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HomeMy WebLinkAboutHAP_IssuePaper_CommerceNotification - 090221 DEPARTMENT OF COMMUNITY & ECONOMIC DEVELOPMENT M E M O R A N D U M DATE: September 2, 2021 TO: Randy Corman, Council President Members of Renton City Council VIA: Armondo Pavone, Mayor FROM: C.E. “Chip” Vincent, CED Administrator x6588 STAFF CONTACT: Hannah Bahnmiller, Housing Programs Manager x7262 SUBJECT: Housing Action Plan Adoption SUMMARY The City of Renton received a $100,000 grant from the Department of Commerce in 2019 to create a Housing Action Plan by June 15th, 2021. Staff anticipates the draft Housing Action Plan will be finalized in the near term and would like to present the draft to the public for additional comment at a public hearing before the Planning Commission. BACKGROUND: In 2019, the City of Renton received a grant for $100,000 from the Washington State Department of Commerce to create a Housing Action Plan. The grant is administered through the Urban Residential Building Capacity Grant Program, which was authorized and funded by the State Legislature in 2019 (E2SHB 1923) to help cities increase residential density through expanded housing options. The Housing Action Plan’s scope has been divided into two distinct actions – a South King County Subregional Housing Action Framework and the Renton Housing Action Plan. SoKiHo Subregion Housing Action Framework The Subregional Housing Action Framework is a coordination effort between major South King County cities to develop sub-regional level data and strategies to support each jurisdiction’s Housing Action Plans. In an effort known as “SoKiHo” (South King Housing), Auburn, Burien, Federal Way, Kent, Renton, and Tukwila came together to pool grant funding for a collaborative effort to develop a sub-regional housing framework to help guide individual Housing Action Plans. This work aimed to 1) understand the current and future subregional housing market and household demographics, 2) evaluate existing and potential policies’ impact in the sub- region, and 3) lay the groundwork for more consistent, unified messaging among South King County cities. The Subregional Housing Action Framework evaluation included: Randy Corman, Council President Page 2 of 8 September 2, 2021 • Evaluating the sociodemographic and economic trends in the sub-region that would impact housing needs • Projecting housing needs within the sub-region and individual cities from expected population growth, including unmet housing needs from underproduction in previous years. This projection includes breakdowns by household income levels • Assessing existing housing policies to understand the potential impacts of new local policies to increase production Results incorporated feedback from focus groups with South King County non-profit and for-profit developers and community-based organizations. Work on the Subregional Housing Action Framework was completed by consultants in July 2020. Findings, data, and housing needs projections from the analysis were incorporated in the Renton-specific Housing Action Plan. Housing Action Plan The Housing Action Plan is Renton-specific and builds on the work of the Subregional Framework. The timeline is divided into four phases. 1. Housing Needs Assessment: A high-level analysis of housing measures and demographics developed to support the policy review and address questions arising from the Advisory Committee and other engagement 2. Policy Review: Review of the performance of key housing policies and regulations, as well as the general performance of the housing and development markets in Renton 3. Policy Tools and Options: Identification of preferred strategies among potential policy and tool options that meet the needs and gaps identified in the previous phases 4. Recommendations: Refinement of the preferred strategies into recommendations that are feasible within a five-year implementation schedule Renton’s Housing Action Plan planning process included a program of community outreach and engagement to gather input on housing needs and opportunities in Renton. Additionally, twelve-person Housing Action Plan Advisory Committee provided overall guidance on the project process and analysis, as well as the contents of the final Housing Action Plan. The process took place between March 2020 and March 2021, during Washington’s Stay Home, Stay Healthy order in response to the COVID-19 pandemic. Outreach and engagement activities were conducted virtually, in accordance with the State’s public health guidelines. Key points of community contact included discussions with the Advisory Committee and interviews with experts, property managers, and people who recently moved in Renton. Residents were also engaged through Community Conversations, semi-structured conversations with community members about housing-related issues. HOUSING NEEDS ASSESSMENT A Housing Needs Assessment (HNA) was developed to provide relevant information on housing demand, housing costs and vacancies, expected housing production, demographics, and affordability for the city. This HNA incorporates projections of the Randy Corman, Council President Page 3 of 8 September 2, 2021 housing required to meet needs in Renton in 2040, drawn from the Subregional Housing Action Framework. Based on the overall analysis, several findings are relevant to the ongoing development of housing policy by the City of Renton. These major findings include: Finding 1: Renton will need at least another 9,300 housing units by 2040, which will require maintaining or slightly increasing the current rate of housing development. Housing development in Renton has largely kept pace with expected demands from regional projections. However, lower than needed housing production across the region has led to shortfalls in housing supply putting pressure on the Renton market. Meeting Renton’s share of projected regional growth over the next 20 years will require at least another 9,300 housing units. This will expand the local housing stock by 22% and require an increase in the rate of development by about 6% each year over recent averages. Additional office development in Renton and changes to regional growth targets in the VISION 2050 Regional Growth Strategy may require additional housing beyond this as well. Although housing production in Renton has generally been strong compared to other communities, planning and coordination will be needed to address price increases, prevent displacement, provide options for lower-income households, and maintain growth rates as development sites that are easier to develop are expended. Additionally, contingencies to accommodate additional growth may be necessary if regional conditions change, or if other communities in the region are not able to expand their own housing stock to meet future demands. Finding 2: While housing at all price points will be needed, low- and moderate-income households in Renton are facing increased cost burdens in the market given higher costs of housing. Renton has been an attractive option for many households with varied incomes. Renton is a welcoming community with affordable housing options that is within easy commuting distance of major regional employment centers. However, for low- and moderate-income households (up to 80% of area median income) looking to move to or stay in Renton, meeting their housing needs in the city has posed a significant and increasing burden on their income. Based on the subregional assessment of expected housing needs over this period, about 56% of new units in Renton will need to be affordable to households at less than 100% of the King County Area Median Income (AMI), as shown in Error! Reference source not found.. Additionally, about 22% of new units will need to be affordable to households with less than 50% of AMI, which suggests that nearly 2,000 units over the next 20 years will require a significant level of subsidy to maintain a desirable level of affordability. Housing price increases will be a challenge for the long-term housing security of many households, especially those belonging to low-income households, communities of color, seniors, and other populations at risk for housing insecurity. To maintain the current Randy Corman, Council President Page 4 of 8 September 2, 2021 diversity of families in the city and prevent displacement of residents, Renton will need to consider new options that provide affordable opportunities for housing. Availability of affordable housing can also improve commuting patterns by Renton workers. Providing housing options affordable to people working in the city can give them the opportunity to live closer, which can reduce the need for local employees to travel long distances to access housing that is affordable and meets their needs. Finding 3: Renton needs additional supplies of subsidized, income-qualified housing for very low- and extremely low-income households that cannot be addressed directly by the private market. Maintaining and increasing available housing affordable to very low- and extremely low- income households is a challenge for the private market. The cost to develop housing cannot be covered directly by the rents affordable to this income group, and the demand for land for new development may also result in the demolition and loss of the existing affordable units. Additionally, many of the existing units may be unsuitable to given households because of size, location, or conditions. Therefore, these households often have greater burdens on their income to maintain appropriate housing, which increase when housing markets come under pressure. Renton is fortunate to have housing that benefits from subsidies to make it accessible to very low-income households(earning between 30–50% AMI) and extremely low-income households (earning below 30% AMI). However, that supply is vastly outstripped by need, especially at the lowest end of the income range. Only about 10% of Renton’s rental units are affordable to households earning less than 30% AMI, and there are over two and a half times as many extremely low-income households as there are housing units affordable to them. This shortfall challenges the ability for these households to maintain housing in Renton and avoid homelessness. Finding 4: The existing supply of developable land in Renton will be able to support local housing needs well into the future. An ongoing challenge across the Puget Sound Region is that many communities face shortages of sites for new housing. These constraints are contributing to the challenges of maintaining housing production necessary in the region. In 2014, the King County Buildable Lands Report noted that among the “metropolitan” and “core” cities in the county, six of these twelve cities had substantial land shortfalls and action was necessary to expand capacity. Unlike in other cities, however, local housing development in Renton is not currently constrained by developable land. In the 2014 report, Renton was the only city of its size in the region that reported enough development capacity to accommodate future growth targets to 2031. Updates to the Comprehensive Plan calculated that there was enough capacity to meet expected 2035 growth targets, and remaining capacity would likely accommodate existing growth to 2040 and beyond. Because of this, Renton is not faced with an immediate need to increase capacity through zoning and development regulation changes. Any adjustments to these Randy Corman, Council President Page 5 of 8 September 2, 2021 regulations should be oriented to building affordable, accessible, and more diverse market-rate housing and providing support for increased production. Housing policies can also focus on providing options to residents and newcomers in walkable, complete communities, and to address historical issues of racial equity and justice related to housing. Finding 5: There are diverse needs for housing-related support in Renton that extend beyond housing production and vary across groups in the community. Housing security is not only linked to paying rent or making mortgage payments, but also to other financial challenges that can affect the ability of households to maintain healthy and appropriate housing that meets their needs. Lower-income tenants in the private rental market can face significant year-to-year price increases, difficulties with a unit’s state of repair, temporary income disruptions, and relatively high relocation costs. Addressing these obstacles can make the difference between keeping people housed in the community and having them experience homelessness. Other groups within the community may also face challenges to accessing and keeping affordable, appropriate housing. Seniors and people with disabilities may have additional requirements for housing, but potential financial limitations with meeting those requirements with fixed incomes. Immigrants and people of color may have strong support networks in the community but are challenged if they cannot find appropriate housing at a reasonable cost, and in some cases, are still affected by historical discrimination in the housing market. CURRENT HOUSING TOOLBOX The Plan has been developed to build on current efforts by the City and its partners to promote market-rate and affordable housing in the community. Renton’s current housing toolbox can be divided into six main categories. • Partnerships. The City has been actively involved in coordinating policies, programs, and funding for moderate- and low-income housing with partners in the region. A primary partner over time has been the Renton Housing Authority, a major provider of subsidized housing in the community. Other partners involved with housing and housing policy have included the South King Housing and Homelessness Partnership (SKHHP), the King County Housing Authority, the Housing Development Consortium, and the King County Affordable Housing Committee. • Incentives. Renton has also provided significant incentives, principally for the development of affordable low-income housing. The City provides a Multifamily Tax Exemption (MFTE) program for both market-rate and affordable housing in the Downtown and Sunset Area, as well as bonus density, waived fees, and reduced parking for affordable housing across the city. • Regulations. The City has worked to provide more flexibility in regulation through initiatives related to cottage housing, planned urban developments (PUDs), and accessory dwelling units (ADUs). Additionally, height increases can be allowed through an administrative Conditional Use Permit, providing for additional flexibility. Randy Corman, Council President Page 6 of 8 September 2, 2021 • Plans and Statutes. The City has developed planned action ordinances for the Lakeshore Landing, Southport, and Sunset areas to provide for a streamlined review process under the State Environmental Protection Act (SEPA) and is currently engaged in developing the Grady/Rainier Subarea Plan to promote new housing in this area. • Preservation. To maintain safe and accessible low-income housing, the City has developed a Rental Registration Program (RRP) for multifamily properties. Additionally, a Housing Repair Assistance Program has been developed by the Department of Community Services to provide funding for qualified home improvements for low-income households. • Funding. The City has access to different funding sources to support low-income housing development. The City’s Housing Opportunity Fund has been supported through General Fund revenues and has provided grants for housing projects in the community. The City also has access to new sources of funding through the State Affordable Housing Sales Tax Credit (under SHB 1406), as well as the recently passed Affordable Housing Sales Tax (under HB 1590). The HAP details the existing work of the City and provides supporting details to highlight the role that these programs play in making Renton a more accessible community for all and supporting a healthy stock of housing to meet the needs of current and future residents. RECOMMENDATIONS The HAP provides six high-level recommendations to achieve the housing goals, which represent a broad set of actions that the City can pursue during the five-year horizon of the plan. These recommendations also consider additional long-term actions for the City to review as part of the Comprehensive Plan update in 2024 and other actions for beyond the planning horizon for this Plan. The strategic recommendations include the following, not listed in order of importance: 1. Support partnerships to meet housing goals. The City has been a proactive and effective partner in encouraging housing development that meets the housing needs of the community. Future successes will need ongoing development of new partnerships and strengthening of existing partnerships to achieve both the affordable and market-rate housing production needed to meet for future demand. Actions under this strategy would include the following: 1.1 Create a Housing Advisory Committee to coordinate housing efforts across stakeholders. 1.2 Continue efforts with neighboring communities to address housing needs in south King County. 1.3 Continue to coordinate with County and regional agencies on needs for affordable housing. 1.4 Identify long-term funding sources for the Renton Housing Authority to promote the development of affordable housing options. 1.5 Regularly conduct community planning that integrates housing goals. 2. Promote diverse housing types and sizes in neighborhoods. Providing for a wide range of housing needs in Renton into the future will require different types and formats of housing. In addition to single-family detached housing, “missing middle” housing—townhomes, duplexes, and other single- Randy Corman, Council President Page 7 of 8 September 2, 2021 family attached housing—will also be important in giving future residents different options of formats and sizes of housing. Allowing for additional housing types and sizes at appropriate densities in targeted areas of Renton can provide opportunities to build new housing at a faster rate, and give choices that can be more affordable and accessible to a range of households. Actions under this strategy would include the following: 2.1 Consider permitting additional housing types. 2.2 Evaluate minimum densities in R-10, R-14, and RMF zones. 2.3 Add a second higher-density RMF designation to allow for greater flexibility with high-density residential uses. 2.4 Evaluate areas for targeted rezoning to R-10, R-14, and RMF to encourage more density and diverse housing types. 2.5 Coordinate neighborhood outreach to ensure residential design standards promote high-quality design and compatibility. 3. Incentivize housing development. Renton is a desirable place to live, and there is a strong market for new development. The City has options to promote different types of development through incentives and flexibility with requirements that will meet the community’s current and future housing needs. Providing these benefits can help to promote the development of market-rate and affordable housing. Actions under this strategy would include the following: 3.1 Maintain parking requirements and consider modified parking requirements for areas supported by frequent transit. 3.2 Allow for flexibility in commercial space for affordability. 3.3 Explore the development of regional stormwater facilities to support residential development. 3.4 Continue to encourage the use of innovative building techniques to reduce costs of construction. 4. Promote affordable housing preservation and development. Trends in Renton’s housing costs and household income pose a risk of displacement for lower-income households. To prevent displacement, one approach would be to maintain and enhance Renton’s existing affordable housing, both by providing funding for income-restricted units and presenting incentives for property owners to maintain rents at affordable levels. There are also options to increase the production of new income-restricted units, either as part of market-rate development or wholly affordable projects. Actions under this strategy would include the following: 4.1 Pass requirements for the distribution of information to tenants. 4.2 Adjust the Renton MFTE program to promote permanently affordable housing. 4.3 Develop other property rehabilitation grants and loans. 4.4 Coordinate other sources of funding. 4.5 Include affordable housing as potential public benefit for Planned Urban Development. 4.6 Explore increases to the density bonuses available for affordable housing. 5. Use available land for affordable housing development. Providing opportunities to dispose of unused public or quasi-public lands at reduced or no cost can be one way of addressing costs for affordable housing projects and increasing the rate of production of affordable units in the community. Randy Corman, Council President Page 8 of 8 September 2, 2021 Actions under this strategy would include the following: 5.1 Develop a general inventory of available properties. 5.2 Coordinate with property owners to use vacant and underutilized sites for affordable housing. 5.3 Identify partners for development of these available sites. 5.4 Update the City’s real property disposal policy to explicitly consider the use of the City’s surplus properties for affordable housing. 5.5 Coordinate land acquisition and banking to preserve land for affordable housing. 6. Align Comprehensive Plan policies. The City’s required update to its Comprehensive Plan, due in 2024, presents an opportunity to align the City’s long-range vision, goals, and policies to the identified housing needs in a way that is aligned to the community’s values and hopes for the future of Renton. Actions under this strategy would include the following: 6.1 Reinforce the commitment of the City to address racial equity in housing across the Comprehensive Plan. 6.2 Increase the emphasis on housing affordability and reducing displacement with goals and policies across the Comprehensive Plan. 6.3 Amend the Land Use Element to accommodate more diversity and flexibility under residential land use designations. 6.4 Update goals and identified needs for affordable housing. 6.5 Provide regular reporting on indicators to measure progress on housing goals in the Comprehensive Plan. CONCLUSION: Staff anticipates the draft Housing Action Plan will be finalized in the near term and would like to present the draft to the public for additional comment at a public hearing before the Planning Commission. Following Planning Commission and Planning and Development Committee review, the Planning Commission will present recommendations to Council for adoption. cc: Ed VanValey, CAO Kristi Roland, Deputy CAO Jason Seth, City Clerk Kari Roller, ASD Administrator Preeti Shridhar, EHHS Administrator Mark Santos-Johnson, Community Development and Housing Manager