Sequim report: consultants say city needs more housing, zoning fixes and to plan for tourism seasonality
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Summary
Leland Consulting Group told the Sequim City Council and Planning Commission that Sequim needs new housing to meet state targets, faces barriers including high impact fees and permitting complexity, and has economic opportunities in tourism, health care and specialized manufacturing; staff and commissioners were directed to begin code changes and public outreach.
Leland Consulting Group presented a housing and economic analysis to the Sequim City Council and Planning Commission on Nov. 17, urging the city to expand housing options, streamline development rules and prepare for seasonal tourism demand.
The report, presented by Andrew Oliver and a Leland colleague, found that Sequim’s homeownership rate is roughly 60% and that the city’s housing market has a very low multifamily vacancy rate of 0.9%, indicating substantial unmet demand for rental units. "We're trying to help understand what are the opportunities for economic and housing growth over the next 20 years," Oliver said, summarizing the firm’s scope and recommendations.
Why it matters: the consultants told elected officials the city needs more diverse housing types and regulatory changes to meet state housing targets and accommodate workers in a tourism‑driven local economy. The report estimates Sequim must add roughly 1,850 new housing units by 2045 to meet state targets (reported in the presentation as "18 50"). Leland recommended encouraging multifamily construction to produce many units at once and using incentives and partnerships to support below‑market housing.
Key findings and recommendations
- Housing and affordability: Jennifer (Leland) said homeownership is approximately 60% and renters about 40%; migration data show higher‑income households moving into Clallam County while lower‑income households are leaving. The consultants recommended monitoring short‑term rentals (they found full‑home short‑term listings were about 2.7% of single‑family homes in a July sample) but concluded that, given available vacant residential land and other barriers, short‑term rentals are not currently the primary driver of price increases in Sequim. "Keep an eye on it," Jennifer advised when summarizing the short‑term rental recommendation.
- Market pressure and costs: Leland noted construction costs have more than doubled since 2009 (Mortenson index cited), making multifamily projects expensive to build in a market without Seattle‑level rents. Typical home price (Zillow index) in Sequim was presented near $582,000, with a sampled single‑family average of about $825,000 in August 2025.
- Development barriers: the report flagged local permitting perceptions, high and rapidly rising impact fees (particularly park impact fees), a limited construction labor pool, and partially built or "landlocked" subdivisions caused by a prior change in connectivity rules. Leland identified SB 5258 (referred to in the presentation as "SB 52 58") as a new state law requiring jurisdictions to scale impact fees proportionally and showed how Sequim’s park fee compares to a recent Snohomish fee schedule.
- Zoning and regulatory changes: consultants recommended the city consider allowing more housing types (noting state bills HB 1110 and HB 1337), creating a moderate‑density residential zone, updating ADU rules to align with state law, and revising the High‑Tech Light Industrial (HTLI) zone to permit office/research uses and clearer use tables while adding environmental performance standards.
Commissioners’ questions and staff follow‑up
Council and commission members asked about how ADUs and accessory rentals were counted in short‑term rental data, whether households with unrelated members had been tracked, construction wages and labor availability, and the role of local transit for commuting workers to Port Angeles. Staff and consultants said some of those data points could be provided later (for example, construction wages and household composition from census sources) and noted the city already collects an Affordable Housing Sales Tax Credit with about $165,000 on hand for future use; Council must determine how to spend those funds.
Next steps
Carla Bowden (Interim DCED Director) told the meeting the policy document review is near completion: the Planning Commission will review the housing chapter in December and the economic development chapter shortly after; zoning and development regulation updates (Title 18) are already underway. Staff expect a Planning Commission–recommended comprehensive plan in early 2026 and public hearings before the City Council in June 2026.
The work session concluded with thanks to Leland Consulting and a commitment from staff and elected officials to use the report’s data to inform forthcoming zoning amendments and implementation steps.
