Planning commission debates middle‑housing allowance and expansion of inclusionary zoning; staff to analyze incentives and impacts

City of Bothell staff briefed the Planning Commission on Sept. 17 about proposed middle‑housing code changes and amendments that would expand the city’s inclusionary housing requirements.

Staff described two related proposals: a) a middle‑housing zoning adjustment to make allowances uniform across qualifying residential zones by allowing up to six units on eligible lots (the change mirrors the federal/state tier requirements staff referenced), and b) an expansion of mandatory inclusionary zoning from the current roughly 4% of residentially zoned acreage to a larger footprint (staff said expanding mandatory requirements to downtown, Canyon Park and RM‑3/RM‑4 zones would bring the coverage to about 32% of residentially zoned land).

Planner Ray Sosa and housing staff explained those changes in the context of recent state housing‑related legislation and Bothell’s HB‑driven housing targets. Staff emphasized the city must be intentional to meet state targets that require a substantial share of new housing be affordable at or below 80% area median income (AMI). Staff gave Eastside AMI examples used in outreach: roughly $82,000 for a single-person household and $106,000 for a three-person household at 80% AMI (figures presented by staff for regional context).

To make required affordability feasible for developers, staff proposed a package of incentives divided into two phases: near‑term incentives staff hopes to adopt by year‑end (permit expediting, fee reductions, height increases, impact‑fee adjustments and streamlined processing) and a second‑phase package to be completed next year that could include MFTE (multifamily tax exemption) revisions and other financial tools. Staff noted MFTE would remain voluntary where used, while inclusionary requirements would be mandatory in zones chosen for expansion.

Staff told the commission that deed‑restricted units produced under these programs would be administered regionally by ARCH (the Eastside housing referral and administration collaborative) and that ARCH and the city’s human services staff would help the city reach and place eligible households.

Commissioners gave mixed reactions. Several commissioners welcomed stronger, predictable middle‑housing allowances and expanded affordable‑housing tools but emphasized realism about developer economics: - Commissioner Westerbeck and others urged incentives be stackable or otherwise sufficient so developers can deliver affordable units without abandoning projects for neighboring jurisdictions. - Commissioner Gustafson and others warned mandatory inclusionary requirements at very low thresholds (for example, applying to 5–6‑unit developments) may deter small projects and suggested setting a higher unit threshold for mandatory inclusionary requirements or relying on fee alternatives that the city could deploy. - Commissioners asked staff for data: current counts of existing dedicated affordable units, vacancy rates for those units, the size mix that would meet family needs, and the likely revenue impacts of fee waivers or reductions.

Staff reported next steps: continued outreach and technical work with developers and a consultant to model pro forma impacts and incentive sizing; a near‑term package of incentives aimed for adoption by year‑end; and a broader housing action‑plan engagement process next year to address unit mix, outreach to underrepresented groups, and implementation details. No formal vote was taken at the Sept. 17 meeting.