HomeMy WebLinkAbout08/28/2025 - PacketORCHARD
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Meeting Location:
216 Prospect Street
Port Orchard, WA 98366
Land Use Committee
Contact us:
Phone (360) 876-4407
cityhall@portorchardwa.gov
www. portorchardwa.gov
Land Use Committee Regular Meeting
Thursday, August 28, 2025
4:30 PM
Remote Access Only
Zoom Webinar Public Link: https://us02web.zoom.us/j/81034433449
Webinar ID: 810 3443 3449
Dial -in Number: 1-253-215-8782
1. Welcome and Introduction
Land Use Committee members and City staff introductions
2. Discussion Items
A. Discussion: Middle Housing Ordinance — Commerce Comments
B. Discussion: Public Notice Signs
C. Discussion: Multifamily Tax Exemption
D. Discussion: HB 1998 — Co -living Housing
3. Adjounment
Next Land Use Committee Meeting: September 17, 2025
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August 28, 2025 Meeting Agenda
1
For Committee Membership please visit https://portorchardwa.gov/city-council-advisory-committees/.
August 28, 2025 Meeting Agenda
From:
Vespier, Lilith (COM)
To:
Jim Fisk; Vanegas, Ted (COM)
Cc:
Porter, Ethan (COM); Nick Bond
Subject:
RE: Commerce 60 -day Review (2025-S-9586)
Date:
Monday, August 4, 2025 2:59:04 PM
Hi Jim,
Thanks for all the great work done to address middle housing and ADUs in code. I've also
learned about the variety of pre -approved plans Port Orchard is offering. The pre -approved
plans have a nice range of size options and simple (easy to build and maintain) design options.
These new tools represent a significant amount of meaningful work by staff and the
community. The combination of new codes and pre -approved plans should provide for more
housing, despite the changing economy.
After reviewing the code changes, we offer minor clarifications which may surface as the code
is implemented:
• Potential conflict of two ADUs per lot with the density assigned for the zoning district,
per POMC 20.68.100. It looks like the underlying zoning accounts for two ADUs but the
state "Provided, however, that the development of an ADU shall not be permitted if it
results in the exceedance of the unit density for the lot which is established in the
underlying zoning district," could be confusing. Several cities exclude/exempt ADUs
from density calculations to avoid any conflict which would limit the ability to add ADUs
consistent with RCW 36.70A.681(1)(c).
• Design requirements may propose an unanticipated financial burden on development:
Trim and window section 20.139.025(3), Architectural requirements Section 20.139.030
& .035, Building material requirement Section 20.139.040, and Roof design
requirements Section 20.139.045
I appreciate your thoughtful work and hope the community enjoys many benefits from these
changes.
All the best,
Lilith Vespier, AICP (She/Her) I INFILL HOUSING MANAGER
Phone: (509) 606-3530
Email communications with state employees are public records and may be subject to disclosure,
pursuant to Ch. 42.56 RCW.
From: Jim Fisk <jfisk@portorchardwa.gov>
Sent: Thursday, July 24, 2025 9:29 AM
To: Vanegas, Ted (COM) <ted.vanegas@commerce.wa.gov>
Cc: Porter, Ethan (COM) <ethan.porter@commerce.wa.gov>; Vespier, Lilith (COM)
<lilith.vespier@commerce.wa.gov>; Nick Bond <nbond@portorchardwa.gov>
3
Subject: RE: Commerce 60 -day Review (2025-S-9586)
External Email
Great! We look forward to the comments.
We believe the adopted Ordinance satisfies recent legislation related to middle housing
and in some instances exceeds those requirements. If there are areas where Commerce
believes the adopted Ordinance falls short of implementing the legislation, please
identify those shortcomings, if they exist, specifically.
Thanks in advance,
Jim
James C. Fisk, AICP, CNU-A
Principal Planner
City of Port Orchard
216 Prospect St
Port Orchard, WA 98366
360.874.5533
Please make official submittals to the Permit Center at permitcenterC�portorchardwa.ov to ensure maintenance of
an accurate Record.
From: Vanegas, Ted (COM) <ted.vanegasCa�commerce.wa.gov>
Sent: Thursday, July 24, 2025 9:22 AM
To: Jim Fisk <ifiskPportorchardwa.gov>
Cc: Porter, Ethan (COM) <ethan.porter(@commerce.wa.gov>; Vespier, Lilith (COM)
<Iilith.vespierCo)commerce.wa.gov>
Subject: RE: Commerce 60 -day Review (2025-S-9586)
Hi Jim,
We appreciate the city's hard work on these amendments and think they are very well done.
However, we do have these suggestions that will help to strengthen the approach. We can
follow-up with more specifics on that in the next couple of days.
Thanks,
-Ted
Ted Vanegas I Senior Planner
Growth Management Services I Washington State Department of Commerce
Olympia, WA
4
Phone: 360-280-0320
Growth Management — Washington State Department of Commerce
www.commerce.wa.gov I Facebook I Twitter I Linkedln I Subscribe
Email communications with state employees are public records and may be subject to disclosure,
pursuant to Ch. 42.56 RCW
From: Jim Fisk <ifisl<(@portorchardwa.gov>
Sent: Thursday, July 24, 2025 8:12 AM
To: Vanegas, Ted (COM) <ted.vanegasPcommerce.wa.gov>
Cc: Porter, Ethan (COM)<ethan.porterlcDcommerce.wa.gov>; Vespier, Lilith (COM)
<Iilith.vespierC5commerce.wa.gov>
Subject: RE: Commerce 60 -day Review (2025-S-9586)
External Email
Ted,
We believe the adopted Ordinance satisfies the first two bullets. Does Commerce have
concern with the adopted regulations or is this simply an informative statement?
Impact fee regulations were previously updated through 2025-S-1 183 and 2025-S-8182.
Thanks,
Jim
James C. Fisk, AICP, CNU-A
Principal Planner
City of Port Orchard
216 Prospect St
Port Orchard, WA 98366
360.874.5533
Please make official submittals to the Permit Center at permitcenterPportorchardwa.gov to ensure maintenance of
an accurate Record.
From: Vanegas, Ted (COM) <ted.vanegasl@commerce.wa.gov>
Sent: Thursday, July 24, 2025 8:02 AM
To: Jim Fisk <ifisklc�portorchardwa.gov>
5
Cc: Porter, Ethan (COM)<ethan.porter(@commerce.wa.gov>; Vespier, Lilith (COM)
<Iilith.vespier(@commerce.wa.gov>
Subject: Commerce 60 -day Review (2025-S-9586)
Hi James,
Thank you for submitting the city's adopted development regulation amendments. Our team
has reviewed the submittal and does have a couple of comments/suggestions for you to
consider:
• Note that, per RCW 36.70A.635(6)(a), cities may require administrative design review
for middle housing, even if it is more restrictive than design review required for single
family homes. However, we suggest that any required design review be no more
restrictive for middle housing as for single family housing, to reduce barriers to middle
housing development.
• Please note that middle housing state law exempts certain areas from middle
housing requirements. The environmental and development review process will
need to be the same for middle housing as single-family residential. Language
meeting these requirements are often elsewhere in code. It is recommended to
review and ensure this is included for your jurisdiction.
• No impact fees or fee schedule provided within submittal. Commented on
previous review (2025-S-8320) about ADU impact fee requirements.
Please don't hesitate to contact me if you have any questions or concerns about the comment above or
the review process in general.
Thanks,
-Ted
Ted Vanegas I Senior Planner
Growth Management Services I Washington State Department of Commerce
Olympia, WA
Phone: 360-280-0320
Growth Management — Washington State Department of Commerce
www.commerce.wa.gov I Facebook I Twitter I Linkedln I Subscribe
Email communications with state employees are public records and may be subject to disclosure,
pursuant to Ch. 42.56 RCW
6
ORDINANCE NO. _-25
AN ORDINANCE OF THE CITY OF PORT ORCHARD, WASHINGTON, ADOPTING A NEW
CHAPTER 3.48 (MULTIFAMILY PROPERTY TAX EXEMPTION) OF THE PORT ORCHARD
MUNICIPAL CODE; PROVIDING FOR SEVERABILITY AND CORRECTIONS; AND
ESTABLISHING AN EFFECTIVE DATE.
WHEREAS, the city previously offered a Multifamily Tax Exemption (MFTE) program as
codified in POMC 3.48 but repealed the program in 2023 by passing ordinance 026-23;
WHEREAS, after studying the options for providing tax incentives to encourage the
development of multi -family housing, the City Council wishes to adopt a new and revised MFTE
code; and
WHEREAS, the City Council wishes to encourage increased residential opportunities,
within those areas of the city designated as residential targeted areas in Figure 1 of the
proposed POMC 3.48; and
WHEREAS, the City Council wishes to further the City's goals of redevelopment and
additional, affordable residential units within the City's downtown area, which is likely to have
higher costs for development and redevelopment due to the nature of building below -grade
parking and building on shoreline fill; and
WHEREAS, the City Council wishes to stimulate rehabilitation and redevelopment of
existing vacant and underutilized buildings and properties for multifamily housing in
designated residential targeted areas and centers, to increase and improve housing
opportunities, including affordable housing; and
WHEREAS, the City Council wishes to encourage the development of higher value
residential projects than those currently being constructed by providing incentives with the
aim of increasing long term property tax revenues; and
WHEREAS, the City Council wishes to adopt requirements for 12 -year tax exemptions
to establish standards to be met and to obtain a greater percentage of housing that is more
affordable than previously required, in order to maximize public benefit; and
WHEREAS, the City Council wishes to adopt requirements for 8 -year tax exemptions
to establish certain performance and project value standards, in order to maximize public
benefit; and
11092614.2 - 366922 - 0021
7
Ordinance No. _-25
Page 2 of 15
WHEREAS, on July 6, 2020, the City Council's Land Use Committee reviewed the
amendments to Chapter POMC 3.48, and recommended that they be forwarded to the full
City Council for review and approval; and
WHEREAS, on July 8, 2020, the City submitted the proposed amendments to POMC
Chapter 3.48 to the Department of Commerce along with a 60 -day request for review; and
WHEREAS, on July 17, 2020, the City's SEPA official issued a determination of non -
significance for the proposed amendments to POMC Chapter 3.48, and there have been no
appeals; and
WHEREAS, on September 15, 2020, the City Council reviewed the amendments at its
work-study meeting, and directed staff to bring the amendments forward for Council
adoption with certain changes; and
WHEREAS, the City Council, after careful consideration of all public comment and of
the Ordinance, finds that this Ordinance is consistent with the City's Comprehensive Plan and
development regulations, the Growth Management Act, Chapter 36.70A RCW, and that the
amendments herein are in the best interests of the residents of the City; NOW, THEREFORE,
THE CITY COUNCIL OF THE CITY OF PORT ORCHARD, WASHINGTON, DO ORDAIN AS
FOLLOWS:
SECTION 1. Findings and Recitals. The recitals set forth above are hereby adopted and
incorporated as findings in support of this Ordinance.
SECTION 2. A new Chapter 3.48 of the Port Orchard Municipal Code is hereby adopted
to read as follows:
Sections:
3.48.010 Purpose.
3.48.020 Definitions.
3.48.030 Residential targeted areas — Criteria — Designation.
3.48.040 Residential targeted areas — Types 1 through 3
3.48.040 Terms of the tax exemption.
3.48.050 Project eligibility.
3.48.060 Application procedure.
3.48.070 Application review — Issuance of conditional certificate — Denial — Appeal.
11092614.2 - 366922 - 0021
8
Ordinance No. _-25
Page 3 of 15
3.48.080
Extension of conditional certificate.
3.48.090
Application for final certificate.
3.48.100
Issuance of final certificate.
3.48.110
Annual compliance review — Reporting.
3.48.120
Cancellation of tax exemption.
3.48.130
Conflict of provisions.
3.48.010 Purpose.
As provided for in Chapter 84.14 RCW, the purpose of this chapter is to provide limited
exemptions from ad valorem property taxation for multifamily housing in designated residential
targeted areas to:
(1) Encourage increased housing opportunities in residential and mixed -use projects, including
affordable housing units, middle housing, infill housing, mixed -use shopfront buildings containing
housing, and apartments [reference density and or height], within areas of the city designated
by the city council as residential targeted areas; and/or commented [NB1]: Additional anguage added to purpose
statement.
(2) Stimulate new construction or rehabilitation of existing vacant and underutilized buildings for
multifamily housing in designated residential targeted areas to increase and improve housing
opportunities, including affordable housing; and/or
(3) Accomplish the planning goals required under the Growth Management Act, Chapter 36.70A
RCW, as implemented by the city's comprehensive plan.
3.48.020 Definitions.
When used in this chapter, the following terms shall have the following meanings, unless the
context indicates otherwise:
(1) "Affordable housing" means the definition provided for in RCW 84.14.010.
(2) "Department" means the city department of community development.
(3) "Director" means the director of the department of community development, or designee.
(4) "Fair market rent" means the federal department of housing and urban development's
estimate of what a household seeking a modest rental home in a short amount of time can expect
to pay for rent and utilities in the current market, as updated annually.
(5) "Household" means the definition provided for in RCW 84.14.010.
(6) "Median family income" means the median family income for the Bremerton -Silverdale
Metropolitan Statistical Area, as calculated by the federal department of housing and urban
11092614.2 - 366922 - 0021
9
Ordinance No. _-25
Page 4 of 15
development and updated annually.
(7) "Middle Housing" means the definition provided for in POMC 20.12 for buildings consisting
of at least four (4) dwelling units.
(8) "Mixed -use shopfront building" means the definition provided in POMC 20.32.
(9) "Multifamily housing" (for the purposes of this chapter) means a building having 4 or more
dwelling units not designed or used as transient accommodations and not including hotels and
motels. Multifamily units may result from new construction or rehabilitated or conversion of
vacant, underutilized, or substandard buildings to multifamily housing.
(10) "Owner" means the definition provided for in RCW 84.14.010.
(11) "Permanent residential occupancy" means the definition provided for in RCW 84.14.010.
(12) "Rehabilitation improvements" means the definition provided for in RCW 84.14.010.
(13) "Residential targeted area" means the definition provided for in RCW 84.14.010 and the
area(s) that have been so designated by the city council pursuant to this chapter.
(14) "Substantial compliance" means the definition provided for in RCW 84.14.010.
(15) "Urban center" means the definition provided for in RCW 84.14.010.
3.48.030 Residential targeted areas — Criteria — Designation.
(1) Following notice and public hearing as prescribed in RCW 84.14.040 of the city council's
intention of designating a residential targeted area, the city council may, in its sole discretion,
designate one or more residential targeted areas. Each residential targeted area must meet the
following criteria, as determined by the city council:
(a) The area is within an urban center; and
(b) The area lacks sufficient available, desirable, and convenient residential housing,
including affordable housing, to meet the needs of the public who would be likely to live in
the urban center if affordable, desirable, attractive, and livable residences were available;
and
(c) Providing additional housing opportunities in the area will assist in achieving one or
more of the purposes of this chapter.
(2) In designating a residential targeted area, the city council may also consider other factors
including, but not limited to:
11092614.2-366922-0021
Commented [NB2]: New.
Commented [NB3]: Previously was a definition for mixed -use
development. Now this references a building type in POMC 20.32.
Commented [NB4]: Previously referenced centers as designated
in the comprehensive plan.
Commented [NB5]: Removed previous reference to affordable
housing.
10
Ordinance No. _-25
Page 5 of 15
(a) Additional housing in the residential targeted area will attract and maintain an increase
in the number of permanent residents;
(b) An increased permanent residential population in the residential targeted area will help
to achieve the planning goals mandated by the Growth Management Act under Chapter
36.70A RCW, as implemented through the city's current and future comprehensive plans;
(c) Encouraging additional housing in the residential targeted area is consistent with public
transportation plans; or
(d) Additional housing may contribute to revitalization of a distressed neighborhood or area
within the city.
(3) At any time the city council may, by ordinance, and in its sole discretion, amend or rescind
the designation of a residential targeted area pursuant to the same procedural requirements as
set forth in this chapter for original designation.
3.48.040 Designated residential targeted areas.
In accordance with section 3.48.030, the City Council has designated a residential targeted area,
as provided below and as shown on Figure 1. Figure 1 is provided for planning purposes only, and
all development that is proposed to qualify for tax exemption within these areas must meet the
criteria of this chapter, as well as all other relevant City standards, including but not limited to:
the comprehensive plan, Unified Development Code, building code, public works standards,
critical areas regulations and the shoreline master program. The project must also comply with
any other standards and guidelines adopted by the city council, including but not limited to those
listed in POMC 3.48.060. Inclusion within the residential targeted areas does not guarantee the
ability to obtain approval under this chapter. Property within the residential targeted areas that
does not have the zoning or comprehensive plan designation that allows a project to satisfy the
minimum reauirements of this chapter. or that does not otherwise meet the reauirements of this
chapter, may not utilize this program.
Figure 1. Residential Target Areas.
[Insert new map once finalized]
3.48.050 Terms of the tax exemption.
(1) Duration of Exemption. The value of new housing construction, conversion, and rehabilitation
improvements qualifying under this chapter is exempt from ad valorem property taxation, as
11092614.2-366922-0021
Commented [NB6]: Removed reference to affordable housing.
Commented [NB7]: Revised from three different maps to a
single map.
11
Ordinance No. _-25
Page 6 of 15
follows:
(a) For both 8 -year and 12 -year exemptions, the exemption begins on January 151 of the year
immediately following the calendar year of issuance of the tax exemption certificate.
(b) For 12 -year exemptions, the number of residential units identified to meet the
requirements for an affordable housing component per 3.48.040(1)(c) shall continue to be made
available for the length of the exemption period.
(iii) The mix and configuration of housing units (e.g., studio, one -bedroom, two -
bedroom) used to meet the requirement for affordable units shall be substantially
proportional to the mix and configuration of the total housing units in the project.
(iv) When a project includes more than one building with multifamily housing units, all
of the affordable housing units required in this subsection must not be located in the
same building.
(2) Limits on Exemption. The exemption does not apply:
(a) To the value of land or to the value of non -housing -related improvements not qualifying
under this chapter.
(b) In the case of rehabilitation of existing buildings, to the value of improvements
constructed prior to submission of the completed application required under this chapter.
(c) To increases in assessed valuation made by the Kitsap County Assessor on nonqualifying
portions of building or other improvements and value of land nor to increases made by lawful
order of a county board of equalization, the Department of Revenue, or Kitsap County, to a
class of property throughout the county or specific area of the county to achieve the
uniformity of assessment or appraisal required by law.
(3) Conclusion of Exemption. At the conclusion of the exemption period, the new or rehabilitated
housing cost shall be considered as new construction for the purposes of Chapter 84.55 RCW.
3.48.060 Project eligibility.
A proposed multifamily housing project must meet all of the following requirements for
consideration for a property tax exemption:
(1) Location. The project must be located within a residential targeted area as provided in POMC
3.48.040.
(2) Tenant Displacement Prohibited. The project must not displace existing residential tenants of
11092614.2 - 366922 - 0021
12
Ordinance No. _-25
Page 7 of 15
structures that are proposed for redevelopment. If the property proposed to be rehabilitated is
not vacant, an applicant shall provide each existing tenant housing of comparable size, quality,
and price and a reasonable opportunity to relocate.
(3) Noncompliance with Building Codes. Existing dwelling units proposed for rehabilitation must
fail to comply with one or more standards of the applicable state or city building codes.
(4) Size of Project. The new, converted, or rehabilitated multiple -unit housing must provide for a
minimum of 50 percent of the space (excluding structured parking) for permanent residential
occupancy. The project, whether new, converted, or rehabilitated multiple -unit housing, must
include at least 10 units of multifamily housing within a residential structure or as part of an
urban development, with an exception for middle housing located on lots of less than 15,000
square feet consistent with subsection 6(c) below. In the case of existing multifamily housing that
is occupied or which has not been vacant for 12 months or more, the multifamily housing project
must also provide for a minimum of four additional multifamily units for a total project of at least
10 units including the four additional units. Existing multifamily housing that has been vacant for
12 months or more does not have to provide additional units.
(5) Proposed Completion Date. New construction of multifamily housing and rehabilitation
improvements must be completed within three years from the date of approval of the
application. "Completed" for this purpose means that a certificate of occupancy has been issued
for all of the improvements prior to the expiration of the three-year period or prior to expiration
of any extension period eranted in accordance with POMC 3.48.090.
(6) Project performance standards and form. To qualify for a limited exemption from ad valorem
property taxation pursuant to this chapter, the proposed project must meet one of the following
performance standards and forms in addition to meetine all other reauirements of this chanter.
(a) The multi -family housing project must be in a mixed -use shopfront building containing
commercial ground floor uses measuring at least 4,000 square feet or 40% of the building's
footprint. whichever is less: or
(b) The multi -family housing project must be in a building containing at least 4 stories of
residential units and achieving at least 40 units per net acre (gross acreage, less critical areas and
associated buffers). All portions of buildings must contain 4 -stories of multi -family units. Where
buildings step down following topography, each portion of the building must contain 4 -stories of
multi -family units: or
(c) The multi -family project must provide middle housing and be on a parcel/lot measuring less
than 15,000 square feet with between 4-12 multi -family units; or
11092614.2 - 366922 - 0021
13
Ordinance No. _-25
Page 8 of 15
(d) Projects that will provide 100% of any on -site parking below grade.
(7) Additional performance standards for 12 -year tax exemption. To qualify for a 12 -year
limited exemption from ad valorem property taxation, and affordable housing component is
required:
(a) A minimum of 20 percent of all residential units in the development shall be rented for at
least 25 percent below fair market rent for 12 years, to tenants whose household annual
income is:
• At or below 40% of median family income, for housing units in congregate
residences or small efficiency dwelling units:
• At or below 65% of median family income for one -bedroom units;
• At or below 75% of median family income for two -bedroom units; and
• At or below 80% of median family income for three -bedroom and
units.
(b) If calculations for the minimum 20 percent of the residential units required under subsection
1 of this section result in a fraction, then the minimum number of residential units required to
meet the affordable housing requirement shall be rounded up to the next whole number.
(c) For the purpose of administering this chapter, the Department of Community Development
shall publish annual rent limits and a utility allowance which may be subtracted from the rent
limits required by this chapter. This annual allowance shall be published by July 1 annually,
provided that all relevant data is made available by the Department of Housing and Urban
Development (HUD). If publication of HUD data is delayed, the prior year's limits shall remain in
effect until new data is released. Project owners may choose to include utilities (other than
telephone) in the rent charged or may deduct the annually released utility allowance from the
maximum allowed rent.
3.48.070 Application procedure.
A property owner who wishes to propose a project for a tax exemption shall complete the
following procedures:
(1) The exemption application provided by the city shall be completed and filed with the
department prior to issuance of a building permit for the project. The completed application shall
11092614.2-366922-0021
Commented [NBB]: New.
Commented [NB9]: Moved from another section.
Commented [NB10]: Increased from 10%
14
Ordinance No. _-25
Page 9 of 15
be accompanied by the application fee as authorized by RCW 84.14.080 and as set forth in the
city's current fee resolution.
(2) The exemption application shall contain and require such information as deemed necessary
by the director, including:
(a) A brief written description of the project, including timing and construction schedule,
setting forth the grounds for the exemption.
(b) Floor and site plans of the proposed project, which may be revised by the owner, provided
such revisions are made and presented to the director prior to the city's final action on the
exemption application.
(c) For rehabilitation projects, the applicant shall provide a report prepared by a registered
architect identifying property noncompliance with current building codes. This report shall
identify specific code violations and must include supporting data that satisfactorily explains
and proves the presence of a violation. Supporting data must include a narrative and such
graphic materials as needed to support this application. Graphic materials may include, but
are not limited to, building plans, building details, and photographs.
(d) If applying for a 12 -year exemption, it shall include information describing how the
applicant will comply with the affordability requirements set forth in POMC 3.48.040(1)(c).
(e) A statement from the owner acknowledging the potential tax liability when the project
ceases to be eligible under this chapter.
(f) An affidavit signed by the owner stating the occupancy record of the property for a period
of 12 months prior to filing the application.
(g) Verification of the correctness of the information submitted by the owner's signature and
affirmation made under penalty of perjury under the laws of the state of Washington.
3.48.080 Application review — Issuance of conditional certificate — Denial — Appeal.
(1) Director's Decision. The director may certify as eligible an application which is determined to
comply with all applicable requirements of this chapter. A decision to approve or deny an
application shall be made within 90 calendar days of receipt of a complete application.
(2) Approval of Application — Contract Required. If an application is approved, the applicant shall
enter into a contract with the city, regarding the terms and conditions of implementation of the
project, and pursuant to the following:
(a) The contract shall be subject to approval by the city council, in the form of a resolution,
11092614.2 - 366922 - 0021
15
Ordinance No. _-25
Page 10 of 15
regarding the terms and conditions of the project and eligibility for exemption under this
chapter. This contract shall be recorded against the property and will constitute a covenant
running with the land and shall be binding on the assigns, heirs, and successors of the
applicant.
(b) For any development project including owner -occupied units, the contract with the city
shall also require that an owners' association organized under RCW 64.34.300 be formed for
all owner -occupied units within the development, for at least the length of the exemption
period granted, to assume the responsibility for collecting from all individual unit owners the
information and documents required to complete the annual reporting requirements and for
filing the required annual report with the city for each of the individual homeowners
pursuant to POMC 3.48.120.
(c) Amendment of Contract. Within three years of the date from the city council's approval
of the contract, an owner may request an amendment(s) to the contract by submitting a
request in writing to the director. The fee for an amendment is as set forth in the city's
current fee resolution. The director shall have authority to approve minor changes to the
contract that are reasonably within the scope and intent of the contract approved by the city
council, as solely determined by the director. Amendments that are not reasonably within
the scope and intent of the approved contract, as solely determined by the director, shall be
submitted to the city council for review and approval. The date for expiration of the
conditional certificate shall not be extended by contract amendment unless all the conditions
for extension set forth in POMC 3.48.090 are met.
(3) Issuance of Conditional Certificate. Upon city council approval of the contract required under
subsection (2) of this section, the director shall issue a conditional certificate of acceptance of tax
exemption. The conditional certificate shall expire three years from the date of city council
approval unless an extension is granted as provided in this chapter.
(4) Denial of Application. If an application is denied, the director shall state in writing the reasons
for denial and shall send notice to the applicant at the applicant's last known address within 10
calendar days of issuance of the denial.
(5) Appeal. Per RCW 84.14.070, an applicant may appeal a denial to the city council within 30
calendar days of receipt of the denial by filing a complete appeal application and fee, as set forth
in the city's current fee resolution, with the director. The appeal before the city council will be
based on the record made before the director. The director's decision shall be upheld unless the
applicant can show that there is no substantial evidence on the record to support the director's
decision. The city council's decision on appeal will be final.
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Ordinance No. _-25
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3.48.090 Extension of conditional certificate.
(1) Extension. The conditional certificate and time for completion of the project may be extended
by the director for a period not to exceed a total of 24 consecutive months. To obtain an
extension, the applicant must submit a written request with a fee, as set forth in the city's current
fee resolution, stating the grounds for the extension. An extension may be granted if the director
determines that:
(a) The anticipated failure to complete construction or rehabilitation within the required time
period is due to circumstances beyond the control of the owner; provided, that financial
hardship, regardless of the cause or reason, shall not be considered by the director as a
circumstance beyond the control of the owner in order to grant an extension;
(b) The owner has been acting and could reasonably be expected to continue to act in good
faith and with due diligence; and
(c) All the conditions of the original contract (and as amended) between the applicant and
the city will be satisfied upon completion of the project.
(2) Denial of Extension. If an extension is denied, the director shall state in writing the reason for
denial and shall send notice to the applicant's last known address within 10 calendar days of
issuance of the denial.
(3) Appeal. An applicant may appeal the denial of an extension to the hearing examiner within
14 calendar days of receipt of the denial by filing a complete appeal application and appeal fee
with the director. The appeal before the hearing examiner shall be processed as a closed record
hearing. No appeal to the city council is provided from the hearing examiner's decision.
3.48.100 Application for final certificate.
Upon completion of the improvements agreed upon in the contract between the applicant and
the city and upon issuance of a temporary or permanent certificate of occupancy, the applicant
may request a final certificate of tax exemption by filing with the director such information as
the director may deem necessary or useful to evaluate the eligibility for the final certificate,
including the following:
(1) A statement of expenditures made with respect to each multifamily housing unit and the total
expenditures made with respect to the entire property;
(2) A description of the completed work and a statement of qualification for the exemption;
(3) The total monthly rent or total sale amount of each multifamily housing unit rented or sold to
date;
11092614.2 - 366922 - 0021
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Ordinance No. _-25
Page 12 of 15
(4) A statement that the work was completed within the required three-year period or any
authorized extension;
(5) If a 12 -year exemption, information on the applicant's compliance with the affordability
requirements of this chapter; and
(6) Any additional information requested by the city pursuant to meeting any reporting
requirements under Chapter 84.14 RCW.
3.48.110 Issuance of final certificate.
(1) Director's Decision. Within 30 calendar days of receipt of all materials required for a final
certificate, the director shall determine whether the specific improvements satisfy the
requirements of the contract, application, and this chapter.
(2) Granting of Final Certificate. If the director determines that the project has been completed
in accordance with this chapter and the contract between the applicant and the city, and has
been completed within the authorized time period, the city shall, within 10 calendar days of the
expiration of the 30 -day review period above, file a final certificate of tax exemption with the
Kitsap County assessor. The director is authorized to cause to be recorded, at the owner's
expense, in the real property records of the Kitsap County department of records, the contract
with the city, as amended if applicable, and such other document(s) as will identify such terms
and conditions of eligibility for exemption under this chapter as the director deems appropriate
for recording, including requirements under this chapter relating to affordability of units.
(3) Denial of Final Certificate. The director shall notify the applicant in writing that a final
certificate will not be filed if the director determines that:
(a) The improvements were not completed within the authorized time period;
(b) The improvements were not completed in accordance with the contract between the
applicant and the city; or
(c) The owner's property is otherwise not qualified under this chapter.
(4) Appeal. An applicant may appeal a denial of a final certificate to the hearing examiner within
14 calendar days of issuance of the denial of a final certificate by filing a complete appeal
application and appeal fee with the director. The appeal before the hearing examiner shall be
processed as a closed record hearing. No appeal to the city council is provided from the hearing
examiner's decision.
11092614.2 - 366922 - 0021
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Ordinance No. _-25
Page 13 of 15
3.48.120 Annual compliance review — Reporting.
(1) Within 30 calendar days after the first anniversary of the date of filing the final certificate of
tax exemption and each year for the tax exemption period, the property owner shall be required
to file a notarized declaration with the director indicating the following:
(a) A statement of occupancy and vacancy of the multifamily units during the previous 12
months;
(b) A certification by the owner that the property has not changed use and continues to be
in compliance with the contract with the city and the applicable requirements of this chapter;
(c) A description of changes or improvements to the property made after the city's issuance
of the final certificate of tax exemption;
(d) The total monthly rent of each multifamily housing unit rented or the total sale amount
of each unit sold during the 12 months ending with the anniversary date;
(e) A breakdown of the number, type, and specific multifamily housing units rented or sold
during the 12 months ending with the anniversary date;
(f) If granted a 12 -year exemption, information demonstrating the owner's compliance with
the affordability requirements of this chapter, including, but not limited to, the income of
each renter household at the time of initial occupancy or the income of each purchaser of
owner -occupied units at the time of purchase;
(g) The value of the tax exemption for the project; and
(h) Any additional information requested by the city pursuant to meeting any reporting
requirements under Chapter 84.14 RCW.
(2) City staff may also conduct on -site verification of the declaration and reporting required under
this section. Failure to submit the annual declaration and report may result in cancellation of the
tax exemption pursuant to this chapter and shall result in a review of the exemption per RCW
84.14.110.
(3) If the city issues final tax exemption certificates pursuant to this chapter, the director shall
submit the report required by RCW 84.14.100 to the state Department of Commerce by
December 31st of each year.
3.48.130 Cancellation of tax exemption.
(1) The director may cancel a tax exemption on a property if he/she determines any of the
following:
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Ordinance No. _-25
Page 14 of 15
(a) The owner is not complying with the terms of the contract or this chapter;
(b) The use of the property is changed or will be changed to a use that is other than
residential;
(c) The project violates applicable zoning requirements, land use regulations, building, or fire
code requirements; or
(d) The owner fails to submit the annual declaration and report specified in P0MC 3.48.120.
(2) If the owner intends to convert the multifamily housing to another use, the owner shall notify
the director and the Kitsap County assessor in writing within 60 calendar days of the change in
use.
(3) Cancellation may occur in conjunction with the annual review or at any such time
noncompliance has been determined.
(4) Upon cancellation of the tax exemption, additional taxes, interest, and penalties shall be
imposed on the property, and a priority lien may be placed on the land, pursuant to state law.
(5) Notice of Cancellation. Upon determining that a tax exemption is to be canceled, pursuant to
RCW 84.14.110(2), the director shall notify the owner by mail, return receipt requested.
(6) Appeal of Cancellation. The owner may appeal the determination of cancellation to the
hearing examiner by filing a notice of appeal and appeal fee with the city clerk within 30 calendar
days of the date of the notice of cancellation, specifying the factual and legal basis for the appeal.
The appeal shall be heard by the hearing examiner as a closed record hearing. No appeal to the
city council is provided from the hearing examiner's decision.
3.48.140 Conflict of provisions.
If any provision of this chapter is in legal conflict with the provisions of Chapter 84.14 RCW, as
currently adopted or hereafter amended, the provisions of Chapter 84.14 RCW shall apply as if
set forth in this chapter.
SECTION 3. Corrections. Upon the approval of the city attorney, the city clerk and/or
code publisher is authorized to make any necessary technical corrections to this ordinance,
including but not limited to the correction of scrivener's/clerical errors, references, ordinance
numbering, section/subsection numbers, and any reference thereto.
SECTION 4. Severability. If any section, subsection, paragraph, sentence, clause, or
phrase of this ordinance is declared unconstitutional or invalid for any reason, such decision shall
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Ordinance No. _-25
Page 15 of 15
not affect the validity of the remaining parts of this ordinance.
SECTION 5. Effective Date. This ordinance shall be published in the official newspaper of
the city and shall take full force and effect five (5) days after the date of publication. A summary
of this ordinance in the form of the ordinance title may be published in lieu of publishing the
ordinance in its entirety.
PASSED by the City Council of the City of Port Orchard, APPROVED by the Mayor and
attested by the City Clerk in authentication of such passage this _day of
202 .
Robert Putaansuu, Mayor
ATTEST:
Brandy Wallace, MMC, City Clerk
APPROVED AS TO FORM: Sponsored by:
Charlotte A. Archer, City Attorney Scott Diener, Council Member
PUBLISHED:
EFFECTIVE DATE:
11092614.2 - 366922 - 0021
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CERTIFICATION OF ENROLLMENT
ENGROSSED SUBSTITUTE HOUSE BILL 1998
Chapter 180, Laws of 2024
68th Legislature
2024 Regular Session
CO -LIVING HOUSING
EFFECTIVE DATE: June 6, 2024
Passed by the House March 4, 2024
Yeas 97 Nays 0
LAURIE JINKINS
Speaker of the House of
Representatives
Passed by the Senate February 22,
2024
Yeas 44 Nays 4
DENNY HECK
President of the Senate
Approved March 19, 2024 9:46 AM
JAY INSLEE
Governor of the State of Washington
CERTIFICATE
I, Bernard Dean, Chief Clerk of the
House of Representatives of the
State of Washington, do hereby
certify that the attached is
ENGROSSED SUBSTITUTE HOUSE BILL
1998 as passed by the House of
Representatives and the Senate on
the dates hereon set forth.
BERNARD DEAN
Chief Clerk
FILED
March 19, 2024
Secretary of State
State of Washington
23
ENGROSSED SUBSTITUTE HOUSE BILL 1998
AS AMENDED BY THE SENATE
Passed Legislature - 2024 Regular Session
State of Washington 68th Legislature 2024 Regular Session
By House Housing (originally sponsored by Representatives Gregerson,
Sarkis, Leavitt, Rule, Ryu, Reed, Morgan, Fitzgibbon, Berry, Duerr,
Bronoske, Ramos, Ramel, Bateman, Peterson, Chambers, Taylor, Simmons,
Ormsby, Graham, Callan, Macri, Donaghy, Doglio, Mena, Nance,
Riccelli, Cortes, Santos, Pollet, and Davis)
READ FIRST TIME 01/15/24.
1 AN ACT Relating to legalizing inexpensive housing choices through
2 co -living housing; adding a new section to chapter 36.70A RCW; and
3 creating a new section.
4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
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NEW SECTION. Sec. 1. (1) The legislature makes the following
findings:
(a) Washington state is experiencing a housing affordability
crisis;
(b) Co -living housing is a type of housing that can provide
rental homes affordable to people with moderate to low incomes
without requiring any public funding, and rents in newly constructed,
market -rate co -living housing in the Puget Sound region can be
affordable to people with incomes as low as 50 percent of area median
income;
(c) Co -living housing is a residential development with sleeping
units that are independently rented and provide living and sleeping
space, in which residents share kitchen facilities with residents of
other units in the building;
(d) Co -living housing historically provided a healthy inventory
of rental homes on the lowest rung of the private housing market,
comprising up to 10 percent of housing in some cities;
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(e) Starting in the mid -20th century, local governments began
adopting restrictive zoning and other rules that increasingly
prohibited co -living housing, or made it impractical to build or
operate, and its numbers plummeted;
(f) Today, many cities and counties outright prohibit co -living
housing on most of their residential land, or they enforce any number
of restrictions that make it effectively impossible to build new co -
living housing or to convert existing buildings into co -living
housing;
(g) Co -living housing provides options for people who:
(i) Wish to lower their housing expenses by paying less for a
smaller home;
(ii) Prefer a living arrangement with shared community spaces
that facilitate social connections;
(iii) Wish to trade off location for space and, by living in a
small home, also get to live in a high opportunity neighborhood they
could not otherwise afford; or
(iv) Want a low-cost, more private alternative to having a
roommate in a traditional rental;
(h) Many communities throughout Washington face a severe shortage
of workforce housing, and co -living housing provides housing
affordable to that income range and below, without public funding;
(i) Co -living housing reduces pressure on the limited amount of
publicly funded affordable housing by providing housing that is
affordable to lower income residents who might otherwise wait years
for subsidized housing;
(j) Co -living housing works best for single -person households,
but the housing for singles that it provides reduces demand for
family -sized rentals from singles who would otherwise group together
to rent large homes;
(k) Co -living housing provides a good option for seniors,
especially those who want to downsize, or those who desire a living
arrangement that is more social than a standard apartment. When
located in walkable neighborhoods, co -living housing gives mobility
options to seniors who can no longer drive;
(1) Co -living housing is well -suited for the conversion of office
buildings to housing, because it typically requires less plumbing and
fixtures for kitchens and bathrooms;
p. 2
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(m) Co -living housing is well -suited for very low-income people,
supportive and recovery housing, and "housing first" homes for the
formerly homeless;
(n) State building codes have established minimum sizes and other
standards to ensure that co -living housing meets modern health and
safety standards;
(o) Creating co -living housing near transit hubs, employment
centers, and public amenities can help the state achieve its
greenhouse gas reduction goals by increasing walkability, shortening
household commutes, curtailing sprawl, and reducing the pressure to
develop natural and working lands; and
(p) Co -living housing, because the units are small, is inherently
more energy efficient than standard apartments, both saving residents
money and reducing the state's energy demand.
(2) Therefore, the legislature intends to allow the creation of
co -living housing as a means to address the need for additional
affordable housing options for a diversity of Washington residents.
NEW SECTION. Sec. 2. A new section is added to chapter 36.70A
RCW to read as follows:
(1) Cities and counties planning under this chapter must allow
co -living housing as a permitted use on any lot located within an
urban growth area that allows at least six multifamily residential
units, including on a lot zoned for mixed use development.
(2) A city or county subject to the provisions of this section
may not require co -living housing to:
(a) Contain room dimensional standards larger than that required
by the state building code, including dwelling unit size, sleeping
unit size, room area, and habitable space;
(b) Provide a mix of unit sizes or number of bedrooms; or
(c) Include other uses.
(3)(a) A city or county subject to the provisions of this section
also may not require co -living housing to:
(i) Provide off-street parking within one-half mile walking
distance of a major transit stop; or
(ii) Provide more than 0.25 off-street parking spaces per
sleeping unit.
(b) The provisions of (a) of this subsection do not apply:
(i) If a city or county submits to the department an empirical
study prepared by a credentialed transportation or land use planning
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expert that clearly demonstrates, and the department finds and
certifies, that the application of the parking limitations of (a) of
this subsection will be significantly less safe for vehicle drivers
or passengers, pedestrians, or bicyclists than if the jurisdiction's
parking requirements were applied to the same location. The
department must develop guidance to assist cities and counties on
items to include in the study; or
(ii) To portions of cities within a one -mile radius of a
commercial airport in Washington with at least 9,000,000 annual
enplanements.
(4) A city or county may not require through development
regulations any standards for co -living housing that are more
restrictive than those that are required for other types of
multifamily residential uses in the same zone.
(5) A city or county may only require a review, notice, or public
meeting for co -living housing that is required for other types of
residential uses in the same location, unless otherwise required by
state law including, but not limited to, shoreline regulations under
chapter 90.58 RCW.
(6) A city or county may not exclude co -living housing from
participating in affordable housing incentive programs under RCW
36.7 0A. 540.
(7) A city or county may not treat a sleeping unit in co -living
housing as more than one -quarter of a dwelling unit for purposes of
calculating dwelling unit density.
(8) A city or county 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 or county
makes a finding, based on facts, that the connection fees should
exceed the one-half threshold.
(9) (a) A city or county subject to the requirements of this
section must adopt or amend by ordinance and incorporate into their
development regulations, zoning regulations, and other official
controls the requirements of this section to take effect no later
than December 31, 2025.
(b) In any city or county that has not adopted or amended
ordinances, regulations, or other official controls as required under
this section, the requirements of this section supersede, preempt,
and invalidate any conflicting local development regulations.
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(10) Any action taken by a city or county to comply with the
requirements of this section is not subject to legal challenge under
this chapter or chapter 43.21C RCW.
(11) For the purposes of this section, the following definitions
apply:
(a) "Co -living housing" means a residential development with
sleeping units that are independently rented and lockable and provide
living and sleeping space, and residents share kitchen facilities
with other sleeping units in the building. Local governments may use
other names to refer to co -living housing including, but not limited
to, congregate living facilities, single room occupancy, rooming
house, boarding house, lodging house, and residential suites.
(b) "Major transit stop" means:
(i) A stop on a high capacity transportation system funded or
expanded under the provisions of chapter 81.104 RCW;
(ii) Commuter rail stops;
(iii) Stops on rail or fixed guideway systems, including
transitways;
(iv) Stops on bus rapid transit routes or routes that run on high
occupancy vehicle lanes; or
(v) Stops for a bus or other transit mode providing actual fixed
route service at intervals of at least 15 minutes for at least five
hours during the peak hours of operation on weekdays.
Passed by the House March 4, 2024.
Passed by the Senate February 22, 2024.
Approved by the Governor March 19, 2024.
Filed in Office of Secretary of State March 19, 2024.
--- END ---
p. 5
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