Are we ready for impact?

There was a recent Urbanist article which included this cold thought: “Bainbridge Island and Clyde Hill will be far from the last cities to reckon with the new state framework forcing cities to act more aggressively when it comes to planning for affordable housing. But, like crash-test dummies, they will take the first impacts and provide lessons for everyone else.”

It is an interesting contrast between that scenario and a Seattle Times article from a few months ago saying the implementation of the middle housing rules were a huge change you might not even notice, but of course, that was in regard to Seattle, where instead of one house and two ADUs you’ll now be allowed four homes on each lot (a gentle increase of 33%).

In Bellevue, we’re going from a house (and as of 2023’s Ordinance 6746, an XL ADU) to eight units on a lot, or unlimited cottages. Housing affordability gains have been achieved in places like Minneapolis by allowing triplexes – as Strong Towns puts it, a gradual evolution to the next increment of development. I’m not aware of any other places that have previously opted for a multiplier like this.

In addition, Seattle has intensity factors that reduce unit count in proportion to the area that is unbuildable due to wetlands, etc. Bellevue currently has an Intensity Factor too, in LUC 20.25H.045, but it is likely that this will be removed “for development yield” in the Critical Areas Ordinance update that is progressing through Planning Commission and City Council review. A Planning Commission hearing on the CAO is scheduled for this week (October 22), and it will probably advance to Council soon.

This is likely to leave CC&Rs and fees-in-lieu as the primary blockers for housing density; if perhaps 20% of Bellevue’s 30,000 suburban homes are under a CC&R, the added density potential of allowing seven more on each lot would be 168,000 housing units, plus tens of thousands more from the unlimited cottages provision, and many more from the urban portions of Bellevue where multifamily towers are allowed (if you look at pages 69 and 1253 of the Comp Plan FEIS, it appears that the non-suburban areas of Bellevue have a theoretical capacity of 322,000 homes before the 25% market factor is applied). For context, Bellevue has ~60,000 homes now and Seattle has 368,000, so this exceeds both of those combined, but our housing target is still 35,000 no matter what zoning is applied (see Figure 2-9 on page 80 of the Comp Plan FEIS), and that is what we base future utility capacity on.

Just as Bellevue stopped tracking ADUs through the registration requirement in 2023, middle housing has started off without a distinct category for middle housing permits, so it may be harder to see what our yield is. Buildings with one or two units, of which there may be multiple on a lot, will have the same permit type as single family, and if there are three or more units, an existing multifamily permit type would be used. There was an uptick in single family permits just after the rule change, which could mean duplexes (up to four on one lot) or cottages, or just more single family homes. A new permit type is supposed to be created for middle housing, but it won’t include those initial applications.  

Attendees at the candidate forums may have noticed that I’m not asking for the middle housing rules to be clawed back, but I do think we need to do our homework for this rollout – better late than never. We have the example of the work done in Olympia for the middle housing Model Ordinance, which brought together experts in building and fire safety, public works, housing finance, realtors, housing providers and developers, housing advocacy, and environmental advocacy (see a small sample of the discussion topics below), and we should also have a discussion about school capacity and our timeline for adding Lake Tapps capacity to our water supply. The cottages policy now allows much more impervious area, and it would be nice to have an open discussion about stormwater projections.

Bellevue also opted for a significant increase in co-living beyond what is being mandated by the state. Starting in January, this will include areas that are near centers like Crossroads and Eastgate, but not necessarily near transit. It is worth designing this policy well and having some community discussion, since it is an important affordability solution and the locations Bellevue has selected diverge from the transit-adjacent, no car needed model that the legislature had in mind. Unfortunately, it is not even on the Planning Commission calendar in the rest of this year.

One of our biggest challenges going forward will be the limited capacity in the transportation budget to make improvements that support road capacity for all these new car-dependent residents. In fact, we can’t even fund business as usual and had to extend our TFP timeline (see meeting memo and map). 

Adding the capacity for four units per lot, as mandated by the state, was always going be a lot of work. It’s as if the legislature signed us up for a Crossfit regimen. The fact that we chose to allow 8 units per lot and unlimited cottages, and are removing the intensity factor will turn it into an ultramarathon, and we can’t blame the legislature for that.

Middle Housing Public Engagement Report excerpts:

• Fire safety professionals flagged parking standards as a potential point of conflict in areas with narrow roads, and that more on-street parking could hinder fire vehicle movements. There was also discussion fire sprinkler requirements, which will not be directly addressed in the Model Ordinance. The focus group emphasized that planners should discuss middle housing fire safety with their local fire authority before seeing an increase in development.
• One to four units is typically the “sweet spot” for credit union loan financing. Developments with more than four units trigger different loan and regulatory requirements. A sixplex would generally fall in the “small” category that banks use and would typically be financed by a credit union, while banks will finance larger apartment building projects.
• For condominiums, the combination of homeowner association (HOA) fees and current interest rates are tough for condominium development even if Washington’s strict condominium laws were to be relaxed. Streamlined land ownership like a unit lot subdivision makes certain forms of financing easier for attached units.
• The one or two unit affordable housing bonus increase in Tier 1 and 2 cities helps keep nonprofit affordable housing providers competitive when competing for land with market-rate developers.
• Some affordable housing providers are experiencing a trend where it is harder to find residents for units with 3+ bedrooms than units with 1-2 bedrooms. That being said, the focus group liked the idea of more flexibility in the model ordinances and increased floor area ratio limits for the option of larger housing units. 
• New development incentivized by HB 1110 is an opportunity to improve stormwater infrastructure, be more resilient for climate change, and advance the recovery of marine habitats.
• One big challenge is how to handle garbage and waste collection for middle housing. Each housing unit could have collection for three bins (e.g. trash, recycle, compost), which could add up when considering multiple units on a property. Flexible standards and coordination with solid waste service providers is needed.
•  Portland, Oregon’s new standards which allow up to four units per lot were referred as a good city to study for development standards. New development under those standards is frequently resulting in fourplexes and townhomes with no off-street parking. 
• Residential appraisers are only allowed to appraise properties involving one to four units. Because HB 1110 has a pathway for six units per lot, six units is the basis for “highest and best use” analysis of all properties in Tier 1 cities, even for properties with one to four units.