Oak Harbor council weighs deviating from county land-capacity rules to meet housing allocation

Oak Harbor city officials debated whether to alter the technical assumptions behind the 2025 comprehensive plan during a Feb. 25 council workshop, focusing on how the city should respond after Island County asked the city to absorb a larger share of low-income housing in the urban growth area.

The discussion centered on differences in land-capacity analysis and how to reach a county request that 41% of certain low-income housing growth be accommodated within the city. Principal Planner Rajesh Kakamak and consultant Clay White summarized the methodology, and City Attorney Bob Zee told the council the county cannot unilaterally block the city's adoption of its comprehensive plan.

The issue matters because the land-capacity analysis determines whether the city must change zoning, expand the urban growth area (UGA) or otherwise reallocate where housing will be allowed. The county's letter asked Oak Harbor to shift a larger share of income-restricted housing into the city; staff said meeting that request will likely require both changes to local methodology and a map showing potential UGA expansion so the county can complete its parallel analysis.

"Comp plans are presumed valid upon adoption and they are valid unless taken to the growth board and the growth board declares them invalid," City Attorney Bob Zee said, summarizing state processes and statutes that govern coordination. He advised the council that cities and counties coordinate but that the county does not have a mechanism to single-handedly veto a city's plan without initiating a challenge to the growth board.

Consultant Clay White told the council the updated housing-element requirements have made the capacity analysis much more granular than in past cycles because the state now requires planning for housing by AMI (area median income) bands rather than only by population and employment. "The new housing element requirements have made this a more complicated process," he said, adding that the analysis couples market factors, infrastructure constraints and zoning options.

Staff described three options previously presented to council for increasing capacity inside city limits; under the city's highest-density option staff estimated the city could accommodate roughly 3,853 housing units overall but would still fall short of the county-requested distribution. Councilmember Jack Marshall characterized the current gap as on the order of several dozen units — about 79 units in his calculation — and staff said meeting the 41% distribution will likely still require expansion into the UGA, which would need county cooperation.

City Administrator Sabrina Combs said the city pursued state grants to support the plan update; staff cited two Department of Commerce grants in the packet. "We solicited a grant to the tune of 325 or 335,000 between the two grants," Combs said; Principal Planner Rajesh Kakamak and consultant Clay White previously referenced two $150,000 Department of Commerce grants in the record. Staff will clarify exact grant totals when they return with revised materials.

Councilmembers raised timing and process concerns but several expressed support for exploring a limited, documented deviation from the countywide planning-policy assumptions (for example, lowering the market-factor deduction) if doing so helps the city reach the county's requested distribution. Clay White said one technical lever is the market-factor percentage used to reduce theoretical capacity for parcels unlikely to redevelop; the county's policy had applied a 50% market-factor deduction in the city's analysis whereas state guidance commonly uses 20–25%.

Councilmembers asked staff to prepare a revised land-capacity analysis and an expansion map that accounts for the county's requested distributions, and to return at the March meeting with options and documented rationale. Staff said they would also document any intentional deviations from county policy so the city and county can jointly consider those adjustments during mediation or coordination.

No formal vote was taken at the workshop. Staff described the next steps as technical work and legislative input: produce scenarios that change market-factor assumptions, show the resulting unit totals by AMI band, and provide an expansion-map option for the UGA if deficits remain.

For residents: the council expects a follow-up presentation in March that will show specific code and zoning scenarios, the effect on each AMI band, and a recommended path for coordination with Island County.

The workshop also included a separate agenda item on a proposed local business-and-occupation tax and the marina; staff moved to that topic after the comprehensive-plan discussion.