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MRSC has joined with Phil Olbrechts, Attorney, Ogden Murphy Wallace, Mark Hinshaw, Director of Urban Design, LMN Architects, Pat Dugan, Dugan Consulting Services, and Arthur Sullivan, Program Manager of ARCH (A Regional Coalition for Housing), to bring you the "Planning Advisor" article series on planning and growth management issue affecting Washington Local Governments. The "Planning Advisor" will feature a new article each month with timely information and advice you can use.*
Recent Trends in State Legislation Affecting Affordable Housing
February 2008
By Arthur Sullivan
Program Manager
ARCH
(A Regional Coalition for Housing)
With the enactment of the State Growth Management Act in the early 1990’s, the Washington Legislature took the initial steps toward local communities playing a more explicit role in addressing affordable housing needs in their communities. In the 1990’s and the early part of the 2000’s the legislature’s main effort around affordable housing was through the growth of the State’s Housing Trust Fund. Local efforts seemed to fall primarily into programs that offered direct financial assistance for the construction of low income housing (e.g. Seattle Housing Levy, Spokane Multifamily Housing Program, and the ARCH Housing Trust Fund) or that encouraged more diverse forms of housing through the regulatory process (e.g. housing in mixed use zones, smaller lot single family housing, and cottage housing.) However, while there are many examples of growing housing diversity, this hasn’t always resulted in the diversity of housing prices that was anticipated. This apparently hasn’t gone unnoticed by the state legislature which, in the last two years, has passed several new laws intended to clarify and expand the authority of local jurisdictions to encourage the development of more moderately priced ‘affordable housing.’
SHB 2984 – Affordable Housing Incentives
In 2006, SHB 2984 was passed adding Chapter 36.70A.540 to the RCWs. The bill’s introduction states:
The legislature finds that as new market-rate housing developments are constructed and housing costs rise, there is a significant and growing number of low-income households that cannot afford market-rate housing in Washington State. The legislature finds that assistance to low-income households that cannot afford market-rate housing requires a broad variety of tools to address this serious, statewide problem.
SHB 2984 clarifies for jurisdictions the authority and the parameters for local affordable housing incentives programs. It removes many of the barriers and legal hesitancy (e.g. those surrounding RCW 82.02.020) that have kept some cities from creating affordable housing incentive programs.
SHB 2984 “encourages cities, towns and counties to enact or expand affordable housing incentive programs, including density bonuses and other incentives.” Thus, this bill clearly authorizes communities to offer land use incentives in exchange for providing affordable housing. It even provides that when jurisdictions take action to increase residential development capacity:
… through zoning changes, bonus densities, height and bulk increases, parking reductions, or other regulatory changes or other incentives … the jurisdiction may establish a minimum amount of affordable housing that must be provided by all residential developments being built under the revised regulations.
While the bill leaves significant discretion to jurisdictions in establishing local programs, it does include some parameters for local programs. Section 2 (RCW 36.70A.540(2)), establishes maximum income affordability levels; requires that affordable units must be of a similar tenure and unit mix (bedroom size) as market rate units; and provides that affordability is to be maintained for 50 years. The legislation also clarifies that, while on-site provision of affordable units is encouraged, jurisdictions can establish mechanisms to allow for off-site provisions (e.g. in-lieu fees).
SHB 1910 – Multi-Family Tax Abatement Program
Another bill, passed in the 2007 legislative session, was SHB 1910. Prior to SHB 1910, Chapter 84.14 RCW allowed cities with populations greater than 30,000, to exempt property taxes for 10 years on the improvement value of new or significantly rehabilitated housing in locally established mixed use urban centers. This bill amended Chapter 84.14 RCW to allow all cities with populations greater than 15,000 and cities over 5,000 in King, Pierce, Snohomish, Clark, Kitsap, and Thurston counties, to create local programs. However, this new legislation places additional emphasis on the creation of affordable units by adding a provision that decreases the term of the exemption from 10 to 8 years if there is no explicit affordability, while allowing up to a 12-year exemption for projects that commit to renting or selling at least 20 percent of the multifamily housing units as affordable housing units to low and moderate-income households (RCW 84.14.020(1)(a)).
The Beginning of a New Trend?
Are these isolated incidents or the beginning of a new trend on the part of the state legislatrue toward taking a more direct role in influencing local affordable housing efforts? Representative Springer (45th Legislative District, Vice Chair, House Housing Committee) states, "The legislature clearly realizes there is a housing crisis facing middle income families, as well as low income families. We must be bold and creative if we are to find solutions that actually work."
As this article was written, more bills are being considered by the legislature, ranging from sales or real estate excise tax (REET) exemptions for affordable housing, simplifying the process for cities to waive impact fees for affordable housing, to incentives for employer-assisted housing. By their actions, our state legislators apparently are beckoning communities to be more proactive in broadening the tools they use to create affordable housing, including tools to integrate affordable housing within market rate housing produced by the private sector.
Upcoming articles will profile in more detail some local efforts springing out of this enabling legislation.
Mark Hinshaw has over 32 years experience as an architect, city planner, and urban designer. He has provided urban design and community planning services to local governments, prepared master plans for public facilities, developed design guidelines and streetscape improvements for public agencies, and created comprehensive commercial district plans.
Pat Dugan has a unique combination of experience in both planning and public finance, spanning 35 years. As a planner, he has been a planning director in two cities (Auburn and Burien), and two regional planning agencies in Oregon and Washington; and was a planning manager in Goleta, California. In public finance, Pat has served as the chief financial officer in four public agencies including the Cities of Auburn and Lynnwood, and the Snohomish County Public Works Department. He has written extensively on financing capital facility programs and on public finance for planners. Pat now offers planning and public finance consulting services and in his own firm, Dugan Consulting Services in Everett and can be reached at consult.dugan@verizon.net.
Phil Olbrechts is a member (similar to partner) and elected member of the board of directors of Ogden, Murphy, Wallace, LLC. Phil focuses his practice on land use law and currently represents seven municipalities as either City Attorney or Hearing Examiner. He has taught over a dozen credits of land use law at the University of Washington, has taught numerous land use continuing legal education courses and has made over 200 land use presentations to elected and appointed officials throughout Washington State. Phil has served on the Seattle Planning Commission and in the past served as the Planning Director for two municipalities.
Arthur Sullivan is the Program Manager of ARCH (A Regional Coalition for Housing). ARCH is a coalition of 16 public jurisdictions located in East King County. Its purpose is to facilitate efforts of public jurisdictions to create a full range of housing, with an emphasis on affordable housing. In 2004 ARCH was the winner of the inaugural Ash Institute / Fannie Mae Foundation Innovations in American Government Award in Affordable Housing. Previously Arthur was a Senior Manager at BRIDGE Housing and planner for Environmental Impact Planning. He holds a B.A. in Planning from the University of Washington, and a Master of Planning from UC, Berkeley.
*The Articles appearing in the "Planning Advisor" column represent the opinions of the authors and do not necessarily reflect those of the Municipal Research & Services Center.