Silverdale market study finds strong demand for housing and medical-support uses; multifamily tax exemption could increase feasibility

Kitsap County long-range planning supervisor Colin Poff and consultant Jennifer Cannon of Echo Northwest told the Planning Commission April 15 that the Silverdale Regional Center market study finds strong demand for housing, significant economic opportunity tied to St. Michael Medical Center's expansion, and a mix of feasible development types that generally favor lower-rise housing and medical office over taller mixed-use buildings without incentives.

"This market study is one of the first parts of our Silverdale Regional Center subarea plan and design standards update," Colin Poff said, describing the study as a foundation for the subarea update and for Puget Sound Regional Council (PSRC) recertification as a regional center.

Echo Northwest analyzed rents, vacancy, developer interviews and development-feasibility prototypes. Consultant Jennifer Cannon said multifamily rents and low vacancy in and near Silverdale indicate a strong multifamily market and noted a near-term need for workforce housing tied to the hospital expansion.

"The North Tower is going to add 74 new hospital beds. In terms of employees that it's going to add, it could be up to 200 people," Cannon said, and hospital interviewees emphasized the need for housing within about 30 minutes of the hospital for on-call staff.

The study evaluated six development prototypes: adaptive reuse (one story), townhomes (three stories), low-rise apartments (three stories), mid-rise apartments (four to seven stories), mixed-use apartments (four to seven stories), and two-story medical office. Echo Northwest found medical office and lower-density residential (townhomes and low-rise) to be the most immediately feasible without subsidies; mid-rise and vertically mixed-use buildings were less feasible but could become viable with incentives such as a multifamily tax-exemption (MFTE) program.

The consultants modeled both eight- and 12-year MFTE options; the 12-year option requires at least 20% of units set aside at specified affordable levels. Cannon said the MFTE would "substantially increase development feasibility in Silverdale" and could encourage denser housing near the hospital and transit center.

Poff and Cannon summarized other draft recommendations: consider minimum densities near targeted nodes, continue to study waivers or reductions of impact fees for redevelopment and adaptive reuse, evaluate tax-increment financing for infrastructure, and pursue permitting and process improvements. They also recommended planning for transit-oriented development around the new Silverdale transit center and considering waterfront and Old Town investments that support residential and visitor uses.

The market study included a parcels analysis showing about 114 acres of vacant land and 42 acres of underutilized land inside the regional center, plus many buildings approaching 50 years in age that may be redevelopment candidates. The team said Silverdale currently has about 12,765 activity units (people and jobs), with about 79% jobs and 21% residents, and that planning scenarios show the center can meet PSRC's 45 activity units-per-acre target by 2044 under several growth scenarios that vary by MFTE adoption, hospital build-out and a potential foot-ferry connection to Bremerton.

Commissioners and public commenters pressed for more outreach to healthcare employers, independent medical providers, and the U.S. Navy, and asked how nearby large developments (Royal Oaks, Newberry Hill) would be integrated into planning. Poff said additional stakeholder outreach and a summer of community workshops and design-charrettes are planned; the county intends to post visuals and further materials on the project website and to submit an initial PSRC recertification application in May.

Ending: Staff said the market study will be finalized by May, will inform a summer engagement program including surveys and design workshops, and that the subarea plan and initial design guidelines should yield a draft by the end of the year with final adoption and integration into the comprehensive plan targeted for early 2026.