Council wrestles with housing targets, local preference and implementation tools in comprehensive plan review

Jerry Wilson, interim planning director, told the City Council at its Jan. 9 study session that staff had compiled council comments into a matrix and were aiming to return recommended language for the ordinance and adoption process in coming weeks.

The most contested subjects were how the plan frames housing targets required under regional and state rules, local preferences for affordable units, and the suite of implementation tools the city may use — from fee reductions to tax-exemption programs.

“This is a target for the increase and that we're not setting this as a ceiling or a floor,” Andrew, a planning consultant, said during the meeting while describing the relationship between regional targets and the city’s draft language inserting the word “minimum.” The draft language reads, in part, “plan for a minimum net increase of 892 housing units.” Council members and staff debated whether “minimum” implies a floor and could be misunderstood by regulators or the public.

Nut graf: The discussion matters because state and regional mandates (including Growth Management Act implementations and PSRC targets) require cities to demonstrate capacity for specified housing amounts and income bands. How the city frames those amounts in the comprehensive plan affects later development regulations, annual monitoring, and whether the city must make larger changes to comply.

Most council members and staff said the city must show capacity to accommodate the units the county and the Puget Sound Regional Council (PSRC) assigned. Andrew and staff briefed council that the draft used the PSRC and Pierce County targets as the basis for capacity analysis and that changing densities now could amount to an implicit downzoning with consequences for meeting the targets.

Council members asked how different income bands interact. Staff replied that units at lower income bands (for example, those at 80% of area median income and below) are tracked separately and that a unit affordable at one band can count toward overall totals but might not satisfy every income-band requirement.

Accessory dwelling units (ADUs) drew detailed questions. Staff noted ADUs are difficult to model because uptake is uncertain: ADUs appear on single-family parcels only if owners build them, and state reporting and local permitting records will take time to show reliable uptake. “It’s almost like icing on the cake,” a planner said, summarizing staff’s caution about relying on ADUs to meet low-income targets.

Local preference and “right of first refusal” language also prompted debate. Council member discussion proposed language that would prioritize residents of certain neighborhoods for new affordable units. Staff warned this touches implementation, qualification procedures and state law limits: “It’s very difficult when you're talking about a market program, not something that we control,” a staff member said, and recommended policy-level direction that the city “explore ways to figure out how to provide opportunities for residents to have access to these units when they become available.” Council agreed there was consensus for a policy to explore tools rather than to attempt to write detailed qualification rules into the comp plan.

On incentives and funding, council discussed fee reductions, waivers and external funding. Council Member Luke urged language that the city pursue “external funding sources” rather than relying solely on taxes or utility connections paid by residents. Other members warned that insisting on exclusively external funding could block projects. Staff proposed a compromise policy asking the city to seek external funding and to consider fee and process incentives while avoiding unfunded mandates that would prevent projects from proceeding.

Council and staff also discussed property-tax-based incentives such as the Multifamily Tax Exemption (MFTE) program. Staff noted MFTE is a state-granted tool that reduces taxes for eligible developments but requires a separate, detailed local adoption process and designation of eligible areas; it affects multiple taxing jurisdictions and has fiscal consequences for county and special district partners.

Council pressed staff on monitoring and course-correction. Staff recommended annual reporting on progress toward targets, coupled with a required five-year review to assess whether development regulations are producing the capacity needed to meet the comprehensive plan’s housing goals.

Ending: Staff said they would prepare refined policy language for the next study sessions, consult the city attorney on enforceability and constraints, and return with compiled language for council direction before the ordinance’s first and second readings. No formal votes occurred during the session.