Council delays consideration of fee‑in‑lieu option for town center affordable housing until 2026

City staff briefed the Mercer Island City Council on Oct. 7 about work to evaluate a fee‑in‑lieu option that would allow developers to pay into a local affordable housing fund instead of building required income‑restricted units in town center projects. After questions from council members, the council voted to defer detailed consideration of a fee‑in‑lieu policy until 2026 and to coordinate it with comprehensive plan and development‑code amendments required by a recent Growth Management Hearings Board decision.

Jeff Thomas, director of Community Planning & Development, and Allison Van Gormer, deputy director, described work that began in late June, including hiring a consultant to produce a preliminary nexus study analyzing three town‑center development prototypes and estimating a maximum feasible fee. Van Gormer said the study was preliminary and that additional analysis will likely be needed if development regulations change following the Growth Management Hearings Board decision issued Aug. 1.

Council member Weinberg praised staff and the consultant’s work, requested clearer public materials explaining the nexus and fee calculations, and moved to table further action. Council member Andrault asked whether fee proceeds could be spent on off‑island housing; City Manager and staff said they would seek legal guidance and provide a clear path forward when the council resumes consideration in 2026.

The council’s motion to defer passed unanimously (Mayor Saleem Nies, Deputy Mayor Rosenbaum, Council members Andrault, Reynolds, Becker and Weinberg voted aye; Council member Weicker absent). The motion directs the city manager to coordinate fee‑in‑lieu consideration with the comprehensive plan and code amendment process related to compliance with the Growth Management Hearings Board order.