Council fails to reach accord on housing regs
June 9, 2008 · Updated 3:15 PM
"The Bainbridge Island City Council decided Monday to take a two-pronged approach to the suddenly contentious issue of affordable housing - a short-term fix for people now in the process, and a broad review of the whole concept.But even those actions won't be quick or easy.I think what you heard today indicates that virtually every member of the council wants changes in the comprehensive plan, Councilman Norm Wooldridge said.The immediate issue is the conditions under which affordable housing can be resold. City ordinances require homes to remain affordable for 30 years, meaning they could be purchased only by people who meet income ceilings similar to those of the original purchasers.At the urging of affordable-housing advocates, the council amended the comprehensive plan last November to scrap the 30-year affordability requirement. The new plan allows market-value sales, but requires the seller to pay a portion of their profits to the city to help fund new affordable projects. But last month, the council defeated an ordinance to implement the value-recapture provision, meaning that the comprehensive plan says one thing, and city ordinances say another.The inconsistency is not just a theoretical problem. A number of homes have been purchased under the guidelines that the council adopted last year, and questions have arisen about whether the city would seek retroactive changes. A larger number of affordable homes are now under construction or in the planning stage. And local builders say that until the ground rules are fixed, those homes can't be sold.I don't know how I can sell homes if I can't tell the buyers what the rules on resale are, said Jim Engle of Kitsap-Trident homes, which is building 15 affordable houses in the North Town Woods subdivision.The five council members at Monday's meeting - Christine Nasser and Jim Llewellyn did not attend - did not reach agreement about who would be grandfathered into the value-recapture plan. Instead, they asked for a staff report on exactly how many people would be involved under various scenarios.But it was apparent that there is no consensus on even this narrow issue.I would like to see it (the grandfathering) be as narrow as possible, Wooldridge said.I think we need to go back and take in everybody who is in the system, said Lois Curtis. I would include builders who have made commitments to buy lots under the (value-recapture) plan.At Monday's special meeting, the council listened to Roger Waid, deputy executive director of the Kitsap County Consolidated Housing Authority, explain why he recommended last fall that the city abandon the 30-year affordability requirement.Waid said that historically, median wages have risen much more slowly than housing prices, particularly on Bainbridge Island. The income ceilings for buyers of affordable housing are based on median wages. The result is that as time goes on, the gap widens between the market value of an affordable home and the payments an income-qualified buyer can make.That, Waid said, means that either the home must be sold well below market value, or that the buyer must be subsidized. Experience elsewhere has shown that if a family can't walk away with enough equity to make a down payment on a subsequent house, they tend to treat the property as a rental, Waid said. Where the resale price is limited, maintenance can suffer, he said, because the ultimate profit isn't large enough to reimburse the seller for extensive repairs or upgrades.The four-member council majority that voted against the value-recapture plan argued that the original concept was to create an inventory of affordable housing. They said that if an initially affordable home is re-sold at market price - ceasing to become affordable - then new affordable homes would have to be built, which would, in turn increase island density.We're an island with a limited amount of space, Wooldridge said. We don't have the option some cities have of simply getting bigger geographically.Rather than concentrate on owner-occupied affordable housing, Wooldridge said it might be more feasible to shift the emphasis to rental housing, which Waid said could be kept affordable.Rentals are important, Curtis agreed, but they meet a different need than owner-occupied housing.While Curtis said she is generally in favor of the current ordinance requiring developers to include a certain proportion of affordable housing, she said the law may need to be modified to avoid irregularities - like requiring developer Kelly Samson to build an affordable unit on a five-acre lot.For Councilwoman Liz Murray, the more fundamental question is whether the island even wants an affordable-housing program.What if we put it to a vote of the people and they rejected it? she asked.Mayor Dwight Sutton said that the state Growth Management Act requires each community to incorporate affordable housing into its comprehensive plan. That prompted Councilman Michael Pollock to suggest that the council should determine exactly what the state statute requires so that it could conform.For his part, Councilman Merrill Robison urged the city to put more emphasis on accessory dwelling units as a potential supply of affordable housing.The divergence of opinion suggest that the council may go back to square one and revisit the whole subject of affordable housing.I think this will take a lot of work, Pollock said. There are a lot of ideas out there. But it's an important issue that we really need to work on. "