Lacey updates Middle Housing Initiative policies amid new state requirements

Lacey is making strides in updating its Middle Housing Initiative, following new state legislative requirements.  

The city aims to adopt a Middle Housing ordinance within six months of updating its Comprehensive Plan, as mandated by the Revised Code of Washington (RCW 36.70A.130). 

As of June this year, the city has completed Phase II, involving an internal staff review of the Comprehensive Plan, the Housing Action Plan (2021), the Affordable Housing Strategy (2019) and applicable County-Wide Planning Policies. 

The review aimed to identify supportive, approaching, challenging, and non-applicable policies concerning middle housing goals.  

Initial findings indicate that Lacey's Comprehensive Plan generally supports diverse housing opportunities, including housing infill and connectivity between housing and services.  

However, Housing Coordinator Jenniffer Adams said further discussions are needed to address potential barriers and refine definitions related to single-family homes and middle housing. 

“There may be room for it to become more efficient and more effective,” said Adams during the Planning Commission meeting on June 12. 

Engrossed Second Substitute House Bill 1110 (2023) and Engrossed House Bill 1337 (2023) set the legislative framework for this initiative.  

These bills require cities with populations between 25,000 and 75,000 to allow at least two middle housing units per lot in predominantly residential zones.  

If at least one unit is designated as affordable housing, up to four units per lot must be permitted. Additionally, zero lot line short subdivisions must be allowed, facilitating ownership opportunities for each unit. 

For accessory dwelling units (ADUs), the legislation stipulates that at least two ADUs must be allowed on all single-family home lots within Urban Growth Areas (UGAs).  

Cities are encouraged to provide incentives for ADU development and are prohibited from requiring ownership of any unit with an ADU. 

In February 2024, city staff briefed the Planning Commission on these new legislative requirements, emphasizing the need for a proactive approach.  

Lacey received a $75,000 grant from the Department of Commerce, the maximum award available, to fund necessary policy work and implementation strategies. 

Next Steps 

As Lacey moves into Phase III, the focus will shift to analyzing the Lacey Municipal Code (LMC) to identify necessary updates for compliance with House Bill 1110. This phase will also involve extensive public and stakeholder engagement to ensure comprehensive and inclusive policy development. 

The goal is to draft and adopt a Middle Housing Ordinance by June 1, 2026, meeting the state's regulatory deadline.