Title
Middle Housing Code Amendments - Public Hearing
Recommended Action
Move to recommend approval of the Middle Housing Code Amendments.
Report
Issue:
Whether to recommend approval of the Middle Housing Code Amendments.
Staff Contact:
Joyce Phillips, AICP, Planning Manager, Community Planning and Economic Development, 360.570.3722
Presenter(s):
Joyce Phillips, Planning Manager
Background and Analysis:
In 2023 and 2024, Washington State passed laws that require the City of Olympia to address middle housing, accessory dwelling units (ADUs), and co-living housing in its development regulations. Implementing these new requirements means the City will need to adopt modifications to multiple Titles in the Olympia Municipal Code (OMC). The majority of the changes are to OMC 18.04, Residential Districts.
In an effort to help community members understand the types of changes that would be needed, CPED staff prepared information sheets for Middle Housing, ADUs, and Co-Living Housing. The intention is to highlight the primary new requirements of the bills with a focus on what is not already addressed in the OMC. A summary of each is as follows and the information sheets can be found on the project webpage (see Attachment 3):
Middle Housing
• The City must now allow more than one unit per lot on all lots zoned primarily for residential use
• The number of units allowed on a lot increases for affordable housing
• The number of units allowed on a lot increases within a certain distance of key transit types
• The City cannot require any standards for middle housing that are more restrictive than those required for detached single-family residences
• The City may apply development regulations that are required for detached single-family residences including, but not limited to, setbacks, lot coverages, stormwater, clearing, and tree canopy and retention requirements to ensure compliance with existing ordinances intended to protect critical areas and public health and safety
• The City must apply the same development permit and environmental review processes that apply to detached single-family residences to middle housing
Accessory Dwelling Units
• Cannot assess impact fees on new ADUs that are greater than 50 percent of those imposed on the principal unit
• Must allow at least two ADUs on all lots located in all zoning districts within an urban growth area that allow for single-family homes
• Must allow a maximum gross floor area requirement for ADUs of at least 1,000 square feet
• Cannot impose setback requirements, yard coverage limits, tree retention mandates, restrictions on entry door locations, aesthetic requirements, or requirements for design review for ADUs that are more restrictive than those for principal unit
• Must allow ADUs to be converted from existing structures, including but not limited to detached garages, even if they violate current code requirements for setbacks or lot coverage
• Must allow the sale or other conveyance of a condominium unit independently of a principal unit
Co-Living Housing
• Development Regulation standards cannot be more restrictive than those required for other types of multifamily residential uses in the same zone
• Cannot require a review, notice, or public meeting for co-living housing when that is required for other types of residential uses in the same location, unless otherwise required by state law
• Cannot exclude co-living housing from participating in affordable housing incentive programs under RCW36.70A.540
• Cannot treat a sleeping unit in co-living housing as more than one-quarter of a dwelling unit for purposes of calculating dwelling unit density
• A city may not treat a sleeping unit in co-living housing as more than one-half of a dwelling unit for purposes of calculating fees for sewer connections, unless the city makes a finding based on facts, that connection fees should exceed the one-half threshold
Decision Points
As the draft code amendments were being contemplated and developed, it was clear to staff that some things were being proposed because they are required under state law and other things could be proposed one way or another, because of a policy choice. Staff relied on earlier input from the Land Use and Environment Committee members, language from the comprehensive plan or other city plans like the Housing Action Plan, and staff in development review roles to help shape the first draft.
However, staff wanted to help highlight those decision points for the public, to be transparent and to help community members develop comments that are the most relevant to parts of the proposal that could change in a future draft. A document highlighting the main decision points used in developing the draft was also posted online.
The most significant decision points include:
• Draft to meet requirements for Tier 1 Cities rather than Tier 2 Cities
• Use locally defined “frequent transit routes” rather than state defined “major transit stop”
• Use half-mile distance rather than quarter-mile distance
• Count accessory dwelling units (ADUs) toward the total number of units allowed per lot
• Keep a maximum size limit for ADUs - 1,000 square feet in most cases
• Eliminate the maximum number of stories allowed (typically 2 stories in most lower density residential zones) and instead rely on the maximum building height
• Limit unit lot subdivisions to short subdivisions (9 or fewer lots)
Soliciting Public Comments
The first public draft was posted online in January of 2025 (accessible from Attachment 4). The information sheet pointing out the primary decision points was also provided. Staff spent several weeks providing information and talking with members of the public about the draft. A public meeting, to provide an opportunity for questions and answers about the proposal was held on March 31st. A community survey was open from April 1 - May 15th to solicit input. Questions in the survey focused on those parts of the draft where there was an opportunity to make revisions in the public hearing draft, related to the policy decisions made in the first draft.
The webpage and survey received more views and survey takers than is common for code amendment proposals. There were 990 visitors to the site, with 189 people selecting to take the survey. A 46-page report, including all survey responses, is posted on the project webpage (Attachment 4). A shorter survey summary, with a statement about how input from the responses for each question was used, is attached for consideration (Attachment 2). For the most part, the community input supported the initial proposal, including in areas of the draft where the City exceeds the state’s minimum requirements. 57% of the survey participants supported meeting the Tier 1 requirements of the middle housing legislation, many mentioned it was an opportunity to more fully address the housing crisis by allowing more residential dwellings. The City currently only has to meet the requirements for Tier 2 cities, but within several years the City would have to meet the Tier 1 requirements due to growth when looking at the current city limits and the urban growth area together. 58% of the participants supported the current proposal for having Accessory Dwelling Units count towards the maximum number of units allowed per lot.
Climate Analysis:
Overall, the proposed amendments will support efforts to increase urban density and reduce urban sprawl. This work will promote infill residential development, making more use of the existing transportation and utility systems than development in undeveloped areas would. In addition, paratransit, retail deliveries, mail, and school buses already serve these areas with transportation services. Most parts of the City of Olympia are served with public transit. More development in these areas will support increased transit use and any increases in service that come with more density and higher ridership.
Equity Analysis:
Equity is challenging to address in code amendments. The code language applies citywide, or at least equally across the zoning district designations (standards are the same for all R4-8 zoning districts, regardless of where they are in the city). The systemic barriers that need to be overcome, that this effort may help address, have more to do with ensuring access to a variety of housing types in any and all neighborhoods, by rental or purchase.
Near term benefits will likely be more for people who are seeking housing, either to rent or purchase, especially in the areas of the city that are primarily made up of single family homes at lower densities (which make up approximately 70% of the City and Urban Growth Area).
The longer-term benefits may primarily be to the property owners, who can recoup construction costs through rents and can continue to build wealth over time. There are provisions in the draft that will allow further subdivision of these units (unit lot subdivisions) or conversion to condominium (condominiumization) of these units - but that is at the discretion of the property owners. Some may go through the process and offer for sale, likely at market rates, but many may hold on to them and rent them out to recoup costs and then to gain income. This provides flexibility for the current property owners but could also at least hold the income gap in status quo. However, allowing for these homeownership opportunities is also an opportunity for some people to buy a home that may not otherwise be able to do so. In the past, community members have supported efforts that increase homeownership opportunities.
Neighborhood/Community Interests (if known):
The survey summary (Attachment 2) is a great way to get a sense of the levels of support for the proposed amendments. However, there were also written comments submitted. The written comments are attached for review and consideration (Attachment 3).
Some written comments support the proposal and others do not. Comments that were not supportive of this proposal tended to focus on issues around density/number of units allowed per lot, concern about using frequent transit routes in place of major transit stops, concern about shading solar panels on adjacent lots, ADU size, and wanting the proposal to provide or require more in the way of affordable housing (for rent or purchase).
Options:
1. Conduct the public hearing, deliberate, and develop a recommendation on the proposed amendments.
2. Conduct the public hearing and postpone deliberations until the following meeting.
3. Do not conduct the public hearing and reschedule it for a future meeting.
Financial Impact:
This work is being funded, in part, by a grant from the Washington State Department of Commerce. The rest of the necessary funding comes from the Community Planning and Economic Development Department’s budget for 2025.
Attachments:
Public Hearing Draft
Survey Results Summary
Public Comments
Project Webpage