2023/04/19 Council Agenda Packet

MARCH 2023 I DRAFT REPORT v.4.1 EVERETT WASHINGTON Feasibility of New Housing Development Incentives The objective of analyzing new incentives is to identify new public policies that may stimulate housing development in Metro Everett, along the City's urban corridors and near EVLE station areas. Specific criteria used to further evaluate the incentives being considered include: • An existing policy framework through which the incentive can be implemented. • The likelihood the incentive would produce housing units across all income levels. • The cost of incentives does not adversely burden the City or the taxpayer. • There is the availability of funding to implement and administer the incentive. The feasibility of incentives is presented in Tables ES.1 and 7.1. Incentive programs to test against these criteria were from the regulatory, administrative, near transit, and affordable housing incentives identified through the analysis of other programs in use in Washington. That assessment identified eleven individual incentives for further evaluation. Three of the incentives (Multi -family Tax Exemption, Fee Waiver, and Building Height Density) fit within the framework and funding provided by the Department of Commerce HDIP grant and are proposed to be carried forward to the Planning Commission in Q1-2023. The remaining incentives require additional study or administrative action, with several being better suited for evaluation as part of the Comprehensive Planning process or in support of Sound Transit's light rail project. Stakeholder Outreach A key aspect of the HDIP project was gathering input from community groups and industry representatives that develop multi -family (MF) projects in the Snohomish County -North King County region. These included housing organizations and private investors that are financing and building apartment and townhome projects. The community groups were receptive to the presentation of how incentive programs have performed in Everett over the past decade. Specific input involved questions about high -capacity transit connections in the City and the performance of incentive programs to provide affordable units. Input from private investors was very informative about specific challenges of developing multi -family projects in Everett, including: • The cost of parking requirements. • The cost imposed by extended permitting timelines. • The absence of fee simple townhome options for resale units. • The need for improved walkability to connect new projects to existing neighborhoods. • The requirement for upper floor setbacks for smaller projects. In addition to the stakeholders, input was gathered from other consultants working on housing development policies in Everett, including Sound Communities, the Urban Land Institute, PSRC, and Sound Transit. Key strategies being considered by these organizations include: • Washington State Housing Finance Commission's Land Acquisition Program to assist with financing land acquisition in exchange for affordability limits for 35 years. • Sound Communities revolving loan approach to land -banking for future housing affordability near transit stations. Sound Communities is also advocating for legislation to allow housing benefit districts. • ULI's recommendation for improving Evergreen Way to stimulate more multi -family housing along the corridor, particularly between SR 526 and Airport Way and reducing permit timelines. ES-4