Chapter 18A.65
AFFORDABLE HOUSING INCENTIVES Revised 3/18 Revised 12/18

Sections:

18A.65.010    Purpose.

18A.65.020    Applicability.

18A.65.030    General Provisions. Revised 3/18

18A.65.040    Financial Incentives. Revised 3/18

18A.65.050    Regulatory Incentives.

18A.65.060    Procedure for Review and Approval. Revised 12/18

18A.65.010 Purpose.

The purpose of this Chapter is to encourage the development of affordable housing for households earning 80 percent or less than Pierce County median household income (low-income affordable housing). The Growth Management Act (GMA) requires Pierce County to make adequate provisions for existing and projected housing needs of all economic segments of the community. The County recognizes that the real estate market provides adequate housing for those households in the upper economic segments; however, a combination of financial and regulatory incentives will be necessary to adequately provide for the needs of households whose incomes are at or below the County's median household income. The implementation of the incentives recognizes the public benefits affordable housing contributes to local communities and businesses. This new Chapter is also intended to cite all the incentives available to construct affordable housing for low-income households within one Chapter of the Pierce County Code. (Ord. 2009-48s2 § 1 (part), 2010)

18A.65.020 Applicability.

The affordable housing incentives for low-income households may be utilized for multi-family or single-family housing projects, including manufactured housing communities, within residential urban zones that include a minimum threshold of affordable units allocated for low-income households and other criteria as specified under each financial or regulatory incentive as listed in PCC 18A.65.040 and 18A.65.050. This Chapter shall not apply to proposed projects within the Residential Resource (RR) zone. Eligible housing projects within the HSF zone or single-family detached proposals with a density of 8 dwelling units or greater are required to be in compliance with the standards set forth in the small lot design standards (Chapter 18J.17 PCC) and may only utilize the financial incentives in this Chapter, if available. Development proposals shall meet the design standards set forth under the appropriate community plan standards except as stipulated under the regulatory incentives of this Chapter in PCC 18A.65.050. (Ord. 2009-48s2 § 1 (part), 2010)

18A.65.030 General Provisions. Revised 3/18

A.    Duration of Affordability. Affordable housing units created as a result of the provisions of this Chapter shall remain affordable for 50 years. The duration of affordability may be reduced to a minimum of 30 years if appropriate compensation is provided, consistent with RCW 36.70A.540. A recorded agreement, lien and covenant running with the land, binding all the assigns, heirs and successors of the applicant shall secure the affordability requirements. The recorded covenant must provide that if the property is converted to a use other than for low-income affordable housing as defined under this Chapter within the required affordability duration, the property owner must pay the applicable impact fees in effect at the time of conversion.

B.    Affordable Housing Incentives Program Agreement. An application for a proposed project that incorporates any of the incentives in this Chapter shall not be deemed completed until the applicant has submitted a signed Affordable Housing Incentives Program Agreement as a component of the application package. The agreement shall include, but not be limited to:

1.    Identification of all the incentives, monetary and non-financial, that the project proposes to incorporate;

2.    Identification of the minimum number of affordable housing units required to be provided in the project to qualify for use of Chapter 18A.65 PCC;

3.    Binding language that protects the County's interests in the event that a developer obtains affordable housing incentives through the platting or building phases but fails to provide low-income affordable housing;

4.    Language that requires documentation of recording the required low-income affordability provisions prior to the approval of a final plat or multi-family building permit;

5.    Language that recognizes the need to possibly modify the agreement if the submitted project requires alternation through the review and approval process; and

6.    Language that stipulates the conditions of a breach of contract action if the applicant fails to provide the required number of affordable housing units as stipulated under the agreement. If a breach of contract is determined, the County shall place a lien against all properties associated with the project.

C.    The affordable housing units shall be rented or sold to income-qualified households.

D.    Construction of Affordable Housing Units. If affordable housing units are constructed in phases or over a period of more than 12 months, a proportional amount of affordable housing units must be completed at or prior to the completion of related market rate housing units.

E.    Location/Appearance of Affordable Housing Units. When affordable housing units constructed under the provisions of this Chapter are intermixed with market rate housing, the general exterior design and appearance of the affordable housing units shall be compatible with the market rate housing units within the project.

F.    Monitoring Continued Affordability. The Pierce County Community Services Department shall be the responsible party to monitor the continued affordability of both rental and owner-occupied housing units.

G.    Resale of Affordable Homeownership Units. Affordable Housing units provided for under this Chapter may be sold or resold only to eligible low-income households or a nonprofit organization through the end of the required affordability duration. The proceeds of any equity profit for the County that is not reinvested to bring another housing unit down to an affordable price point will be set aside in a housing trust fund for future reinvestments. The Pierce County Community Services Department shall develop resale procedures using a shared-equity approach to allocate the economic benefits from increased home value over time between the homeowner and Pierce County. The procedures will include the following elements:

1.    The shared equity for the homeowner and Pierce County is calculated as the percentage difference between the market appraisal and price at which the unit is purchased;

2.    Recapture of Pierce County's investment in the home is based on the market value of the home at resale;

3.    Homeowner profit or loss is correlated with an increase or decrease in the housing unit's market appraisal, not longevity;

4.    Acknowledgement that the affordability duration is Pierce County's commitment for continued re-investment, if necessary, to maintain an affordable price point for low-income households;

5.    Pierce County's commitment to maintain a list of low-income households qualified to purchase the units at time of resale;

6.    Pierce County's interest in the home is secured by recorded instrument; and

7.    Pierce County's discretion to extend the duration of affordability to recover additional investments in the unit or contributions to maintain affordability.

Examples of Shared Equity Approach:

When affordable housing units are purchased, equity in the home is shared between the homeowner and Pierce County. The shared equity is calculated based on the percentage difference between the market appraisal value and the purchase price of the unit. The following provides two examples, one in which the value increases at the time of resale, and the other describing a potential loss in home value.

If a unit is appraised at $250,000 and based on the household size of a low-income household, the purchase price is $180,000, the County's equity would be 28 percent and the owner's equity share would be 72 percent. At the time of the home is resold, regardless of the period of time an owner has owned the unit, the homeowner shall receive 72 percent of the sale price. If the unit appraises for $275,000 after 10 years, the County's equity in the unit would be $77,000 (28 percent) and the homeowner's equity would be $198,000 (72 percent). The County's equity would be applied to reduce the resale price for the next low-income household to $198,000. The difference between the owners original purchase price and their equity share of the increase in the home's appreciation would be $18,000. The household size of potential qualified low-income purchasers and current interest rates may prompt Pierce County to buy-down the $198,000 price to an affordable price point.

Alternatively, if the unit appraises for $200,000 after 10 years (where the original appraised value was $250,000), the County's equity in the unit would be $56,000 (28 percent) and the homeowner's equity would be $144,000 (72 percent). The County's equity would be applied to reduce the resale price for the next low-income household to $144,000. The seller's share of the depreciated home value would represent a loss of $36,000 (based on the original purchase price of $180,000). The household size of potential qualified low-income purchasers and current interest rate may prompt Pierce County to buy-down the $144,000 price to an affordable price point.

H.    The guidelines for affordable housing, including the establishment of rental levels and housing prices, will be established and annually updated by the Department of Community Services through the consolidated housing and community development plan. The sale price of a housing unit shall be based on the affordable price point for the year the housing unit is offered for sale.

I.    Annual Report. An annual report shall be forwarded to the Pierce County Council prior to the budgeting process that provides details on all the projects that utilized the provisions of this Chapter. The report shall include, but is not limited to, the total number of housing units/lots constructed and the number of affordable units.

J.    Participation Measure. Every three years Pierce County Planning and Public Works (PPW) shall coordinate the review of applications submitted that incorporate the incentives provided for in this Chapter and calculate the amount of fees waived within each community plan area and the aggregate non-community plan urban area. Based on this review, PPW and Community Services may recommend modifications to the incentives, eligibility thresholds, fee waiver distribution and applicability to increase participation and achieve affordable housing goals.

(Ord. 2017-12s § 2 (part), 2017; Ord. 2009-48s2 § 1 (part), 2010)

18A.65.040 Financial Incentives. Revised 3/18

The financial incentives are intended to reduce the financial burden of carrying a loan through the review process and alleviate up-front financial costs to developers and builders associated with review and impact fees to reduce costs in exchange for providing affordable housing units.

A.    Expedited Permit Processing. Each multi-family and subdivision project pursuing an expedited permit process shall be considered a priority for all Pierce County departments with review responsibilities. A project manager within the Department of Planning and Public Works shall be assigned and responsible to coordinate the review process among all departments.

B.    Waived Fees.

1.    Fees listed under this Chapter may only be waived if sufficient funds are available through an alternative funding source and applied towards the applicable fund account to off-set revenue otherwise collected from an applicant.

2.    The total fee waivers available to all eligible projects within a community plan area with an urban area and the aggregate of non-community plan urban areas shall be restricted to 11 percent of the total off-setting funds available for any given year and no more than 25 percent of the available funding in any 5-year period.

3.    With the exception of a school impact fee, fee waivers may be applied to all housing units within a project.

4.    Fee waivers associated with a school impact fee shall only be applied to the low-income affordable housing units within a project.

5.    Fee waivers for the Traffic Impact Fee shall only be available when the project property is located within one-half mile of a regularly scheduled transit route.

Table 18A.65.040. Financial Incentives

Incentive

Minimum Threshold of Low-Income Affordable Housing Units/Lots

Limitation for Use of Incentive

Applicability

Specification of Incentive

Expedited Permit Processing

Building Permit Application

All Affordable Housing Units

Not Applicable

Only the Affordable Low-Income Units within a Project

All building permits for affordable housing units shall be a priority to review and process over other submitted market rate building permit applications by all Pierce County reviewing departments including, but not limited to, Planning and Public Works and Emergency Management (Fire Prevention Bureau).

Subdivision Applications (Short Plats, Preliminary Plats, Final Plats)

At least 20% of total housing units shall be low-income affordable units with a minimum of 10 total housing units within the development.

100% of project is low-income affordable units/lots with a minimum of 5 total units/lots.

Not to exceed a total of ten subdivisions per year, processed on a first come first served basis.

Entire Project Area

Preliminary plat, short plat and final plat subdivision applications and other related applications including, but not limited to, site development and sanitary sewer extension applications shall be a priority to review and process over other submitted applications for market rate projects by all Pierce County reviewing departments including, but not limited to, Planning and Public Works and Emergency Management (Fire Prevention Bureau).

Road/Sewer Design Review

At least 20% of total housing units shall be low-income affordable units with a minimum of 10 total housing units within the development.

100% of project is low-income affordable units/lots with a minimum of 5 total units/lots.

Not to exceed a total of ten subdivisions and multi-family projects per year, processed on a first come first served basis.

Entire Project Area

The applications associated with road/sewer design review shall be a priority to review and process over other submitted applications for market rate projects by all Pierce County reviewing departments.

Fee Waivers

Building Fee Waiver

All single-family or two-family (duplex) that are utilized as low-income affordable housing units shall be exempt from the building fees per PCC 17C.10.070 B.

At least 20% of total housing units shall be low-income affordable units with a minimum of 10 total housing units within the development.

A fee waiver or reimbursement shall only be available on a first come first served basis if alternative funding is available and transferred to PPW.

Entire Project Area

Any claim for an exemption for low-income housing must be made no later than the time of application for a building permit.

Traffic Impact Fee Waiver

All low-income housing units shall be exempt from the Traffic Impact Fee per PCC 4A.10.010 B.2.

At least 20% of total housing units shall be low-income affordable units with a minimum of 10 total housing units within the development.

The project property shall be located within one-half mile of a regularly scheduled transit route.

Entire Project Area

Any claim for an exemption for low-income housing must be made no later than the time of application for a building permit or site development activity permit.

School Impact Fee Waiver

All low-income affordable housing units shall be exempt from School Impact fees.

A fee waiver or reimbursement shall only be available on a first come first served basis if alternative funding is available and transferred to the appropriate School district account.

Only the Affordable Low-Income Units within a Project

Park Impact Fee Waiver

All low-income affordable housing units shall be exempt from Park Impact fees.

At least 20% of total housing units shall be low-income affordable units with a minimum of 10 total housing units within the development.

A fee waiver or reimbursement shall only be available on a first come first served basis if alternative funding is available and transferred to the Impact Fee fund account.

Entire Project Area

Sanitary Sewer System/ Facilities Charge Waiver

At least 20% of total housing units shall be low-income affordable units with a minimum of 10 total housing units within the development.

100% of project is low-income affordable units/lots with a minimum of 5 total units/lots.

Fee exemptions shall only be available on a first come first served basis if funding is authorized through the Pierce County sanitary sewer fund to off-set the waived fee.

Entire Project Area

Preliminary Plat/Formal Plat/Short Plat Application Fee Waiver

At least 20% of total housing units shall be low-income affordable units with a minimum of 10 total housing units within the development.

A fee waiver or reimbursement shall only be available on a first come first served basis if alternative funding is available and transferred to PPW.

Entire Project Area

All fees associated with the approval of a new plat provided for in Chapter 2.05 PCC including, but not limited to, the preliminary plat application, final plat application, design standards, environmental review, critical areas, and development engineering review shall be exempt.

Any claim for an exemption for low-income housing must be made no later than the time of application for a subdivision or site development activity permit. Any claim not so made shall be deemed waived.

(Ord. 2017-12s § 2 (part), 2017; Ord. 2016-51s § 3, 2016; Ord. 2015-25s § 2 (part), 2015; Ord. 2009-48s2 § 1 (part), 2010)

18A.65.050 Regulatory Incentives.

The regulatory incentives are intended to provide site design flexibility to developers in maximizing the bonus density provisions as provided for under this Chapter.

A.    Bonus Housing Units.

1.    The density within all zones, except the High Density Single-Family (HSF), may exceed the maximum density provisions called out in Title 18A PCC, Pierce County Development Regulations – Zoning, for the entire site (including that portion not accommodating low-income housing).

2.    Developments utilizing this provision shall be located on property within one-half mile of a regularly scheduled transit route.

3.    Accessory dwelling units shall not be permitted in developments that increase its allowed housing units through this density bonus provision. Refer to Table 18A.65.050 A. for the maximum low-income housing thresholds and permitted bonus units as provided for under this Chapter.

Table 18A.65.050 A. Bonus Housing Units

Minimum Threshold

Limitation for Use of Incentive

Bonus Units

Applicability

Example

Low-Income Rental Units

At least 10% of the total housing units permitted by the underlying zone density shall be affordable units for low-income households

Developments utilizing this provision shall be located on property within one-half mile of a regularly scheduled transit route.

1.5 bonus units of market rate housing for each low-income affordable housing unit.

Entire Project Area

10 affordable units = additional 15 market rate units

Low-Income Owner-Occupied Housing Units

1.0 bonus units of market rate housing for each low-income affordable housing unit.

Entire Project Area

10 affordable units = additional 10 market rate units

Density Limitation

Single-family residential zones = 133% x maximum density (MSF Max. Density = 6 x 1.33 = 7.98 du/a)

Multi-family/Mixed Use zones that allow for Multi-Family development = 120% x maximum density (CC Max. Density = 25 x 1.20 = 30 du/acre)

B.    Alternative Development Standards. Development proposals shall meet the design standards set forth under the appropriate community plan standards except as stipulated under the regulatory incentives described in Table 18A.65.050 B.

18A.65.050 B. Alternative Development Standards

Parking Requirements

Minimum Threshold

Applicability

Locational Criteria

Reduced Standard

At least 10% of the housing units within a project shall be affordable units for low-income households.

Only the Affordable Low-income Units within a project

The project shall be within a safe walking distance of a quarter mile of a scheduled transit route to reduce the number of required off-street parking stalls.

Off-street parking requirement for multi-family dwelling units may be reduced to one space per unit for each affordable low-income unit.

Only the Affordable Low-income Units within a project

Not applicable

Multi-family projects which maintain the standard off-street parking standard may increase the number of compact stalls to 75% of total parking stalls.

All Dwelling Units within a Project

Not applicable

Off-street parking shall not be required to be located adjacent to the housing unit it is intended to serve. Off-street parking may be provided for within a parking court within 100 feet of the housing unit it is intended to serve.

Parks and Open Space Requirements

Minimum Threshold

Applicability

Locational Criteria

Reduced Standards

At least 10% percent of the housing units within a project shall be affordable units for low-income households.

Entire Project Area

Proposed development is located within a walking distance of 1,320 feet to an existing public park or public school property with an on-site recreational area that is accessible by the general public after school hours.

The required active recreation area located within the project may be reduced at one to one ratio for the active recreation area provided within the public park and/or public school property and a safe walking route is provided.

Entire Project Area

Not applicable

On-site public trail construction and dedication may substitute on a square footage basis for open space when the proposed trail is identified within an adopted community plan. The following requirements shall be met: (a) The trail must be identified within an adopted community plan, (b) The trail shall be constructed to standards specified by the Pierce County Parks and Recreation Department, (c) The trail must be dedicated to, and accepted by, Pierce County as a public trail, and (d) Trail dedication and construction shall reduce the required common open space on a square footage basis. For example, if the area of land dedicated for trail purposes is 50,000 square feet, an equivalent reduction in open space shall be granted.

Lot Area/Lot Width

Minimum Threshold

Applicability

Locational Criteria

Reduced Standard

At least 10% of the housing units within a subdivision shall be affordable units for low-income households.

The number of lots which may have reduced lot area shall be equal to the number low-income affordable housing units within the project.

Not applicable

Lot area and lot width may be reduced by 20% of the minimum standard.

Low-income housing units or market rate units may be built on the lots with a reduced lot area.

Architectural Design that minimizes the visual impacts of the garage, provides for porches or covered stoops, and variety of roof forms are required. Refer to PCC 18J.17.040 D., 18J.17.050 B., G., and H.

Infill Compatibility

Minimum Threshold

Applicability

Locational Criteria

Reduced Standard

At least 20% of the housing units within a subdivision shall be affordable units for low-income households.

Entire Project Area

Not Applicable

When a new residential development is proposed adjacent to lots of less than one acre in size and of lesser density, at the discretion of the Hearing Examiner a minimum of one of the design requirements identified under PCC 18J.15.020 E. shall be required.

Road Standards

Minimum Threshold

Applicability

Locational Criteria

Reduced Standard

At least 20% of the housing units within a project shall be affordable units for low-income households.

Entire Project Area

Not Applicable

Projects may incorporate the narrower road widths of Neighborhood Streets and Access Lanes consistent with the road standards detailed in Chapter 18J.17 PCC, Pierce County Design Standards – Small Lot Design, and the "Manual on Design Guidelines and Specifications for Road and Bridge Construction in Pierce County," as published by the Pierce County Engineer. Each housing unit accessed through a Neighborhood Street or Access Lane shall have an interior sprinkler system that meets NFPA 13 D specifications within all living spaces.

Lots fronting a common open space are not required to front on a private or public road. A pedestrian entry easement shall be provided to all homes that do not front on a public road, park or common green as defined through Chapter 18J.17 PCC, Small Lot Design Standards. Pedestrian entry easements shall be a minimum of 15 feet wide with a minimum 5-foot sidewalk. All lots not fronting on a private or public road shall be within 150 feet of an emergency vehicle access.

(Ord. 2009-48s2 § 1 (part), 2010)

18A.65.060 Procedure for Review and Approval. Revised 12/18

A.    Customer Information Meeting. A Customer Information meeting shall be required for any land application that incorporates any financial or regulatory incentives provided for within this Chapter.

B.    Affordable Housing Incentives Program Agreement. An application for a proposed project that incorporates any of the incentives in this Chapter shall not be deemed completed until the applicant has submitted a signed Affordable Housing Incentives Program Agreement stipulated in PCC 18A.65.030 B. as a component of the application package.

C.    Reduction in Development Regulations. Land use proposals shall not be required to obtain a variance or PDD approval to incorporate any of the regulatory incentives provided for within this Chapter but shall be required if a development application proposes deviation to standards not addressed in this Chapter. Standards addressed in this Chapter shall not be modified through a variance or PDD approval.

D.    Required Documentation. Prior to the final approval of any land use application or building permit that incorporates any incentives provided for within this Chapter, the owner of the property shall provide a recorded agreement, lien and covenant running with the land, binding all the assigns, heirs and successors of the applicant shall secure the affordability requirements as stated under this Chapter. The recorded covenant must provide that if the property is converted to a use other than for low-income affordable housing as defined under this Chapter within the required affordability duration, the property owner must pay the applicable impact fees in effect at the time of conversion.

(Ord. 2017-89s § 2 (part), 2018; Ord. 2009-48s2 § 1 (part), 2010)