Council hears proposal for affordable‑housing fee in lieu; consultants recommend $34.45 per square foot

Sammamish City staff and consultants presented proposed implementation guidance for the city’s new inclusionary housing requirement at the Jan. 14 study session, recommending an in‑lieu fee of $34.45 per square foot calculated from a developer feasibility model.

What was presented: Department of Community Development staff, with consultant support from ARCH and BAE/Kidder Matthews, explained how the in‑lieu fee was developed. The model compares an estimated market sales price for a unit to an affordable price (80% of area median income) and converts the difference into a fee per square foot. The city’s new code (SMC 20.21.10) requires 10% of new units to be affordable at 80% AMI or to pay an in‑lieu fee in certain fractional cases; staff cited the state HB 1110 (middle‑housing provisions) as the enabling legislative context.

Consultant review and risks: Kidder Matthews conducted a review of ARCH’s model and found the methodology sound, noting the model relies on market and cost inputs that can change quickly. The consultants recommended periodic review of the fee so it remains responsive to market shifts and noted that small changes in costs can push a project from feasible to infeasible.

Council discussion: Council members asked whether a market factor should be applied to allow rapid adjustment if local construction costs change; staff recommended adopting the $34.45 fee and establishing a periodic update schedule (staff suggested an initial review after two years, with flexibility). Councilmembers also discussed who should hold and manage fee revenues. Two primary options were presented: - City‑held fund: the city would manage revenues and award funds per council policy. - ARCH/Bellevue‑held fund: ARCH operates a regional housing trust fund and could accept and manage the city’s revenue; ARCH staff bring dedicated capacity to connect funds to projects.

Council feedback and preferences: Several councilmembers expressed a preference for ARCH to hold and manage the funds, at least initially, citing ARCH’s staff capacity and the city’s lack of dedicated affordable‑housing personnel. Councilmembers also expressed a desire to prioritize projects within Sammamish when possible, but to allow funds to support regional projects if the local pipeline is too small; several suggested a policy that would allow funds to accrue locally for a fixed period (for example, a rolling multi‑year window) and to be used regionally if not deployed locally within that timeframe.

Next steps and schedule: Staff will take council feedback and prepare a recommendation to return to council on Feb. 18 and a requested set of resolutions on March 18: one to add the affordable housing fee to the city fee schedule and one to adopt policies for the affordable housing fund (holding, eligible uses, and cadence for review).

Ending: Council asked staff to return with written policy options describing a fund‑holding approach, proposed review intervals for the fee, and draft eligibility criteria for how funds may be invested locally or regionally.