2023/04/19 Council Agenda Packet

MARCH 2023 I DRAFT REPORT v.4.1 ii EVERETT WASHINGTON EXECUTIVE SUMMARY Through the support of a grant from the Department of Commerce, the City of Everett (City) analyzed housing incentive programs that are intended to encourage construction of a greater variety of affordable and market rate housing types at prices that are accessible to a greater variety of incomes. In doing this work, the City considered approaches to create more affordable housing units and evaluate residential displacement, particularly in neighborhoods with communities at high risk of displacement. This work includes the following strategies and recommendations from the adopted Rethink Housing Action Plan: • Strategy 5: Coordinate a Development Incentives Study to provide guidance on changes and initial incentives for affordable housing construction and preservation. • Recommendation 2.2: Provide a detailed economic study of potential incentives in urban corridors. • Recommendation 4.4: Expand fee waivers for affordable housing. • Recommendation 4.6: Review and update the Multi -family Tax Exemption program. • Recommendation 4.7: Review and update development height incentives program for affordable housing units. "The current housing availability and affordability crisis....in Everett continues to threaten housing stability and quality of life for the community" Everett Housing Action Plan November 2021 A key focus for the analysis was to consider incentive programs that could stimulate housing development at scale. Locations where zoning allows larger housing developments are principally in the Metro Everett (downtown) and along the City's key urban corridors, which include: • SR 99/Evergreen Way from Metro Everett south to Airport Way • Broadway from Metro Everett north to the City limits • Everett Mall Way • Casino Road from Evergreen Way to Airport Way The analysis considered multiple development scenarios for two representative project types, a 5 over 1 podium style construction similar to apartment projects in the Metro Everett zone and a townhome style construction. The analysis also considered the private sector investment constraints to developing new multi -family projects under four development scenarios. The analysis was organized into the following elements, each providing important information on the performance and possible continuation of key multi -family housing development incentive programs. Update the Financial Analysis from the Rethink Housing Action Plan — Appendix G The financial model update involved adding current rental market and construction cost information to the Appendix G model in the Rethink Housing — Housing Action Plan (HAP). The Appendix G update relied on current market analysis and development feasibility study provided by private investment representative Cushman & Wakefield. This information was then used by BERK Consulting to update the financial model. The updated financial model provided an estimate of development costs and rental rates for four multi -family development scenarios that are similar to those considered in the HAP. The update of the financial analysis is discussed in Section 1.0. The supporting analysis is provided in detail as Attachment 1.2. ES-1