Olympia is open to potential flexibility in project planning, provided that the developer dedicates units at 80% of the market rate for 20 years.
The Olympia Site Plan Review Committee heard a proposal to create two new commercial parcels along Harrison Avenue NW on Wednesday, March 5. This project could set a precedent for affordable housing development.
Josh Gobel, of Carve Architects, presented site plans for the proposed development of 5012 and 5014 Harrison Avenue NW. The site contains a single-family residence and two outbuildings serving as a shop and garage.
The project involves adjusting property lines and subdividing the larger lot into three parcels. The narrative submitted to the review committee stated that the proposal would include a boundary line adjustment (BLA) to realign the existing property line to create two parcels. The developer will also subdivide the east parcel to create three lots.
The existing single-family residence would be converted into a commercial property. The middle and west lots would be developed with a 9,000 square feet, three-story building with a 3,000 square feet footprint. The first floor would be developed into office/retail space with two-story apartments, totaling 16 units.
"Mike Fung, the developer, has many employees. One of his goals is to create housing that is attainable for them," Gobel said.
The development would occur in two phases. The first phase includes frontage improvements, new drive aprons, the demolition of the existing shop, and the construction of the Phase 1 mixed-use building and associated improvements.
Phase 2 includes continued development of the west parcel with an additional 9,000 square feet of mixed-use building.
The development team's primary concern was the extensive and potentially costly frontage improvements required across three streets — 2nd Avenue, Harrison Avenue and Overhulse Road.
Gobel said the frontage improvements seemed disproportionate to their relatively small 9,000-square-foot building. He asked the city planners about phasing the frontage improvements to manage costs.
Gobel explained that the phased approach allows for managing upfront costs and strategically developing the site in stages.
While the development team was looking at the BLA option for land division, city planner Casey Mauck suggested considering a binding site plan.
She explained the binding site plan is similar to a short plot, with flexibility to incorporate BLA within the plan. It allows creation of building pads and enables phase development without requiring additional land use reviews, even if Phase 2 is not constructed for 15 years.
Tiffani King, senior engineering plans examiner, said that a binding site plan allows for phasing language and can potentially guarantee the development of staged improvements.
Principal planner Nicole Floyd mentioned ‘a new, not-yet-finalized possibility’ where developers could get more flexibility in planning if they commit to providing affordable housing.
If the project rents units at less than market rate — around 80% of market rate for 20 years, the city would be willing to work with them to help make the project work, potentially including more flexibility with phasing.
She said the developer would need to work through the entire process first, and a binding site plan might help.
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MrCommonSense
Not sure what the next to last paragraph means when it says, "If the project rents units at less than market rate — around 80% of market rate for 20 years, the city would be willing to work with them to help make the project work, potentially including more flexibility with phasing." It sounds like the City is threatening not to allow "phasing" unless affordable housing is included? Isn't it the City's responsibility to make every project work when it is within the code? And you wonder why development is difficult around here. Because no one can understand the codes, even those engineering and consulting companies that work with the City on a regular basis.
Friday, March 7 Report this
JulesJames
"80% of market rate" over 20 years is 20 years of developer-bureaucrat re-defining "market rate." The better idea is to require a certain percentage of the units to be 2-3 BR 2-3 BA child/elderly/houseshare compatible. Floorplan requirements far more effectively moderate the cost of rental housing than adding a generation of bureaucratic tracking.
Saturday, March 8 Report this
OlyKid88
The term "Affordable Housing" means different things to different groups. As of late, I've also been seeing the term "Attainable Housing" which seems to have no specific policy definition..
What should be a simple definition is actually quite confusing and it uses a bit of government math to arrive at the numbers. I find it so confusing that I can't ensure I have it 100% correct below, but it is close.
You can try it yourself:
https://www.huduser.gov/portal/datasets/il/il2024/2024summary.odn?STATES=53.0&INPUTNAME=METRO36500M36500*5306799999%2BThurston+County&statelist=&stname=Washington&wherefrom=&statefp=53&year=2024&ne_flag=&selection_type=county&incpath=&data=2024&SubmitButton=View+County+Calculations
From Olympia's MFTE webpage : "affordable - defined as rents and utilities not costing the tenant more than 30% of their monthly gross household income - to households whose income is 80% or lower of the Area Median Income, adjusted for household size and determined by the U.S. Department of Housing and Urban Development.
HUD's Area Median Income for 2024 in Olympia/Thurston County was $116,700. HUD adjusts this number for family size to arrive at qualifying income limits.
For 2 people, the 80% Income Limit to qualify for "Low Income" housing would be $72,150. "Affordable Housing" by the definition used by the City would be 30% of this number, or roughly $1800 a month (rent + utilities) for two people.
In general, I don't think many people would assume rent defined as "Affordable" for two people would be $1,800 a month. Offering rents in this range meets Olympia's MFTE guidelines as I currently understand it.
Olympia has a very high median income level which helps explain the demand for the current rents of market rate apartments.
I think what many people mean when they use the word "Affordable" is actually "Low Income" or Subsidized housing. This type of housing is extraordinarily expensive to build and is an entirely different project than a typical developer would be able to produce as they pay market rates for land, labor, materials and permit/impact fees plus taxes. That is the primary reason that not enough of it gets built.
It is challenging for non profits in Olympia to make this happen. Habitat for Humanity recently had to walk away from a project that had free land, volunteer labor and subsidized materials due to Olympia's building permit requirements. They would have been required to repair/replace the surrounding streets, sidewalks and a walking path as I recall.
It isn't a simple topic. I'd love to hear others experience with the actual development of these types of properties in the City of Olympia.
I'm open to corrections or clarifications on the information I provided above.
Saturday, March 8 Report this
ViaLocal
Olykid88 - I greatly appreciate insights and general knowledge on this topic. In reference to the project in Olympia you mentioned where Habitat for Humanity had to walk away due to Olympia's building permit requirements, I'm wondering why there are no breaks given to help alleviate those costs for organizations truly working to make affordable homes in the area.. it seems like we give big developers tax exemptions for many years after they finish completing apartments or housing projects that are hardly "affordable" although they are "attainable". Is that because the total cost of those tax breaks in spread over many years, where as building permit costs are generally all paid at once?
It just seems like there should be more incentive to encourage these low-income homes to continue to be built. Some people are single, low income workers who still need a place to sleep at night. It just makes no sense to me to keep building homes that one person can hardly afford on their own.
Monday, March 10 Report this
OlyKid88
When the MFTE was codified in 1995, it made no mention of affordable housing. It doesn’t take long to forget the characteristics of Olympia’s downtown and the mix of housing that existed at that time.
Olympia’s core was struggling to survive economically. That deserves an entire article of its own. A decade ago in 2015, 83% (1263 units) of downtown housing was designated as low income. Of that amount, 56% (713 units) was government subsidized housing. 10% of housing units were designated as market rate.
https://www.theolympian.com/news/local/article26111494.html
https://lawfilesext.leg.wa.gov/biennium/1995-96/Pdf/Bills/Session%20Laws/Senate/5387-S2.SL.pdf?cite=1995%20c%20375%20s%202
The MFTE was intended to incentivize economic development and the creation of multifamily housing. It gave local government a mechanism to encourage density in target areas it identified that were lacking investment. It was to help increase density, prevent more urban sprawl and help meet the GMA requirements, Downtown Olympia lacked any meaningful private investment for decades until ~2015; 20 years after the MFTE was created. Don't hold me to this but I think Olympia might have approved 12? MFTE projects.
Over time, politics happened. The MFTE morphed into something different to include longer exemptions for “Affordable Housing” allocations starting at 20% of units. Olympia changed.Housing costs skyrocketed. Inflation took off. The narrative changed. Downtown is still heavily weighted to “Affordable Housing” as the City defines it. The combination of Olympia’s high median income of $116k with a constrained housing supply results in expensive housing options for a growing community.
I’ll let others argue the merits of the MFTE. I can argue either side. I don’t like that Olympia chose to implement it through tax switching, so that is a negative. Rather than give up the property tax revenue, Olympia chose to shift it to other property taxpayers.
4 days ago Report this