have to talk to the logistics on it. I feel like I'm in the... I don't know if you've ever used an iterative example. I don't know if you've ever heard the conversation around Jeff Bezos, the one click for Amazon, where he kept saying, I want one click. Okay, Jeff, it's going to take three clicks to buy something. Nope, I want one. And then they got him to, we get two. And he's like, nope, that's not good enough. I want one. And then he finally got to one click. But I think it's going to take us having a conversation around, well, we'd really like to do this. Well, here are all the issues that are in it. Okay, well, we still really want to do it. And so I think if we can kind of bring a focus on a specific I just want to put that out as a possibility, like the power of this, and LA is a different example, but if we can really get some of this stuff aligned and doing it faster, we can actually, we can sell it, and then I think we can go to innovative people and say, hey, come and build this stuff. We'd love to have you. Okay? So I'm taking feedback from you all. I will talk to you all later. Is there a question you have to ask me? No? And I'm going to kind of clue this up, and then I'll talk to each one of you individually whether or not you think this is good for a study session or bring it back to the World Council to talk about, but this is just kind of an ongoing conversation, and I thank you so much, and thank you to the audience here, and thank you to our burn members, this is great. So, oh, there we are. I'm on edge, right?

So we're going to move on to topics for upcoming meetings. The next meeting is October 6th, and we will have our friends from TP here to talk about fee updates, and Jeff Leaders will be here to talk about franchise agreement. Then October 20th, we have a proposal for fiscal impact statements coming on initiatives that go to the ballot. Interesting stuff coming up.

I'll talk to Pastor Rob about that later. I have some questions about that. I'd like some questions about that. So, okay. With that, seeing no other items of interest, or any other items of interest. Seeing none, I'll move to adjourn.

Second.

Let's move to second. All those in favor say the final saying aye. Aye. All those opposed? Motion to stop. We say adjourn. Thank you.