Kenmore planning commission backs inclusionary housing code language, asks staff to return with Option 1 plus exemptions and delayed start

The Kenmore Planning Commission voted March 18 to ask staff to return with draft code implementing ARCH (the Regional Coalition for Housing) Option 1 that would apply an inclusionary requirement to new middle-housing projects in R-4 and R-6 zones, with an amendment directing staff to include exemptions for very small units and a delayed effective date.

The commission's motion directs staff to prepare zoning text that would require a 10% affordable unit set-aside for qualifying projects (with affordability levels proposed in ARCH's memo: about 80% of median income for owner-occupied units and 60% for renter-occupied), and to retain a fee-in-lieu for projects that generate fractional unit obligations. The commission asked staff and ARCH to provide clearer code language, rounding rules and implementation details at the April 1 meeting so the commission can forward the code to a public hearing.

Why it matters: The change would pair the city's planned increase in residential capacity (the "middle housing" upzone) with an attempt to capture some portion of the land-value gain for affordable housing. ARCH modeling presented at the meeting showed small prototypes (for example, a four-cottage project on a 10,000-square-foot lot) could absorb a 10% requirement and still be feasible; the firm estimated a sample fee-in-lieu at roughly $38,400 for that prototype.

The discussion was the meeting's central item and drew extensive commissioner and public comment. Commissioners debated whether to apply requirements citywide in R-4/R-6 or only near major transit stops, how to treat smaller accessory units, and whether fees should go to the city's affordable-housing fund or to the ARCH Trust Fund. Staff said those questions remain to be addressed in draft code and in follow-up meetings with the consultants.

Highlights and motions

- ARCH presentation: Mike Stanger, senior planner with ARCH, summarized financial modeling and two policy options. He told commissioners the city (paraphrase) that small projects are often infeasible for deeper affordability, but prototypes with enough floor area typically show residual value to support a 10% requirement or a modest fee-in-lieu. In his words: "from that residual profit ... is sometimes called a potential for the City to assess some affordable housing." (Mike Stanger)

- Motion on inclusionary requirement: The commission voted to have staff return with code based on Option 1 (a 10% set-aside / fee-in-lieu structure applied across R-4 and R-6) but amended it to include exemptions for very small units and to delay the effective date so projects already initiated or vested are not immediately affected. Roll-call recorded 5 yes, 2 no; the motion passed (yes: Commissioners Dorian, Olsen, LaSalle, Vice Chair Thompson, Chair Banashinsky; no: Commissioners Vanderland, Macias).

- Parking motion: Separately the commission approved a motion to lower parking minimums for middle housing: base minimum of one off-street parking space per dwelling unit for most middle-housing types, and one space per two units for cottage housing. The roll-call vote passed 5-2.

Public comment and stakeholder positions

- Caitlin Sullivan (Kenmore resident) pressed commissioners to "table that discussion until you have time to thoroughly examine [ARCH's] methodology and findings and evaluate the impact that fee in lieu has on the development and other areas." She said ARCH numbers for land cost and unit sizes appeared higher than local recent sales and urged careful review of assumptions.

- Dakota Rasch (Lake Forest Park) urged that required affordable units "must have substantially the same function as other units being built" and proposed that code language consider "function" versus "features" so affordable units are not second-class in utility or quality.

- Several commissioners said ARCH's modeling showed feasibility for a 10% requirement in many but not all prototypes, and that inclusionary zoning alone will not meet Kenmore's overall affordability targets; multiple commissioners also asked staff to clarify how fees collected would be held and distributed (city affordable-housing fund vs. ARCH Trust Fund).

What the code will say next (staff tasks and unanswered questions)

Staff and ARCH were asked to return with: a clean draft of the Option 1 code text; precise rounding rules and fee schedules for fractional obligations (fee-in-lieu rate calculations); exemptions thresholds defined by unit square footage (examples cited: Sammamish exempts units under 1,000 sq ft); clearer definitions and treatment of accessory dwelling units and whether condo-ized units count for density; a proposed delay/vesting approach so developments already in process are not immediately subject to a new fee; and suggested guardrails or language about where fee-in-lieu funds are held and how they will be spent (city fund vs. ARCH trust and reporting requirements). The commission scheduled follow-up discussion and expected the draft to be ready for further amendment on April 1 so it could be set for public hearing.

Ending: Commissioners and staff said they would keep refining the draft. Chair Banashinsky thanked staff and ARCH and set the next regular Planning Commission meeting to continue code review before the public hearing cycle.