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"Cottage plan touted for affordabilityThe city looks at ways to promote cheaper homes by size, not price."

"A new cottage industry - smaller, clustered homes - could be an entirely new approach to affordable housing on Bainbridge Island.That's one approach being considered by the city council, after a protracted debate over the current affordable-housing law that deals with price but not size.Maybe we should get away from all these rules and income levels and look instead at encouraging smaller and therefore more affordable houses, said councilman Michael Pollock.Pollock and the other members of the council's land-use committee are mulling a recent presentation by the mayor's affordable-housing task force. That group has generated a number of suggestions to improve housing availability in a community where the median home price approaches $400,000, requiring a six-figure income to qualify for a mortgage.The proposal generating the most immediate interest appears to be cottage homes, a concept said to have proved successful in Langley, on Whidbey Island.The plan would permit the construction of cottages - clustered homes whose size is strictly limited. Controlling the size, the theory goes, would automatically limit the price.The intent is to get away from city-mandated solutions and go more towards a market-rate focus, said Bainbridge architect Charles Wenzlau, a member of the mayor's task force.Langley's ordinance, which the Bainbridge land-use committee is studying for possible adoption here, limits cottages to 975 square feet. Height is limited to 18 feet, except for pitched roofs, which may reach 25 feet. The cottages have private yards, and are clustered around required open space. Parking is in detached garages that are also clustered, rather than being immediately adjacent to each individual home.The Langley project contains covenants that prohibit enlarging the homes if they are remodeled.This responds to changing demographics, which show that over 60 percent of U.S. households are one or two people, said Jim Soules, a former Bainbridge resident who developed the Langley project. The response has been overwhelming, Soules said.It was sold out before it was completed, and there is a waiting list for resales, he said, adding that six of the eight units were sold to single women, and the other two to couples.Housing density - a new approachThe Langley ordinance permits as many as 15 cottages on an acre. But cottage proponents point out that units-per-acre is a misleading gauge of population density.These are for single people or a couple, Pollock said. You don't increase population nearly as much as the increase in units.City long-range planner Marti Stave said the design of the eight-unit cottage development in Langley also decreases land-use impacts.You have one driveway instead of eight, Stave said. Because the pads are small, your impervious surfaces are a lot less than with eight bigger homes.Bainbridge Island's Comprehensive Plan already contains a provision endorsing cottage housing as a component of affordable housing. Under that provision, the housing would have to be initially available to people below a certain income level, but could thereafter be sold at market rates.But councilman Norm Wooldridge, a member of the land-use committee, said the discussion envisioned the homes being sold at market rates from the outset.Because they would be small, the houses by their nature would be relatively affordable, he said.The island development most closely resembling the Langley cottages is probably Cottages on Madison, the detached homes behind a white picket fence on the east side of Madison Avenue. Those homes are bigger than the Langley units - about 1,250 square feet apiece - are not clustered around common open space, and have attached garages.Jim Laughlin of Madison Avenue Development, which built the Cottages, said he believes Bainbridge would embrace the concept elsewhere on the island.I'd love to do something like that, Laughlin said, reviewing photographs of the Langley cottages. They would be a snap to sell.An issue sparking some debate is where such developments could be located. Land zoned multi-family is too expensive, Laughlin said, which could preclude cottages in the downtown Winslow core.Pollock, though, says that such developments could be dispersed throughout the island.The comprehensive plan and the Growth Management Act require us to disperse affordable housing geographically, he said. I see no reason why cottage-type clusters couldn't be in the outlying areas.City councilman Jim Llewellyn, another member of the land-use committee, said that from a land-use perspective, he believes clustered cottages make more sense in the area immediately surrounding the Winslow core.But Llewellyn, a home-builder by trade, said that there is no technical impediment to dispersing such developments. Septic systems can be built with a common drain-field serving a number of tanks, he said, so that cluster developments do not have to be on sewer lines.Other suggestions from the mayor's task force include reducing city permit and impact fees for affordable-housing developments, encouraging broader use of square-foot cluster-type zoning, which would regulate developable square footage rather than the number of units on a piece of land.Another proposal was to create a community land trust, which would buy land and lease it for affordable housing. By retaining underlying land ownership, the trust would take land costs out of the housing-cost equation, and would have some ability to control resale prices.Those suggestions will be considered, land-use committee members said, but not as immediately as the cottage-zoning proposal.Home resale settled, for nowThe council has also resolved its weeks-long debate over the existing affordable-housing ordinance, concluding that limiting the resale price of an affordable home is impractical.City ordinances require developers of more than eight units to include a proportion of units that are affordable to buyers at specified income levels. The income ceilings, defined as a percentage of the median Seattle-area income, range from very low levels up to roughly $80,000 per year. The ordinance requires that homes created under the ordinance remain affordable for 30 years, meaning that they can be re-sold only to buyers in the same income tier as the original buyers. But that rule deprived the original buyer of much of the market value of the home upon resale, because housing prices are rising much faster than median incomes.Affordable-housing advocates, who said the 30-year affordability rule was unworkable, proposed instead a proviso allowing resale at market price, but requiring the seller to pay the city a portion of the profits, which would in turn be placed in a fund to finance more affordable housing.Last December, the council approved administrative guidelines substituting the income-recapture provision for the 30-year affordability provision. But in September of this year, a 4-3 council majority voted against an ordinance to implement those guidelines, a vote that not only put the future rules in doubt, but clouded the status of homes that were purchased or proposed under the administrative guidelines.The council is taking a two-pronged approach to the issue.First, it adopted a grandfather provision for all developments where the final land-use application was filed before September 25. For those grandfathered homes, the developer or the owner (of a sold unit) may elect either 30-year affordability or value-recapture.Second, the council is considering an ordinance that would embrace the value-recapture concept, but encourage the original purchaser to stay in the house for longer.Under the proposed ordinance, a buyer could sell anytime at market value, but would have to refund a portion of the profit, defined basically as the sales price less the costs of sale, the original down payment, and that portion of the monthly payments that were applied to the loan principal.If the resale occurred in the second year, for example, the seller would have to refund 94 percent of the profit. The refund percentage, which drops slowly in the early years, declines to 75 percent in the seventh year, and to 51 percent in the 13th year.Between years 15 and 20, though, the refund drops sharply - from 42 percent in the 15th year to zero in the 20th.The council will consider public comment on the ordinance at its meeting tonight. But the proposal is endorsed by Pollock and Wooldridge, two of the four council members who opposed the income-recapture ordinance in September. This is not a perfect solution, said Wooldridge, who argued in September that the value-recapture ordinance would not preserve the affordability of homes built under the city ordinance.But this is a compromise from extremes, Wooldridge said. The thought is that each year, the owner is going to think of how much better off he will be if he waits one more year to sell. In that sense, it keeps the houses affordable. "

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