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2024-03-05 Council Special MinutesEDMONDS CITY COUNCIL SPECIAL MEETING MINUTES APPROVED MINUTES March 5, 2024 ELECTED OFFICIALS PRESENT Mike Rosen, Mayor Vivian Olson, Council President Chris Eck, Councilmember Will Chen, Councilmember Michelle Dotsch, Councilmember Susan Paine, Councilmember Jenna Nand, Councilmember ELECTED OFFICIALS ABSENT Neil Tibbott, Councilmember 1. CALL TO ORDER STAFF PRESENT Susan McLaughlin, Planning & Dev. Dir. Rob English, City Engineer Jeff Levy, Senior Planner Jeanie McConnell, Engineering Program Mgr. Rose Haas, Planner Nicholas Falk, Deputy Clerk The special Edmonds City Council meeting was called to order at 5:30 p.m. by Mayor Rosen in the Brackett Room, 121 5th Avenue North, Edmonds, and virtually. 2. COUNCIL BUSINESS 1. ACCESSORY DWELLING UNIT CODE UPDATE (AMD2023-0008) ACCESSORY DWELLING UNIT CODE AMENDMENT TO ALLOW FOR DETACHED ACCESSORY DWELLING UNITS — "EXPANDING HOUSING OPTIONS BY EASING BARRIERS TO THE CONSTRUCTION AND USE OF ACCESSORY DWELLING UNITS IN ACCORDANCE WITH HB 1337." Ms. McLaughlin reviewed: House Bills Applied — Single -Family Zones HB 1110 HB 1337 HB 1220 Increases middle housing in Require allowing 2 accessory Requires cities to differentiate single family residential areas dwelling units in all single family between housing types, ties these At least two homes per lot zoning districts types to affordability levels Four per lot if located within a Have sufficient capacity for each quarter -mile walking distance of housing type a major transit stop (Like SWIFT (The capacity target by housing BRT Stop or Amtrak station in types is provided by Snohomish Edmonds) County Housing Requirements Four per lot if one of the homes is Report as per Dept. of Commerce affordable.guidance) Edmonds City Council Approved Minutes March 5, 2024 Page 1 Complying with HB 1220 - Edmonds is a Higher Cost Community o High average sale price for a middle housing unit (townhomes, duplex, triplex, quad) unit at > 120% AMI o Unit sales* in last two years in Edmonds average an estimated $720,000 with no sales below $590,000 o The sales prices would need to be below $400,000** to correspond to a rent or mortgage payment that would be considered affordable at <120% AMI *Costs are sourced from townhomes sold in Edmonds between March 2022 and January 2024, Redfin and realtors based in Edmonds with 47 data points. **According to the Department of Commerce recommended Fannie Mae calculator Complying with HB 1220 o 9,000 Total Unit Capacity must follow this distribution: Must be low-rise, or ADUs or low-rise, Middle housing or mid -rise apartments / mid -rise apartments/ any other type condos condos M*,I*d 1: 111,2044 Hou,in{ OMI-m bV Income, City cI monde [Ap 13 2023 PM) 2,479 1 883 1987 1,475 977 142 0910-30% 0%-30% 30%-50% 50%--80% 80%-100% 100%&-120% on-PSH PSH o Due to Edmonds being a Higher Cost Community, the typology of Middle Housing can only count towards 126 units. Setting affordability incentives or regulations will not change this. o ADUs can count for a large number of units, combined with low-rise, mid -rise apartments. If only one ADU per lot is allowed, 900 additional multi -family units will need to be added Interaction of HB 110, HB 1337 and HB 1220 o ADU Highlights from VIA/Perkins-Eastman Methodology Memo ■ Method for Calculation New ADU Capacity: - Identify all single-family residential land use designated lots. - Remove lots with environmentally critical areas. - Remove publicly owned and tax-exempt lots. - Remove lots with less than 6,000 sf of buildable area remaining. - Apply capacity of two ADUs on remaining parcels (per HB 1337). - Reduce capacity by 90%, assuming a max 10% participation rate. This is a combination of a reasonable upper limit of property owners who would be interested in development and a factor to reduce based on considerations not already captured. ■ 1,800 ADU units left after calculations if assumed 2 per lot, and 900 ADU units are left if assumed 1 per lot. o If ADUs are limited to only one per lot, approx. 900 additional units of multi -family must be zoned. ■ There is a known discrepancy between the language of HB 110 (RCW 36.70A.635) and HB 1337 (RCW 36.70A.681) ■ Per HB 2321, referenced in the "User Guide for Middle Housing Model Ordinance" by Department of Commerce, ADUs "may" be considered part of HB 1110 unit density, making an applicable lot allow only two units, the primary unit and one ADU Edmonds City Council Approved Minutes March 5, 2024 Page 2 ■ HB 1220 shows that due to affordability requirements, no other middle housing typology can be used to replace the density lost from limiting ADUs to one per lot ■ Configurations allowed if City counts ADUs toward HB 1110 unit density o With either decision of one ADU or two ADU allowed per lot, we have a solution for our growth alternatives ■ In our EIS Growth Alternative Strategies, a final Draft EIS is developed by June 2024, after the two Growth Alternatives are studied (as well as a No -Action Alternative) ■ These are two bookends being studied, and the final Draft EIS will be a combination of both alternatives, including what works, excluding what does not, and adjusting based on public online open house feedback ■ The additional needed units can be zoned in the Medical District Center or taken from other elements studied in the two alternatives and put together to make a cohesive whole. Growth Alternatives Capacity Comparison Areas of Change Alt A: Focused Growth Alt B: Distributed Growth No of Units No of Units 200 9M Illediral Censer 1000-1200 1900-2000 TOTAL 2700-3000 3600-4000 Total numbers torAlt B: Distributed Growth represents unit count it ADUs are limited to 1 per lot based on HB 1110 & HB 1337 interaction. Westgate, 22% 5 Comers, 25% 1 Perinville, 4%;IIII1&W-h`a'C-oter Seaview EaExpansin 1% North Bowl, 1% t000-1200 Firdale North, 2% Perinville, Seaview East S% S% Westgate Firdale North, 256 S Carnes, 6% North Now4 Medical Cen[er Expansion 1900-2� Metrics are approximate, conceptual only and subject to change with further study Mayor Rosen advised council questions/comments will be via round robin with Council President Olson randomly choosing names. Council President Olson advised comments or questions on the same topic will be accepted before moving on to the next councilmember. Councilmember Dotsch commented on the importance of being knowledgeable about the opportunities in Edmonds because Edmonds is very unique and is not flat. Therefore the idea of more density in semi -rural areas with no sidewalks, limited sightlines, steep slopes, etc. does not make sense. There are also a lot of environmental issues in Edmonds that other cities do not have. A more comprehensive discussion about these options is helpful versus taking things one at a time in a silo. Edmonds City Council Approved Minutes March 5, 2024 Page 3 Councilmember Chen, a member of the citizens housing commission in 2021, said this topic has been discussed by professionals, the community and the council for 3-4 years. If the council chose the strategy of 1 ADU per lot, another 900 units would need to be identified via other strategies. He asked if multifamily developments in the City count toward that. Ms. McLaughlin answered yes. The 900 unit delta between 1 versus 2 ADUs already accounted for the multifamily units that are in the growth alternatives. The City has to accommodate an additional 4,000 units which was done with the growth alternatives in the pie charts, but that methodology assumed 2 ADUs per lot. If those 900 units have to be removed via allowing only 1 ADU, an additional 900 units need to be identified. Senior Planner Jeff Levy explained that would be beyond what is already planned in the growth alternatives. Councilmember Chen asked if that included permits already in the pipeline. Ms. McLaughlin answered it is just zone capacity; zone capacity means the City is enabling development to happen and if all of it happened, the City would exceed its growth targets. The growth targets only assuming 10% of properties would build an ADUs over the next 20 years. In reality site constraints, finances, personal preferences, etc. will dictate whether development happens. Just because the City enables it via zoning, does not mean it actually happens. Councilmember Chen clarified the assumption is only 10% of allowable ADUs will end up being constructed. Ms. McLaughlin explained the zone capacity would enable more than 10%, but the market based theory is only 10% will take advantage of the opportunity to build an ADU and Department of Commerce allows assuming only 10%. Mr. Levy explained it is 10% of what is left after removing parcels with significant critical area, that do not have 600 square feet for an ADU, and that are tax exempt. Councilmember Paine asked for clarification, ADUs would not be capped at 10%. Ms. McLauglin answered no, to meet the growth targets, the City can only use 10%. Councilmember Paine asked how many ADUs currently exist in the City. She recalled the housing commission discussed ADUs as an opportunity before this legislation and a lot of households already have ADUs although some may not be legal. Ms. McLaughlin said the number of legally permitted ADUs could be determined, but not the ones that may not be permitted. With regard to one versus two ADUs per parcel, Council President Olson asked if there was a way to allow two ADUs per lot but no more than one could be detached. Ms. Haas did not believe that would be possible. Mr. Levy said that may be a question for Department of Commerce. Councilmember Dotsch commented ADUs are in both HB 1110 and HB 1337. If ADUs are folded into the unit count in HB 1110 as 2 per lot, it would restrict them to 2 per lot. One is a triplex bill and the other is a duplex bill. ADUs can be counted in the duplex bill, HB 1110. The challenge is allowing three per lot. She referred to the Maple Leaf neighborhood which is being decimated with these type of structures; a duplex with a DADU. With Edmonds' stormwater issues, streams, CARA, watersheds, etc., it will be challenging to do more than two units on a lot of lots. With three, that will have impacts on the environment. In her opinion, to avoid environmental areas and buffers and unurbanized areas that lack infrastructure, assuming lots can accommodate three units is unrealistic and destructive to the environment. Ms. Haas explained an ADU is subject to the City's critical area code, ECDC Title 23.40, just like a single family development. ESHB 2321, which is on the governor's desk for signature, clarified language in HB 1337 guidance regarding ADUs on a parcel that includes a critical area. It has been updated to match the single family zoning code which would allow for development outside a critical area or its buffer. The way it was written previously was the city could prohibit an ADU on the entire parcel; it was clarified to match the single family zoning code to state development would not be allowed within a stream buffer or steep slope, not the entire parcel. Just like single family homes, everything is subject to the critical area code Edmonds City Council Approved Minutes March 5, 2024 Page 4 which is pretty stringent. A lot of parcels are constrained by critical area and development standards which will limit the number of ADUs that will fit on lots. With regard to attached versus detached and addressing the issue of affordability and smaller spaces which seem to the higher need, Council President Olson suggested that need could be met without the other detriments. To the extent that could be approved, that would be amazing. Councilmember Eck said she is hearing some say more than two ADUs, but for the sake of this conversation, the proposal is to allow up to two. Ms. Haas agreed it was up to two. COUNCILMEMBER NAND MOVED THAT THE COUNCIL NO LONGER BE CONSTRAINED BY DRAWING NAMES FROM THE CUP AND BE ALLOWED TO ASK INDEPENDENT QUESTIONS. WITH THE PACE THIS IS GOING, SOME COUNCILMEMBERS WILL NOT BE ABLE TO ASK THEIR QUESTION BEFORE THE STUDY SESSION IS OVER. MOTION DIED FOR LACK OF A SECOND. Councilmember Nand encouraged councilmembers to be brief to allow other councilmembers to ask questions. Council President Olson commented if more time is needed, this topic may be added to the agenda during the regular meeting. Mayor Rosen suggested questions and answers be as concise as possible. Regarding whether the City can limit it to one detached and one attached, Ms. Haas read from RCW 36.70A.681.c: "The city or county must allow at least two accessory dwelling units on all lots that are located in all zoning districts within an urban growth area that allow for single-family homes in the following configurations: (i) One attached accessory dwelling unit and one detached accessory dwelling unit; (ii) Two attached accessory dwelling units; or (iii) Two detached accessory dwelling units, which may be comprised of either one or two detached structures." Councilmember Nand relayed her understanding that short term rentals have largely been unregulated in Edmonds and the City does not collect lodging taxes on short term rentals. If someone were building an ADU or DADU for a short term rental, that does not contribute to the goals of affordable housing because it does not provide housing. She questioned waiving impact fees to subsidize that business activity. Ms. McLauglin answered cities are concerned about short term rentals when there is a correlation between the amount of short term rentals and escalating housing rental costs. The comprehensive plan will get into this in more detail; however, a cursory look at the number of VRBOs and Airbnbs found there are not that many short term rentals in Edmonds. Staff plans to also review City business licenses for short term rentals. Ms. Haas explained Washington State Department of Revenue may be able to provide a number as the City does not currently regulate short term rentals. A cursory google of Airbnb and VRBO found about 50 units within Edmonds. Ms. McLaughlin said so far staff is not seeing a correlation between the number of short term rentals and rental prices. The reason that is relevant is an ADU is often a mitigation for rising housing costs that that property owner needs to offset with a short term rental. The collection of lodging tax is also a good point to consider. Councilmember Nand clarified she is not hostile to people using short term rentals to subsidize the cost of living in Edmonds which is very high. Because that is a business activity that can impact the neighborhood, she questioned subsidizing it by waiving impact fees when the intent is to build ADUs to provide more affordable housing. Ms. McLaughlin said staff is not recommending waiving impact fees, that is a point of discussion to be considered. Per HB 1337, the City cannot charge more than 50%. Councilmember Nand commented if council was interested in creating a tiered system for people using ADUs/DADUs for affordable housing, she would be in favor in creating an incentive system. Edmonds City Council Approved Minutes March 5, 2024 Page 5 Councilmember Paine asked if impact fees were related to water and sewer hookups. Ms. Haas answered transportation and parks. Councilmember Paine relayed her understanding single family homes were not charged impact fees. Ms. McLaughlin agreed. Councilmember Eck emphasized not everyone who would be allowed to build an ADU will do so. She asked whether the planning department has analyzed the advantage of including those 900 units by allowing up to 2 per lot for the comprehensive plan. Ms. McLaughlin referred to the methodology memo, the consultant's viewpoint, that taking advantage of 2 ADUs per lot in HB 1337 is not only more context appropriate, but gives individual property owners a lot of housing choices while still looking at a 15 minute neighborhood growth alternative strategy that adds vibrancy and growth to neighborhood centers and hubs without overtaxing them with the additional 900 units. That is what staff is leaning toward; offering the most flexibility for single family property owners while moderating growth in neighborhood centers and hubs in a positive way. Councilmember Dotsch relayed her opinion growth should be planned where there is access to transportation, urbanized streets with sidewalks, etc. She was concerned about triplexes in the far reaches of north Edmonds and preferred to plan density closer to transit options especially if parking is not required. If ADUs are not folded into HB 1110, there could be a duplex and 2 ADUs. Mr. Levy answered yes, if the lot is large enough to support it, not exceed 35% lot coverage, and can around the trees and critical area. Councilmember Paine observed parking is not prohibited, it is just not required. Ms. McLaughlin agreed. If lots further from transit were to build ADUs, Mr. Levy commented there is always the question of whether they would be rentable or saleable. Market factors will determine whether some of those possibilities are financially feasible. Councilmember Nand commented when looking at the mandatory density bills, there are a lot of concerns about crowding and impacts on parking. The Safeway on Highway 99 has complained that residents of new developments that lack enough parking are parking in their lot. While that is a concern and something cities have to grapple with, the benefit of ADU/DADUs to the community and residents is instead of being priced out of the community and selling to a developer, they are able to subdivide their property to subsidize their cost of living and remain in the community. With regard to utilities and wastewater treatment, Councilmember Chen observed Lynnwood has a big development on the horizon. He asked about the capacity for Edmonds with this anticipated growth and next steps with regard to capacity. Ms. McLaughlin answered the whole point of developing growth alternatives and providing bookends for the intensity of development anticipated over the next 20 years in accordance with growth targets goes into an in-depth environmental analysis that includes looking at utility capacity and its ability to sustain the growth identified in the alternatives. If significant environmental impacts are identified that the City does not have the capacity to sustain, mitigation measures will be recommended to meet the capacity. That analysis will identify the capacity of the infrastructure and utilities. Councilmember Paine asked about the EIS. Ms. McLaughlin answered recommendations are being finalized via the growth alternatives. It will be available in an online open house in March and April so the public can provide input. It has already been to the planning board and economic development commission and will come to council soon. Mr. Levy explained the two growth alternatives are strategies and bookends. They would both be studied and if at the end of the day there is not adequate infrastructure, something from the other strategy that was studied can be used. Ultimately the different alternatives will be married to ensure there are no significant environmental impacts. Edmonds City Council Approved Minutes March 5, 2024 Page 6 Councilmember Nand said she has seen YouTube videos about building detached dwelling unit. Installing a concrete pad and utilities and build the space make it quite expensive. She was hopeful there was something the City could do to aid homeowners especially those who will attempt to be their own general contractor and might deal with substandard building, fraud, etc., that could be detrimental to them as well as to the community. She envisioned a huge avenue for unscrupulous contractors or subcontractors taking advantage of homeowners. She was unsure whether the City could address that from a policy or enforcement perspective to prevent predation of elder and vulnerable seniors who might be interested in pursuing an ADU/DADU. Ms. McLauglin answered some cities have considered preapproved ADUs including off the shelf, preapproved plans. That is something staff has been intrigued by, but would require a grant writer to execute which staff does not have capacity to explore this year. Ms. Haas commented any ADU/DADU is still subject to the building code and codes applicable to single family construction. The City will not allow substandard development, it still has to go through the same process. With regard to the inhabitable area versus unheated areas, Councilmember Dotsch observed the limit in HB 1337 is 1000 square feet of inhabitable space. In addition there could be decks, patios, garages, unheated space, etc. so they could be quite large. If one looks at what's happening in Seattle, these are not small cottages or granny flats in the backyard. She asked for confirmation that unheated spaces would not be included in the inhabitable square footage. Ms. McLaughlin agreed, explaining any restrictions have to be consistent with restrictions on single family residents; there are currently no limitations on inhabitable space for single family. Ms. Haas explain what will dictate the overall size and footprint are the structural lot coverage and other lot standards that the primary unit is also subject to. She agreed the City could not dictate the amount of uninhabitable space within an ADU unless that is also done for single family homes. Councilmember Dotsch asked if an off the ground deck was different than a patio. Ms. Haas answered typically something over 3 feet in height and permanent adhered to the ground; 35% is the maximum structural lot coverage. Per the existing code, anything under 30" can extend into the setback 1/3 or 4 feet whichever is less. Ms. Haas clarified a question by Councilmember Dotsch, if setbacks were allowed to be reduced to 5 feet in the rear, could a concrete patio extend into the rear setback? She answered it could extend into the setback by 1 /3 of the 5 feet. Ms. McLaughlin clarified it is limited to RS-6 and RS-8 zoned lots which are primarily downtown. Ms. Haas said that has not been addressed yet but that is how staff is reading it, but it can revisited. One-third of 5 feet is a negligible amount. Walkways are not regulated so they can be in the setback. Council President Olson asked if a relatively thing could be done on the main residence as well. Ms. McLaughlin said from a staff resourcing standpoint, it is fairly arduous to have the ADU relative to the size of the main residences. Council President Olson clarified her question was relativity of the unconditioned space in the ADU to the percentage allowed in single family based on the total square footage. Ms. McLaughlin answered anything that is done for single family could be required for ADUs. Council President Olson suggested it could be done as a percentage for example there could be unconditioned spaces up to 10% for both the single family and the ADU. Ms. Haas answered it would need to apply equally to both. Council President Olson observed 10% of a single family home would be different than 10% of an ADU. Councilmember Eck was curious how the 10% was determined, that the City can only get credit for 10%. There's always the risk that people will go gangbusters, but she wondered if there was a national figure that once a zoning change was made, what percentage of the community take advantage of it. Ms. McLaughlin said she would have to get back to the council on how the Department of Commerce came up with the 10%. When that is equated to ADUs in Edmonds, it amounts to approximately 80 per year and based on the City's permit volumes, she did not anticipate seeing in excess of 10%/year. There is an opportunity to make a case Edmonds City Council Approved Minutes March 5, 2024 Page 7 beyond 10% if the City can prove the market demand, but ADU permits do not show the demand will exceed 10%. Mr. Levy referred to the consultant's methodology memo which states the Department of Commerce reduced capacity of resultant ADU by 90% by applying a 10% maximum participation rate. This rate has been set by the Department of Commerce and accounts for feasibility considerations not already captured by this method as well as reasonable upper limits of the ratio of property owners who would be interested in redevelopment. Commerce believes that is a catchall that even after taking into consideration the things they haven't thought of, 10% max would participate. Councilmember Nand commented if the City wanted to incentivize ADUs as a solution to affordable housing and these are accompanied by state mandates, would there be a possibility of going to Department of Commerce to ask for preapproved plans. The design element is one of the cost burdens of building ADUs; preapproved designs would provide a level of control over what is built in the City stylistically, etc., and reduce the cost for homeowners. That seems to be win -win and if the state passes these mandates down to the City, that would be a reasonable ask. Mr. Levy said a couple of cities have programs; some have a competition asking local architects to submit designs and the top 10 are selected via a design process which are then the City's preapproved plans. Ms. McLaughlin said the project team has looked into that and she could see that as a next step in 2025. There are grants available which is how a lot of cities have done it. Mr. Levy said Leavenworth did it. With regard to the regulation that DADUs cannot be required to be less than 24 feet tall, Council President Olson asked if there is any variability in how that is measured. Ms. Haas answered the method for determining height for single family is based on the average original grade of the property. An architect would be asked to show the smallest rectangle around the footprint which includes bump outs, etc., and calculate the average of the four corners. The maximum height for single family is 25 feet from that point. For single family if the proposed height is 24-25 feet, once the foundation is laid, the building department requires a height survey. The same would be required for DADUs, calculate the average original grade and the height could not exceed 24 feet. Council President Olson said the City is choosing to take that approach or possibly it is the industry standard, but if there are options such as taking the slope into consideration so the DADU does not tower over the single family home, she would support exploring that to determine a better way. Councilmember Chen relayed his understanding the maximum height limit for DADUs is 24 feet but the main building's height limit is 25 feet. However, if the main house is a on hill and the ADU is on the downslope, it could be three stories and still not exceed the main house's 25 foot height limit. He asked if that would be something that could be entertained. Ms. Haas envisioned a main house and an ADU, if the unit is detached, it would be just around the four corners of the lower ADU so it could only be 25 feet. The single family would not be taken into account. If they are attached, the four corners of the entire structure would be used in the calculation. It would be relative to the space it is on, not the space that the other unit is on. Councilmember Chen said if the goal is to increase affordable housing, there should be exceptions to allow that to happen. Ms. McLaughlin said she was unsure that would be a barrier to development. Ms. Haas read from the state law, "cannot establish roof heights on an ADU of less than 24 feet unless the height limitation on the principal unit is less than 24 feet. Cannot impose a roof heigh limitation on ADUs less than the height limit that applies to the principal unit. If there is a 15 foot primary unit, because the code allows it to be up to 25 feet, an ADU would be allowed to be 24 feet." Council President Olson said her question was if the structures were not on the same level. Edmonds City Council Approved Minutes March 5, 2024 Page 8 Councilmember Dotsch said the City planned for growth in the past in areas where density was near transit, had infrastructure, etc. Now the City is planning for 2-6 times more growth in areas that never expected that kind of density. She asked how that was reconciled infrastructure wise. Envisioning capital projects to create capacity for density will be exponentially increased. Ms. McLaughlin said that question was considered in the comprehensive plan EIS and study of the infrastructure capacity. Councilmember Dotsch requested Engineering Program Manager Jeanie McConnell answer her question. Ms. McConnell said she was probably not the right person to answer that question and referred to the answer Ms. McLaughlin provided or anything additional that City Engineer Rob English could provide with regard to capital projects. ADJOURNMENT With no further business, the Council meeting was adjourned at 6:28 p.m. Edmonds City Council Approved Minutes March 5, 2024 Page 9