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Council hears staff proposal for in‑lieu affordable housing fee; $34.45 per square foot recommended
Summary
City staff and consultants outlined a proposed affordable‑housing in‑lieu fee of $34.45 per gross square foot and asked council for direction on a market factor, fund management and allowable uses; council signaled interest in revisiting the fee periodically and preferred Arch to administer funds.
City staff and outside consultants presented the proposed implementation approach for Sammamish’s new inclusionary housing program and a recommended in‑lieu fee of $34.45 per gross square foot at the Jan. 14 study session.
Planner Evan Fisher and consultant representatives from Arch and Kidder Matthews explained how the fee was calculated, how it would be applied and options for holding and spending revenues. The proposal implements policy direction in the city’s newly adopted 2024 comprehensive plan and the implementing development code SMC 20.2.110, which requires a 10% affordable unit set‑aside at 80% of area median income (AMI) for qualifying development or payment of an in‑lieu fee.
Fisher explained the model behind the fee: Arch and BAE Urban Economics used local market inputs, development cost assumptions and customary profit and transaction costs to estimate market prices for several housing typologies, then calculated the gap between market prices and an 80% AMI price and converted that gap to a per‑square‑foot fee. “The final fee is a composite based off the model's results for several building typologies and is $34.45 per square foot,” Fisher said.
The code exempted units under 1,000 square feet from the fee; SMC 20.2.110 also includes a rounding rule whereby fractional unit requirements of 0.5 or greater round up to a required on‑site unit while fractions below 0.5 may be satisfied via in‑lieu payment. Staff gave examples showing how the fee would calculate for small projects and noted Kidder Matthews completed an independent review that found the model sound while cautioning that small market changes can affect project feasibility.
Council members asked whether a market factor should be used to adjust the fee and how frequently staff would revisit the rate. Arch and staff recommended monitoring starts and market conditions and returning with periodic updates; staff proposed an initial review cycle of about two years but said the council could set different intervals.
The council also discussed whether the city or ARCH should hold and manage collected funds. Council members expressed a preference to have ARCH manage the trust funds because they already administer an ARCH Housing Trust Fund and have dedicated staff, while expressing a desire that dollars be spent, when practicable, on projects that benefit Sammamish residents. Deputy Mayor Amy Lam suggested holding funds locally for a period (she proposed a five‑year example), after which unspent funds could be made available for regional projects. Council asked staff and ARCH to draft proposed program rules and a policy resolution that would accompany the fee schedule resolution expected in March.
Staff outlined the implementation timeline: staff will return Feb. 18 with a recommendation shaped by council feedback and will ask the council to approve two resolutions on March 18 — one amending the city fee schedule to add the affordable housing in‑lieu fee and a second establishing policies for an affordable housing fund and eligible uses.
Key policy references cited during the presentation were state House Bill 1110 (which enabled middle housing changes and inclusionary options), SMC 20.2.110 (the city's mandatory affordable housing program) and the adopted 2024 Comprehensive Plan.
