Bainbridge council agrees to another extension of development moratorium

Bainbridge Island’s building ban will continue until October.

The city council agreed last week to extend its development moratorium for another six months.

The controversial time-out on development — which was first passed in January 2018 — will run for a total of 21 months, unless city officials agree to exit the moratorium before its sunset date of Oct. 3.

The moratorium has been extended multiple times since its adoption. City officials said the latest moratorium extension was necessary because city hall needs more time to update its regulations on new subdivision standards and development design guidelines, as well as work on other issues, including affordable housing.

At last week’s meeting, Mayor Kol Medina told his fellow council members that he would be “personally uncomfortable” with another extension of the moratorium past the latest six-month addition.

The mayor warned that there may come a time when the moratorium should end even if there are still things left to do on the city’s regulatory work plan.

“I think it’s just kind of a dangerous pattern to get into, to keep extending it until we get to that perfect place where we’ve gotten everything done,” Medina said. “I don’t know that we’re ever going to get there.”

“At some point, we’re going to have to say, ‘We’ve done enough.’ And we just need to end this and, you know, continue on.”

Even so, Medina said he wouldn’t guarantee he would vote against another extension in six months, but said he had mixed feelings about it.

He also noted that the moratorium itself could be impacting one of the issues cited for the adoption of the building ban: affordable housing on the island.

“One of the things that contributes to housing not being as affordable on this island as it might otherwise be, is a lack of housing stock. And the longer we don’t allow any new developments of housing, it could have the opposite effect,” Medina said.

Councilwoman Sarah Blossom, however, said she did not expect the city to complete all of its objectives on affordable housing before ending the moratorium.

“I’m looking at the Inclusionary Zoning piece done,” she said. “Just that one.”

Medina’s comments drew a rebuke from the other side of the dais, from council members who challenged the notion that the amount of housing for sale in an area can impact home values.

“We’ve seen an increase in building on the island in the past five, six years, and we’ve also witnessed the median home price increase,” said Councilwoman Rasham Nassar.

“I don’t want to go down this rabbit hole, but I think the basic economics of supply and demand apply,” Medina responded. “That doesn’t mean that if we build some new houses, the price won’t go up. That’s not quite how it works.”

Councilman Ron Peltier also had his doubts.

“I don’t believe in the supply-and-demand thing when it comes to housing on Bainbridge Island,” Peltier said.

“I’ve lived here for 54 years now. And the supply of housing has probably quadrupled, and the cost has gone up exponentially.

“There’s just so much demand that simply increasing the supply isn’t going to reduce the cost. And we will continue to see the cost of housing go up except for certain projects,” Peltier said.

“I just don’t believe in the supply side theory; that if we just create more housing on Bainbridge, that it’s going to be affordable,” Peltier added.

Councilman Joe Deets said Bainbridge just doesn’t have the number of homes that other cities have, and pointed to nearby Poulsbo, where he said a housing project with 1,500 homes was in the offing on the other side of the Agate Pass Bridge.

“Other communities are exponentially increasing their housing stock. We’re not doing anything near, to that degree,” Deets said.

“Maybe Poulsbo will provide some affordable housing for Bainbridge,” he added.

Moving to end the conversation, Medina said his comments had been mischaracterized, and offered: “There are many things that lead to the price of housing.”

“One of them, clearly, is supply,” Medina said. “And all I’m trying to say is, the more we limit supply, the more impact that will have on prices.”

“Maybe this is a preview of discussions we’ll have in the future,” he added.

The cost of island homes, and the availability of affordable housing, has been the topic of much scrutiny by the city in recent years. The city created an Affordable Housing Task Force in 2017, and in its report to the council, issued last year, the task force said that affordability on Bainbridge “has worsened since the end of the Great Recession.”

The task force noted that “buyer activity is elevated due to the Puget Sound region’s strong job market,” but added that housing inventory had been “historically low” on the island.

“Over the last nine years, from 2009 through 2018, the new supply of residential units, of all types, has been severely limited,” the task force report noted.

“In April of 2009, there were 10,469 units on Bainbridge Island. In April of 2018, there were 11,061 units. This translates into an average growth of 66 residential units per year. This represents a cumulative annual growth rate of .63 percent per year (less than 1 percent per year). This limited supply on Bainbridge Island is well below demand in a way that increases housing costs and creates an affordability crisis, minimizing housing opportunity for those of moderate incomes in our community.”

More recently, in appraisals conducted for the city’s purchase of the Harrison medical center building, market experts noted that job growth in the Puget Sound region “continues to be one of the best performing areas of the nation” and remains a strong component influencing property purchases.

Residential properties on the island include single-family homes with some of the highest-priced properties in the greater Seattle region, and that through the summer of 2018, the residential market was strong on Bainbridge, “with homes selling quickly, and at times at prices higher than the asking price. A lack of inventory appears to be one of the main catalysts, particularly in downtown Winslow, where demand is strong,” according to one appraisal conducted for the city’s recent Harrison purchase.