Title
Update and Briefing on Middle Housing Code Amendments
Recommended Action
Committee Recommendation:
Not referred to a committee.
City Manager Recommendation:
Receive an update and briefing on Middle Housing Code amendments.
Report
Issue:
Whether to receive an update and briefing on Middle Housing Code amendments.
Staff Contact:
Joyce Phillips, 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 will require modifications to multiple Titles in the Olympia Municipal Code (OMC), although 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.
Soliciting Public Comments
The first public draft was posted online the last week of January (accessible from Attachment 3). 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 community survey was open from April 1 - May 15th to solicit input. Questions in the survey focused in on those parts of the draft where there was 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 amendments. 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 3). 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 (see Attachment 2 for a comparison the Tier 1 and Tier 2 requirements). 58% of the participants supported the current proposal of 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 initial draft amendments were posted online in January. The public hearing draft was posted online in June. Staff spent several weeks informing people of what is in the proposal and what it means. The survey results indicate a higher level of support for these amendments than staff had anticipated. Some community members also submitted written comments, which are attached for consideration (Attachment 4). In contrast to the survey results, several of the 10 written comments submitted by community members did not support allowing more dwellings on a lot and did not support the City meeting the Tier 1 requirements instead of those for Tier 2. See Attachment 4 for written comments.
Options:
1. Receive an update and briefing on Middle Housing Code amendments.
2. Do not Receive an update and briefing on Middle Housing Code amendments.
3. Receive the briefing at another time.
Financial Impact:
The City was awarded a grant from the Washington State Department of Commerce, Growth Management Services, to help cover the costs of this work. The portion of the grant that helps fund this work is for $37,500.
Attachments:
Public Hearing Draft Code
Survey Summary & How Input Used
Project Webpage
Public Comments