SNOHOMISH — At a Dec. 6 public hearing, the planning commission will consider forwarding a draft municipal code revision aimed at increasing affordable housing.
The draft regulations would replace an existing chapter in the city code with a more user-friendly version designed to incentivize builders and existing landlords to create more lower-cost housing.
It’s intended “to add tools to the toolbox for housing developers to build new affordable units,” said city planning director Brooke Eidem.
Applicants can qualify for financial and regulatory incentives by making at least 10 percent of their units affordable to households earning 60 percent or less of the median income in the Seattle-Bellevue-Everett Primary Metropolitan Statistical Area.
The 2022 median income for Seattle-Tacoma-Bellevue was $107,000, according to the U.S. Census Bureau, It was lower in Snohomish County, at $96,000.
Owners of existing multifamily buildings with at least four units can also apply for incentives as long as 10 percent of the units remain affordable.
The chapter also offers a 10-foot height bonus within the northern section of the Midtown District, which is along Avenue D from Tenth Street to the state Route 9 bridge.*
It also allows developers of certain affordable housing-eligible projects in eligible locations* to ask for a multi-family property tax exemption (MFTE) that waives the annual cost of property taxes for a developer during a set period. Currently the city only grants a MFTE for eligible projects in the Pilchuck District. A high-intensity discussion last year to establish a MFTE in the Midtown District ended with a split City Council vote to ultimately reject it.
Developers would also be eligible to receive 50% discounts on city traffic impact fees and park impact fees, and be eligible for 20% or larger discounts on city water and sewer connection fees paid before construction starts. The counterbalance of utility fee discounts would come out of the city’s Sales and Use Tax for Housing and Related Services.
Affordable units must be intermingled throughout the building and meet the same design standards as all other building units.
Applicants for affordable housing incentives must agree to provide affordable units for 30 years. There are financial penalties if they break the agreement.
The changed chapter of code (section 14.285) comes at behest of the City Council, which asked the planning commission to address gaps in the current law that have discouraged developers from taking advantage of affordable housing incentives.
Additionally, a 2021 state law requires cities to accommodate new housing for each income level.
“Affordable housing is a regional issue, and is also being addressed by our neighbors in various ways,” Eidem said.
She noted that private developers, rather than the city, will be the ones adding units.
Snohomish will encourage them through incentives that include a mix of tax breaks, utility fee reductions, expedited permitting, and other advantages, depending on zoning requirements at the building’s location.
To earn the incentives, applicants must sign a 30-year contract with the city that sets a recorded agreement, lien or covenant to maintain the 10-percent affordable housing ratio even if they transfer ownership.
Breaking the contract would require paying back all the original financial incentives with 6 percent interest on top, and penalties for non-financial incentives would be 20 percent of the assessed change in value at the date of the building sale or conversion of units to market-rate pricing.
The planning commission heard from the area’s Realtors association with suggestions as it crafted wording for the draft regulations.
If adopted by the planning commission, a final version would be drafted for council. If Council approves it at a meeting sometime in 2024, the new regulations would take effect five days after publication of the ordinance.
A full version of the draft regulations can be viewed at https://www.snohomishwa.gov/DocumentCenter/View/8677/Draft-Chapter-14285-SMC
* - Corrections, Dec. 1:
In the Nov. 29 article, "Snohomish may offer more city incentives to encourage affordable housing," an editor's additions to the story introduced an error about the eligibility being widened for the Multi-Family Tax Exemption (MFTE) program and an error on height alterations in the Midtown District.
The article stated an MFTE is eligible citywide. This misinterpretation is not true. The MFTE discussed in the draft code is for projects in areas already designated for a MFTE. It does not add more areas for an MFTE.
On Midtown, an error that an affordable housing bonus option allows buildings of up to a 65-foot height limit in the north Midtown area.
Yes, the city planning commission is discussing allowing a 10-foot height bonus for the north section of the Midtown District.
But it also is discussing reducing north Midtown zone heights to 45 feet.
If both changes get approval, the maximum standard height in north Midtown would be 45 feet. The ability to obtain a 10-foot bonus for having affordable housing would make the height limit 55 feet.
The Tribune regrets the error of stating the 10-foot bonus allows a 65-foot height limit and for stating the affordable housing incentives package would offer projects a MFTE citywide.
Prior related coverage:
July 2023: Snohomish considers strategies for more housing
2021: Snohomish looks at how to create more affordable housing
