ARCH presents middle-housing options; commission asks staff for draft ordinance in March

City planning staff and ARCH, a regional housing coalition, briefed the Newcastle Planning Commission on middle-housing requirements and inclusionary-housing options during the Feb. 26 meeting, outlining how the state-mandated allowance for duplexes and other “middle housing” could be paired with local policies to generate affordable units.

Lindsay Masters, executive director of ARCH, told the commission that ARCH and its member jurisdictions have used a mix of strategies — including inclusionary zoning, fees in lieu and local investments — to produce affordable rental and for-sale homes across East King County. ARCH staff said the coalition has helped produce roughly 10,000 affordable homes regionwide and that ARCH-administered inclusionary programs have delivered more than 2,300 rental units and about 800 homeownership units in member cities.

ARCH’s feasibility work, Masters said, shows that allowing additional density typically raises land value, which creates an opportunity to capture value for affordable housing. At the same time, she cautioned that middle-housing product types in East King County often remain expensive without subsidies; ARCH’s market work indicated that many middle-housing configurations would still require household incomes above typical local medians to be market-rate attainable without incentive programs.

Key points from the presentation and discussion

- State requirement and timeline: Staff and ARCH reminded the commission that state middle-housing rules require local code changes this year; the state model code will inform the city’s updates and some state provisions take effect in July.

- Minimum local changes: Newcastle will be required to allow two units per residential lot (e.g., duplexes or stacked flats) and to permit up to two accessory dwelling units (ADUs) on single-family lots, consistent with state law.

- Inclusionary options: ARCH described how jurisdictions apply inclusionary requirements (for example, Redmond’s 10% requirement at 80% AMI, which Redmond later raised to 12.5% in its update) and how fees in lieu are calculated and pooled for regional projects. Kirkland’s model applies inclusionary requirements to projects of four or more units and uses fees in lieu for smaller projects.

- Local examples and feasibility: ARCH noted a Newcastle example (Lake Warren Townhomes) that included three deed-restricted affordable units at 80% AMI. ARCH’s study showed that without additional incentives, many middle-housing types would be affordable in form but not in price to moderate- and lower-income households in the regional market.

Commissioner questions focused on practical implementation: whether fees in lieu tend to be paid rather than affordable units built on-site, how fee levels would affect small infill projects, and whether fee revenue could be used locally (commissioners were told cities usually set policy direction to invest fees locally but may invest regionally if no viable local projects exist). Officers also discussed exemptions for very small units (Sammamish exempts homes under 1,000 square feet) and the practicality of applying a citywide fee requirement to scattered small subdivisions or single-lot infill.

Staff direction and timeline

Planner Aaron (staff) said the commission’s feedback would be used to prepare a draft middle-housing ordinance in March. The staff timeline presented in the meeting indicated a draft ordinance would be returned to the commission next month, followed by ordinance review, a public hearing and anticipated City Council adoption later in the spring/early summer, aligned with state deadlines.

Clarifying numbers and context

- ARCH reported having a regional mailing list of about 10,000 households seeking affordable housing opportunities. - Newcastle currently has about 60 units designated for extremely low-income households but the stated local need figure discussed was roughly 250 units at that level. - ARCH and member jurisdictions reported having pooled roughly $100 million in local resources across decades to leverage state and federal funding.

Ending

Commissioners asked staff to return with a draft ordinance in March that reflects the commission’s guidance: consider applying inclusionary requirements with exemptions for very small projects or units, outline a fee-in-lieu formula for small developments, and present options for how fee revenue would be spent or prioritized. The commission did not adopt any binding inclusionary percentages or fee amounts; those details will be part of the staff’s ordinance draft and later public hearings.