The Port Orchard Land Use Committee reviewed a draft multifamily tax-exemption program and agreed to send a refined proposal to a full-council work study in September. The committee discussed a single target-area map, layered criteria for 8- and 12-year exemptions and a proposed increase in the affordability requirement for the 12-year exemption from 10% to 25% below HUD fair market rent.

Committee members said the program matters because it is intended to incentivize denser, mixed-use development downtown and in designated centers, and because the city must balance incentives with infrastructure capacity and staffing needs to administer any affordable-housing requirements.

Nick Bond, community development director, presented a first cut of the target-area map based on the citycomprehensive-plan centers and explained the draft ordinancewhich collapses several prior maps into one and layers 12-year requirements on top of the 8-year standard. Bond said the map intentionally excludes McCormick Woods because of existing master plans and agreements and that it currently includes older parts of the city and areas east of Glenwood Road and Highway 16. Bond said the ordinance offers multiple project performance pathways that would make a project eligible for MFTE: mixed-use shopfronts with ground-floor commercial space, buildings of four stories or more, small-lot middle-housing projects of 4 to 12 units, or projects with all parking below grade.

Jim Pecan, principal planner, described the ordinancenoting an 8-year exemption that requires meeting one of those performance options and a 12-year exemption that requires those options plus an affordability commitment. Bond said the draft ups the affordability requirement for 12-year projects to 25% below HUD fair market rent (up from 10% under the prior program) and acknowledged Kitsap Home Buildersmembers had expressed concern that a four-story requirement and the added costs could make projects infeasible.

Committee members probed tradeoffs. Council member Jay Rose Pepe asked whether the program accelerates growth the city cannot support; Bond said map boundaries control where growth is targeted and that the incentive is designed to avoid producing garden-apartment sprawl while encouraging downtown and center redevelopment. Pepe and others asked for clearer estimates of the subsidyhow much tax revenue would shift to support exemptions and how benefits (for example, additional ratepayers reducing utility-rate pressure) compare with infrastructure and service costs. Bond said estimates are possible but net benefits would require a larger fiscal analysis.

Committee members also debated staffing and administrative workload. Bond said Bremerton estimated about 0.1 full-time-equivalent of a senior planner would be devoted to operating an MFTE program; Bond cautioned that the affordable 12-year exemption creates substantially more reporting and monitoring work than an 8-year exemption.

The committee asked staff to refine the map (remove schools and other institutional parcels where appropriate), retain the layered 8/12-year approach and bring the draft to the full council study session in September for broader discussion. No formal vote was recorded; the direction was to advance the item to the council with proposed map refinements.

Proponents and critics may press for adjustments before council action: developers at the meeting asked the city to consider developer economics and the value of ancillary revenue from new development, while committee members pushed for stronger tenant savings if the city grants 12-year exemptions.

Bond said the citywill return with a revised map and the draft ordinance for the September work study; staff will also consider whether to remove institutional parcels from the map and to provide clearer fiscal-shift estimates for council consideration.