Section 1 of the ordinance introduced as Council Bill 118736 provides a statement of intent for implementation of this Chapter 23.58C that generally addresses the Council's intent as to an initial implementation phase of this Chapter 23.58C, the setting and changing of payment and performance amounts during that initial implementation phase, review of program performance, the amendment of payment and performance amounts after the initial implementation phase, and the establishment of additional processes for modifying dimensional development standards and/or payment and performance amounts.

(Ord. 125108, § 4, 2016.)

The purpose of this Chapter 23.58C is to implement an affordable housing incentive program authorized by RCW 36.70A.540, as it may be amended, as well as by other authority.

(Ord. 125108, § 4, 2016.)

This Chapter 23.58C contains requirements that apply only where provisions of the zone refer to this Chapter 23.58C, or through the terms of a contract rezone according to Section 23.34.004.

(Ord. 125108, § 4, 2016.)

Definitions in this Chapter 23.58C supersede any definitions of the same terms in Chapter 23.84A and Section 23.58A.004 for the purposes of provisions of this Chapter 23.58C, unless otherwise specified in this Chapter 23.58C.

"MHA-R unit" means a dwelling unit, small efficiency dwelling unit, live-work unit, or congregate residence sleeping room provided to comply with Chapter 23.58C through the performance option according to Section 23.58C.050.

"Unit" means a dwelling unit, small efficiency dwelling unit, live-work unit, or congregate residence sleeping room.

For purposes of this Chapter 23.58C, "dwelling unit" does not include an accessory dwelling unit.

(Ord. 126855, § 52, 2023; Ord. 125108, § 4, 2016.)

A.

General. If an applicant seeks approval of a permit for development as described according to subsection 23.58C.025.B, the applicant shall comply with this Chapter 23.58C, either through the payment option according to Section 23.58C.040 or the performance option according to Section 23.58C.050.

B.

Applicability. Except as provided according to subsection 23.58C.025.C, this Chapter 23.58C shall apply to development that includes units, whether such development occurs through one or more of the following:

1.

Construction of a new structure;

2.

Construction of an addition to an existing structure that results in an increase in the total number of units;

3.

Alterations within an existing structure that result in an increase in the total number of units; or

4.

Change of use that results in an increase in the total number of units.

C.

Exemption. Low-income housing is exempt from the requirements of this Chapter 23.58C.

D.

Relationship to incentive zoning. Where the provisions of the zone refer to this Chapter 23.58C and where bonus residential floor area or extra residential floor area may be achieved according to the provisions of the zone and/or Chapter 23.58A, the following provisions apply:

1.

All requirements to provide affordable housing to gain bonus residential floor area or extra residential floor area according to the provisions of the zone and/or Chapter 23.58A shall be satisfied solely by compliance with this Chapter 23.58C.

2.

Any non-housing requirements for achieving bonus residential floor area or extra residential floor area shall be satisfied according to the provisions of the zone and/or Chapter 23.58A.

3.

Extra residential floor area achieved in HR zones by transfer of development potential, providing neighborhood open space, or providing a neighborhood green street setback according to subsection 23.45.516.B.2 shall be excluded from the gross floor area of the development for purposes of subsection 23.58C.040.A.1 and any units contained in such extra floor area shall be excluded from the total number of units in the structure for purposes of subsection 23.58C.050.A.1.

(Ord. 126855, § 53, 2023; Ord. 125791, § 95, 2019; Ord. 125291, § 40, 2017; Ord. 125108, § 4, 2016.)

A.

General

1.

For any development to which this Chapter 23.58C applies, the Master Use Permit application and the first building permit application that includes the structural frame for the structure shall include the following:

a.

If the applicant elects the payment option, the amount of the required cash contribution according to subsection 23.58C.040.A;

b.

If the applicant elects the performance option, the number of MHA-R units required to be provided according to subsection 23.58C.050.A, the amount of any cash contribution according to subsection 23.58C.050.A.3.b, and a proposal for MHA-R units that meet the requirements of subsection 23.58C.050.C; and

c.

If the applicant seeks relief according to Sections 23.48.231 or 23.49.039 or seeks a modification according to subsection 23.58C.035.B or subsection 23.58C.035.C, the earliest application according to this subsection 23.58C.030.A.1 shall include requests for such relief or modifications including all supporting materials required for a decision on the requests.

2.

The Director shall, as a Type I decision and in consultation with the Director of Housing, determine:

a.

If the applicant elects to comply with this Chapter 23.58C through the payment option according to Section 23.58C.040, the amount of the cash contribution;

b.

If the applicant elects to comply with this Chapter 23.58C through the performance option according to Section 23.58C.050, the number of MHA-R units that shall meet the requirements of subsection 23.58C.050.C, the amount of any cash contribution according to subsection 23.58C.050.A.3.b, and the compliance of the proposal for MHA-R units that satisfy requirements of subsection 23.58C.050.C; and

c.

Any modification according to subsection 23.58C.035.B.

3.

The Director shall, as a special exception according to Chapter 23.76, Procedures for Master Use Permits and Council Land Use Decisions, in consultation with the Director of Housing, determine any modification according to subsection 23.58C.035.C.

4.

The final plans that include the structural frame for the structure shall demonstrate compliance with the requirements of Section 23.58C.040 or Section 23.58C.050 and state the ongoing requirements of Section 23.58C.050.

5.

If the applicant elects to comply with this Chapter 23.58C through the performance option according to Section 23.58C.050, the requirements of Section 23.58C.050 shall be considered terms of the first building permit that includes the structural frame for the structure.

6.

Unit substitution according to subsection 23.58C.050.C.6.f and conversion to ownership housing according to subsection 23.58C.050.C.6.i shall require a separate review and approval by the Director in consultation with the Director of Housing.

7.

The applicant for a project subject to this Chapter 23.58C shall pay housing review fees according to Section 22.900G.015.

B.

Issuance of Master Use Permit. Prior to the issuance of a Type II Master Use Permit, the applicant shall provide the following:

1.

If the applicant elects the payment option, the amount of the required cash contribution according to subsection 23.58C.040.A; or

2.

If the applicant elects the performance option, the number of MHA-R units required to be provided according to subsection 23.58C.050.A, the amount of any cash contribution according to subsection 23.58C.050.A.3.b, a proposal for MHA-R units that meet the requirements of subsection 23.58C.050.C, and a draft agreement according to subsection 23.58C.050.E.

C.

Issuance of building permit. Prior to issuance of the first building permit that includes the structural frame for the structure, the applicant shall provide the following:

1.

If the applicant elects to comply with this Chapter 23.58C through the payment option according to Section 23.58C.040:

a.

Final plans that include the structural frame for the structure showing the calculation of the amount of the required cash contribution according to subsection 23.58C.040.A; and

b.

Documentation from the Director of Housing of receipt of payment of the required cash contribution according to subsection 23.58C.040.A; or

2.

If the applicant elects to comply with this Chapter 23.58C through the performance option according to Section 23.58C.050:

a.

Final plans that include the structural frame for the structure that:

1)

Include the calculation of the number of MHA-R units required to be provided according to subsection 23.58C.050.A;

2)

Demonstrate compliance with the requirements of Section 23.58C.050 and state the ongoing requirements of Section 23.58C.050; and

3)

Include the calculation of the amount of any cash contribution according to subsection 23.58C.050.A.3.b;

b.

Documentation from the Director of Housing of receipt of payment of any cash contribution according to subsection 23.58C.050.A.3.b; and

c.

The executed and recorded agreement required according to subsection 23.58C.050.E.

3.

The applicant may change its election between performance and payment prior to issuance of the first building permit that includes the structural frame for the structure, provided that an applicant changing its election shall obtain any necessary approvals affected by the change in election. Review and approval of a change in election between performance and payment is a Type I decision, unless the requested change affects a modification according to subsection 23.58C.035.C.

(Ord. 126855, § 54, 2023; Ord. 125291, § 41, 2017; Ord. 125267, § 31, 2017; Ord. 125108, § 4, 2016.)

A.

General

1.

An applicant may request a modification, according to this Section 23.58C.035, of the amount of payment required according to subsection 23.58C.040.A or the amount of performance required according to subsection 23.58C.050.A.

2.

An applicant requesting a modification according to subsection 23.58C.035.B.2 shall have requested any available relief according to Sections 23.48.231 or 23.49.039, and the Director will evaluate relief according to Sections 23.48.231 or 23.49.039 before evaluating a modification according to subsection 23.58C.035.B.2. An applicant requesting a modification according to subsection 23.58C.035.C shall have requested any available relief according to Sections 23.48.231 or 23.49.039 and any available modification according to subsection 23.58C.035.B, and the Director will evaluate relief according to Sections 23.48.231 or 23.49.039 and a modification according to subsection 23.58C.035.B before evaluating a modification according to subsection 23.58C.035.C.

3.

The decision on any modification according to subsection 23.58C.035.B or subsection 23.58C.035.C shall specify a per-square-foot payment amount for the development and/or a percentage of units in each structure that shall meet the requirements of subsection 23.58C.050.C, as applicable, that can be applied to the final plans for the development or, in the case of a modification according to subsection 23.58C.035.C, an absolute payment amount for the development or number of units in each structure that shall meet the requirements according to subsection 23.58C.050.C along with a limitation on the degree of change in the final plans that is permissible without a redetermination of the modification.

B.

Inability to use certain capacity

1.

In a SM-U 75-240, SM-U/R 75-240, or SM-U 95-320 zone, the performance calculation amount according to Table B for 23.58C.050 shall be reduced to six percent and the payment calculation amount according to Table B for 23.58C.040 shall be reduced such that it is equal to the amount that applies in SM-U 85 if the applicant demonstrates that the site does not meet the minimum lot size required for a highrise structure according to subsection 23.48.615.A.2, or that one or more specific requirements of Sections 23.48.635, 23.48.645, and 23.48.646 would prevent a highrise development from being able to achieve an average highrise floor area of at least 7,500 square feet for stories subject to the highrise floor area limit according to Section 23.48.645. For purposes of this subsection 23.58C.035.B.1, the following shall apply:

a.

Financial feasibility shall not be considered in determining whether a threshold could be achieved.

b.

Recommendations by a Design Review Board shall not be considered requirements of this Title 23.

2.

In Downtown and SM-SLU zones listed in Table A for 23.58C.035, the payment calculation amount according to Table A for 23.58C.040 and the performance calculation amount according to Table A for 23.58C.050 shall be reduced if all of the conditions of subsections 23.58C.035.B.2.a and 23.58C.035.B.2.b are met. The amount of the reduction shall be as identified in subsections 23.58C.035.B.2.c and 23.58C.035.B.2.d.

a.

If the development is located in a DOC1 zone, the development has a lot size of at least 16,000 square feet.

b.

The applicant demonstrates that one or more specific requirements of this Title 23 directly prohibit the development from being able to achieve the maximum size threshold or the secondary size threshold according to Table A for 23.58C.035 for the zone in which the development is located. For purposes of this subsection 23.58C.035.B.2, the following shall apply:

1)

Financial feasibility shall not be considered in determining whether a threshold could be achieved.

2)

Recommendations by a Design Review Board shall not be considered requirements of this Title 23.

3)

The development shall be considered able to achieve the secondary or maximum size threshold according to Table A for 23.58C.035 if any portion of the development to which this Chapter 23.58C applies containing occupiable space could achieve that size threshold, excluding rooftop features.

c.

If the project cannot achieve the secondary size threshold for the applicable development standard in Table A for 23.58C.035, the payment calculation amount according to Table A for 23.58C.040 and the performance calculation amount according to Table A for 23.58C.050 shall be reduced by the maximum reduction percentage according to Table A for 23.58C.035.

d.

If the project can achieve the secondary size threshold, but cannot achieve the maximum size threshold for the applicable development standard in Table A for 23.58C.035, the payment calculation amount according to Table A for 23.58C.040 and the performance calculation amount according to Table A for 23.58C.050 shall be reduced by a percentage equal to the maximum reduction percentage in Table A for 23.58C.035 multiplied by the difference of the maximum size threshold minus the size that could be achieved under requirements of Title 23 and divided by the difference of the maximum size threshold minus the secondary size threshold, provided that the total reduction shall never be more than the maximum reduction percentage.

C.

Modification based on severe economic impact

1.

The purpose of this subsection 23.58C.035.C is to allow the Director to modify the amount of payment required according to subsection 23.58C.040.A or the amount of performance required according to subsection 23.58C.050.A if the applicant can demonstrate facts supporting a determination of severe economic impact at such a level that a property owner's constitutional rights may be at risk.

2.

For purposes of this subsection 23.58C.035.C, the Director is not making a determination of the constitutional rights of a property owner, but instead is reviewing the credibility and strength of facts demonstrating severe economic impact.

3.

The Director may, as a special exception according to Chapter 23.76, waive or reduce the amount of payment required according to subsection 23.58C.040.A or the number of units required to meet the requirements according to subsection 23.58C.050.C if the applicant shows that application of the requirements of this Chapter 23.58C would:

a.

Create severe economic impact by depriving a property owner of all economically beneficial use of the property; or

b.

Create severe economic impact, not reaching deprivation of all economically beneficial use, but reaching the level of an undue burden that should not be borne by the property owner.

4.

In determining whether there is a severe economic impact reaching the level of an undue burden that should not be borne by the property owner, the Director may weigh the following nonexclusive factors:

a.

The severity of the economic impact caused by the application of the requirements of this Chapter 23.58C;

b.

The degree to which the requirements of this Chapter 23.58C were or could have been anticipated;

c.

The extent to which alternative uses of the property or configurations of the proposed development would alleviate the need for the requested waiver or reduction;

d.

The extent to which any economic impact was due to decisions by the applicant and/or property owner; and

e.

Other factors relevant to whether the burden should be borne by the property owner.

5.

The waiver or reduction may be approved only to the extent necessary to grant relief from the severe economic impact.

6.

A request to the Director for a modification according to this subsection 23.58C.035.C shall include, at a minimum, all of the following:

a.

A description of the requested waiver or reduction, including the proposed payment or performance amount;

b.

Documentation showing that any relief available according to Sections 23.48.231 and 23.49.039 or subsection 23.58C.035.B would not eliminate the need for the requested waiver or reduction;

c.

The identity of the property owner and the date of the owner's acquisition of the property;

d.

Documentation showing the use of the property at the time of the request or, if the property is vacant at that time, the use of the property prior to commencement of vacancy;

e.

Documentation explaining and supporting the claim of economic impact; and

f.

Documentation showing that a different development configuration that satisfied the requirements of this Chapter 23.58C would not alleviate the need for the requested waiver or reduction.

7.

The applicant shall provide any additional information as may be required by the Director to make a determination on the request. The applicant shall have the burden of proving by a preponderance of the evidence that a waiver or reduction authorized according to this subsection 23.58C.035.C is justified.

8.

None of the following, standing alone and without consideration of the full range of relevant factors including those according to subsection 23.58C.035.C.4, shall be a sufficient basis for the Director to grant a waiver or reduction authorized according to this subsection 23.58C.035.C:

a.

The fact of a decrease in property value;

b.

The fact that a property owner is unable to utilize the full amount of any increase in residential development capacity enacted in connection with implementation of this Chapter 23.58C in the zone in which the property is located; or

c.

The fact that any such increase in residential development capacity, combined with the requirements of this Chapter 23.58C, did not leave the property owner in a better financial position than would have been the case with no increase in residential development capacity and no application of the requirements of this Chapter 23.58C.

9.

In any appeal to the Hearing Examiner, the parties will have an additional opportunity to make a record on the factual issues consistent with due process.

(Ord. 127099, § 49, 2024; Ord. 125371, § 18, 2017; Ord. 125291, § 42, 2017; Ord. 125267, § 32, 2017; Ord. 125108, § 4, 2016.)

A.

Payment amount

1.

An applicant complying with this Chapter 23.58C through the payment option shall provide a cash contribution to the City, calculated by multiplying the payment calculation amount per square foot according to Table A or Table B for 23.58C.040 and Map A for 23.58C.050, as applicable, by the total gross floor area in the development, excluding the floor area of parking located in stories, or portions of stories, that are underground, and excluding any floor area devoted to a domestic violence shelter, as follows:

a.

In the case of construction of a new structure, the gross floor area in residential use and the gross floor area of live-work units;

b.

In the case of construction of an addition to an existing structure that results in an increase in the total number of units within the structure, the gross floor area in residential use and the gross floor area of live-work units in the addition;

c.

In the case of alterations within an existing structure that result in an increase in the total number of units within the structure, the gross floor area calculated by dividing the total gross floor area in residential use and gross floor area of live-work units by the total number of units in the proposed development, and multiplying that quotient by the net increase in units in the development;

d.

In the case of change of use that results in an increase in the total number of units, the gross floor area that changed to residential use or live-work units; or

e.

Any combination of the above.

2.

Automatic adjustments to payment amounts. The amounts for payment calculations according to Table A and Table B for 23.58C.040 shall automatically adjust annually on March 1, starting in 2024, by an amount in proportion to the increase, if any, for January 1 through December 31 of the prior calendar year, in the Consumer Price Index, All Urban Consumers, Seattle-Tacoma-Bellevue, WA, Shelter (1982-84=100), as determined by the U.S. Department of Labor, Bureau of Labor Statistics, or successor index.

B.

Use of cash contributions

1.

The Director of Housing shall be authorized to accept all cash contributions on behalf of the City. Cash contributions shall be deposited by the Director of Housing in a special account and shall be used for purposes authorized by RCW 36.70A.540. Earnings on balances in the special account shall accrue to that account. At least five percent of total cash contributions on a yearly basis shall be dedicated to support ownership housing.

2.

Income levels

a.

Rental housing supported by cash contributions shall be rent- and income-restricted to serve households with incomes no greater than 60 percent of median income for a minimum period of 50 years, with an expectation of ongoing affordability.

b.

Ownership housing supported by cash contributions shall be priced to serve and sold to households with incomes no greater than 80 percent of median income for a minimum period of 50 years, with an expectation of ongoing affordability.

3.

Location. For purposes of determining the location for use of cash contributions, the City shall consider the extent to which the housing supported by cash contributions advances the following factors:

a.

Affirmatively furthering fair housing choice;

b.

Locating within an urban center or urban village;

c.

Locating in proximity to frequent bus service or current or planned light rail or streetcar stops;

d.

Furthering City policies to promote economic opportunity and community development and addressing the needs of communities vulnerable to displacement; and

e.

Locating near developments that generate cash contributions.

(Ord. 126855, § 55, 2023; Ord. 126157, § 46, 2020; Ord. 125792, § 10, 2019; Ord. 125791, § 96, 2019; Ord. 125371, § 19, 2017; Ord. 125360, § 3, 2017; Ord. 125291, § 43, 2017; Ord. 125267, § 33, 2017; Ord. 125108, § 4, 2016.)

A.

Performance amount

1.

An applicant complying with this Chapter 23.58C through the performance option shall provide, as part of the units to be developed in each structure, a number of MHA-R units that meet the requirements according to subsection 23.58C.050.C calculated by multiplying the percentage set aside according to Table A or Table B for 23.58C.050 and Map A for 23.58C.050, as applicable, by the total number of units to be developed in each structure, excluding units in a domestic violence shelter.

2.

If the number of MHA-R units that meet the requirements according to subsection 23.58C.050.C calculated according to subsection 23.58C.050.A.1 equals less than two, the applicant shall:

a.

Round up to two units; or

b.

Provide one dwelling unit that meets the requirements according to subsection 23.58C.050.C that is three bedrooms or larger, as determined by the Director of Housing.

3.

If the number of MHA-R units that meet the requirements according to subsection 23.58C.050.C calculated according to subsection 23.58C.050.A.1 equals two or more and includes a fraction of a unit, the applicant shall:

a.

Round up to the nearest whole unit; or

b.

Round down to the nearest whole unit and pay a cash contribution for the fraction of a unit not otherwise provided, calculated by multiplying the payment calculation amount per square foot according to Table A or Table B for 23.58C.040 and Map A for 23.58C.050, as applicable, by the total gross floor area to be developed as measured according to subsection 23.58C.040.A.1, multiplying that product by the fraction of a unit not provided, and dividing the resulting number by the total number of units required to be provided based on the calculation according to subsection 23.58C.050.A.1. Use of cash contributions according to this subsection 23.58C.050.A.3.b shall be governed according to subsection 23.58C.040.B.

4.

When the applicant elects to comply with this Chapter 23.58C through the performance option for a development that contains multiple structures and the calculation according to subsection 23.58C.050.A.1 results in fractions of MHA-R units in more than one structure, the Director may, as a Type I decision in consultation with the Director of Housing, allow such fractions of units to be combined, provided:

a.

If the sum of the combined fractions of units calculated according to this subsection 23.58C.050.A.4 equals fewer than two, the applicant shall:

1)

Round up to two units; or

2)

Provide one dwelling unit that meets the requirements according to subsection 23.58C.050.C that is three bedrooms or larger, as determined by the Director of Housing;

b.

If the sum of the combined fractions of units calculated according to this subsection 23.58C.050.A.4 equals two or more and includes a fraction of a unit, the applicant shall:

1)

Round up to the nearest whole unit; or

2)

Round down to the nearest whole unit and pay a cash contribution for the fraction of a unit not otherwise provided, calculated according to subsection 23.58C.050.A.3.b; and

c.

The construction of the structure(s) containing the units that meet the requirements according to subsection 23.58C.050.C shall be completed at the same time or at an earlier time than completion of construction of other structures in the development containing units.

Map A for 23.58C.050
Payment and performance areas: high, medium, and low

B.

Duration. The obligation, as to a structure that includes MHA-R units to whose development this Chapter 23.58C applies according to subsection 23.58C.025.B, to provide units that meet the requirements of subsection 23.58C.050.C in the amount required according to subsection 23.58C.050.A, subject to any applicable modifications, shall last:

1.

If rental MHA-R units are provided to comply with this Chapter 23.58C:

a.

For a period of 75 years from the date of certificate of occupancy or, if a certificate of occupancy is not required, from the date of the final building permit inspection, for the development to which this Chapter 23.58C applies according to subsection 23.58C.025.B, or

b.

Until such earlier time when:

1)

The structure is demolished, or its use is changed, so as to eliminate all of the units to whose development this Chapter 23.58C applies according to subsection 23.58C.025.B in that structure, and the requirements of subsection 23.58C.050.C.6.j are met; or

2)

All of the units to whose development this Chapter 23.58C applies according to subsection 23.58C.025.B in the structure are converted to ownership housing, and the requirements of subsection 23.58C.050.C.6.i are met; or

2.

If ownership MHA-R units are provided to comply with this Chapter 23.58C, for a period of 75 years from the date of certificate of occupancy or, if a certificate of occupancy is not required, from the date of the final building permit inspection, for the development to which this Chapter 23.58C applies according to subsection 23.58C.025.B.

C.

Performance requirements. MHA-R units provided to comply with this Chapter 23.58C through the performance option shall meet the following requirements:

1.

Distribution. MHA-R units shall be generally distributed throughout each structure in the development containing units.

2.

Comparability. MHA-R units shall be comparable to the other units to be developed in terms of the following:

a.

Status as a dwelling unit, live-work unit, or congregate residence sleeping room;

b.

Number and size of bedrooms and bathrooms;

c.

Net unit area measured according to subsection 23.86.007.B;

d.

Access to amenity areas;

e.

Functionality; and

f.

Term of the lease.

3.

Eligible households. MHA-R units shall serve only:

a.

At initial occupancy by a household:

1)

For a rental MHA-R unit with net unit area of 400 square feet or less, households with incomes no greater than 40 percent of median income;

2)

For a rental MHA-R unit with net unit area of greater than 400 square feet, households with incomes no greater than 60 percent of median income;

3)

For an ownership MHA-R unit, households with incomes no greater than 80 percent of median income, and that meet a reasonable limit on assets. The Director of Housing shall establish by rule the method to establish a reasonable limit on assets.

b.

At the time of annual certification according to subsection 23.58C.050.C.6.c:

1)

For a rental MHA-R unit with net unit area of 400 square feet or less, households with incomes no greater than 60 percent of median income;

2)

For a rental MHA-R unit with net unit area of greater than 400 square feet, households with incomes no greater than 80 percent of median income.

4.

Affirmative marketing. MHA-R units shall be affirmatively marketed to attract eligible households from all racial, ethnic, and gender groups in the housing market area of the property, particularly to inform and solicit applications from households who are otherwise unlikely to apply for housing in the development. Proposed marketing efforts shall be submitted to the Office of Housing for review and approval. Records documenting affirmative marketing efforts shall be maintained and submitted to the Office of Housing upon request.

5.

Affordable housing; no other restrictions. MHA-R units and restricted units provided for any other reason, including a property tax exemption or loans and grants, must be different units.

6.

Additional requirements for rental MHA-R units provided through the performance option

a.

Rent levels. Monthly rent for MHA-R units shall not exceed 30 percent of 60 percent of median income or, in the case of rental units with net unit area of 400 square feet or less, 30 percent of 40 percent of median income. For purposes of this subsection 23.58C.050.C.6.a, "monthly rent" includes a utility allowance for heat, gas, electricity, water, sewer, and refuse collection, to the extent such items are not paid for tenants by the owner, and any recurring fees that are required as a condition of tenancy.

b.

Limitation on charges. Fees charged to eligible households upon move-in or transfer within the development shall be limited to a reasonable level to be established by the Director of Housing by rule. No tenant of a rental MHA-R unit may be charged fees for income verifications or reporting requirements related to this Chapter 23.58C.

c.

Annual certification, third party verification

1)

The owner of the structure that includes the MHA-R units shall obtain from each tenant, no less than annually, a certification of household size and annual income in a form acceptable to the City. The owner shall examine the income of each tenant household in accordance with 24 CFR 5.609, with guidance from the HUD Occupancy Handbook 4350.3, Chapter 5. The owner also shall examine the income and household size of any tenant at any time when there is evidence that the tenant's written statement was not complete or accurate. If so requested by the City, the owner shall obtain such certifications and/or examine incomes and household sizes at any other times upon reasonable advance notice from the City. The owner shall maintain all certifications and documentation obtained according to this subsection 23.58C.050.C.6.c.1 on file for at least six years after they are obtained, and shall make them available to the City for inspection and copying promptly upon request.

2)

The owner of the structure that includes MHA-R units shall attempt to obtain third party verification whenever possible to substantiate income at each certification, which shall include contacting the individual income source(s) supplied by the household. The verification documents shall be supplied directly to the independent source by the owner and returned directly to the owner from the independent source. In the event that the independent source does not respond to the owner's faxed, mailed, or emailed request for information, the owner may pursue oral third party verification. If written or oral third party documentation is not available, the owner may accept original documents (pay stubs, W-2, etc.) at the discretion of the Director of Housing and shall document why third party verification was not available. At the discretion of the Director of Housing, the owner may accept tenant self-certifications after the initial income verification and first annual recertification.

d.

Reporting. Periodically as may be required by the Director of Housing, but no less than annually, the owner of the structure that includes the MHA-R units shall submit to the Office of Housing a written report demonstrating compliance with and housing outcomes of this Chapter 23.58C. The report shall include required information and supporting documentation, verified upon the owner's oath or affirmation and in a form prescribed by the Office of Housing. The Director of Housing is authorized to assess a late fee of $50 per day, which shall accrue until the report is submitted, starting 14 days from the date of the Office of Housing's notice that the report is overdue.

e.

Annual fee. The owner of the units shall pay the Office of Housing an annual fee of $190 per MHA-R unit for the purpose of monitoring compliance with the requirements of this Section 23.58C.050. The fee shall automatically adjust annually on March 1, starting in 2024, by an amount in proportion to the increase, if any, for January 1 through December 31 of the prior calendar year, in the Consumer Price Index, All Urban Consumers, Seattle-Tacoma-Bellevue, WA, All Items (1982-1984=100), as determined by the U.S. Department of Labor, Bureau of Labor Statistics or successor index.

f.

Over-income households; unit substitution. If, based on any certification, a previously eligible household occupying a rental unit provided through the performance option is determined to be ineligible due to exceeding the income limits according to subsection 23.58C.050.C.3.b, the owner of the development to which this Chapter 23.58C applies shall, through the process according to subsection 23.58C.030.A.6, designate a comparable substitute rental unit within the development, as approved by the Director of Housing, as soon as such a unit becomes available, and upon such designation the requirements of this subsection 23.58C.050.C shall transfer to the substitute unit. Upon such determination that a previously eligible household is ineligible, the owner shall promptly give the ineligible household notice of such determination and notice that the requirements of this subsection 23.58C.050.C will transfer to a substitute unit when such unit becomes available. Upon the transfer of the requirements, the owner shall give the ineligible household six months' notice prior to any rent increase.

g.

Maintenance, insurance. MHA-R units, and the structure in which they are located, shall be maintained by the owner in decent and habitable condition, including the provision of adequate basic appliances. The owner shall keep such units, and the structure in which they are located, insured by an insurance company licensed to do business in the state of Washington and reasonably acceptable to the City, against loss by fire and other hazards included with broad form coverage, in the amount of 100 percent of the replacement value.

h.

Casualty

1)

If a rental unit provided through the performance option is destroyed or rendered unfit for occupancy by casualty that does not affect all of the other units in the development to which this Chapter 23.58C applies, the owner of the development shall, through the process according to subsection 23.58C.030.A.6, designate a comparable substitute rental unit within the development, as approved by the Director of Housing, as soon as such a unit becomes available, which the tenant household of the unit affected by casualty shall be allowed to move into, and upon such designation the requirements of this subsection 23.58C.050.C shall transfer to the substitute unit.

2)

If all of the units in the development to which this Chapter 23.58C applies are substantially destroyed by casualty, including by earthquake or fire, the requirements of this subsection 23.58C.050.C shall terminate.

i.

Conversion of housing from rental to ownership. If all of the units to whose development this Chapter 23.58C applies according to subsection 23.58C.025.B in a structure are converted to ownership housing, including through a conversion to condominiums, prior to 75 years from the date of certificate of occupancy or, if a certificate of occupancy is not required, from the date of the final building permit inspection, for the development to which this Chapter 23.58C applies according to subsection 23.58C.025.B:

1)

The owner of the development shall, at the time of such conversion, either pay to the City a payment in lieu of continuing affordability or convert the rental MHA-R units to ownership MHA-R units, as follows:

a)

Where a payment in lieu of continuing affordability is made, the amount of the payment shall be equal to the amount of the cash contribution according to subsection 23.58C.040.A that would have been required based on the payment amount in effect on the vesting date for the Master Use Permit under Section 23.76.026 or, if no Master Use Permit is required, on the filing date for the valid and fully complete permit application adjusted by an amount in proportion to the increase, if any, in the Consumer Price Index, All Urban Consumers, Seattle-Tacoma-Bellevue, WA, Shelter (1982-1984=100), as determined by the U.S. Department of Labor, Bureau of Labor Statistics, or successor index, from the most recent month for which data are available on or before the vesting date for the Master Use Permit under Section 23.76.206 or, if a Master Use Permit is not required, the filing date for the valid and fully complete permit application, to the most recent month for which data are available at the time of payment, multiplied by the percentage in Table C for 23.58C.050 that corresponds to the number of years that the rental MHA-R units satisfied the requirements of this subsection 23.58C.050.C. The City shall use the payment to support long-term housing affordability in The City of Seattle consistent with applicable statutory requirements.

b)

Where rental MHA-R units are converted to ownership MHA-R units, the converted units shall meet the requirements of subsections 23.58C.050.C.1 through 23.58C.050.C.5 and subsection 23.58C.050.C.7.

2)

If the units to whose development this Chapter 23.58C applies according to subsection 23.58C.025.B are in multiple structures, conversion to ownership housing of such units in an individual structure shall not be a basis for reducing the number of rental MHA-R units in the other structures.

3)

If a rental unit provided through the performance option is converted to a condominium, the owner shall comply with the requirements of Section 22.903.030 and Section 22.903.035, the requirement of RCW 64.34.440(2) to offer to convey the unit to the tenant who leases the unit, and any other applicable requirements.

j.

Demolition or change of use

1)

If the units to whose development this Chapter 23.58C applies according to subsection 23.58C.025.B are in a single structure and the structure is demolished, or its use is changed, prior to 75 years from the date of certificate of occupancy or, if a certificate of occupancy is not required, from the date of the final building permit inspection, for the development to which this Chapter 23.58C applies according to subsection 23.58C.025.B, so as to eliminate all of the units to whose development this Chapter 23.58C applies according to subsection 23.58C.025.B in that structure, the owner of the development shall pay to the City a payment in lieu of continuing affordability for each rental unit provided through the performance option that is eliminated, as follows:

a)

The payment shall be based on the difference between the monthly restricted rent according to subsection 23.58C.050.C.6.a for each rental unit provided through the performance option that is eliminated and the average monthly rent of a comparable unit according to subsection 23.58C.050.C.2 that is not subject to rent and income restrictions and is located in the same payment and performance area as shown on Map A for 23.58C.050, multiplied by the typical number of months between demolition of multifamily housing on a property and completion of redevelopment of a property in the zone in which the eliminated rental unit is located, not to exceed 30 months. The Director shall by rule establish an appropriate methodology and inputs for determining the payment amount in particular zones.

b)

The City shall use the payment to support long-term housing affordability in The City of Seattle, including but not limited to providing rental assistance to the tenants of rental MHA-R units that were eliminated.

2)

If the units to whose development this Chapter 23.58C applies according to subsection 23.58C.025.B are in multiple structures and an individual structure is demolished, or its use is changed, prior to 75 years from the date of certificate of occupancy or, if a certificate of occupancy is not required, from the date of the final building permit inspection, for the development to which this Chapter 23.58C applies according to subsection 23.58C.025.B, so as to eliminate all of the units to whose development this Chapter 23.58C applies according to subsection 23.58C.025.B in the individual structure, the owner of the development shall:

a)

Except as provided according to subsection 23.58C.050.C.6.j.2.b, pay to the City a payment in lieu of continuing affordability according to subsection 23.58C.050.C.6.j.1.a for each rental unit provided through the performance option that is eliminated; or

b)

If a rental unit that is eliminated resulted from the combination of fractions of units according to subsection 23.58C.050.A.4, designate, subject to review by the Director in consultation with the Director of Housing, a comparable substitute rental unit within the other structures to replace each such unit that is eliminated or, if such designation is not possible, pay to the City a payment in lieu of continuing affordability according to subsection 23.58C.050.C.6.j.1.a.

c)

Demolition or change of use of an individual structure shall not be a basis for reducing the number of rental MHA-R units in the other structures and any comparable substitute rental units shall be in addition to any existing rental MHA-R units in the other structures.

7.

Additional requirements for ownership MHA-R units provided through the performance option

a.

Affordable sale price; down payment. The initial sales price for an ownership unit provided through the performance option shall be an amount according to which total ongoing housing costs do not exceed 35 percent of 65 percent of median income, in order to allow for equity growth for individual homeowners while maintaining affordability for income-eligible buyers. The Director of Housing shall establish by rule the method for calculating the initial sales price including standard assumptions for determining upfront housing costs, including the down payment, and ongoing housing costs, which shall include mortgage principal and interest payments, homeowner's insurance payments, homeowner or condominium association dues and assessments, and real estate taxes and other charges included in county tax billings. The Director of Housing may establish a maximum down payment amount for eligible households at initial sale of an ownership unit. The applicant for a development to which this Chapter 23.58C applies shall be responsible for any costs incurred in the initial sale of an ownership unit necessary to ensure compliance with this Chapter 23.58C, including but not limited to marketing to eligible households, income verification, buyer education, and verification of buyer financing.

b.

Affordable resale price. For an ownership unit provided through the performance option, the sale price for sales subsequent to the initial sale shall be calculated to allow modest growth in homeowner equity while maintaining long-term affordability for income-eligible buyers. All buyers of an ownership unit subsequent to the initial sale shall be households with incomes no greater than 80 percent of median income at initial occupancy. The Director of Housing shall by rule:

1)

Establish the method for calculating the resale price and may establish a maximum down payment amount for eligible households at resale,

2)

Establish specific requirements for documents ensuring affordability requirements are met at resale, and

3)

Provide for recovery of reasonable administrative costs.

c.

Other restrictions. An eligible household purchasing an ownership unit provided through the performance option, either at initial sale or resale, shall:

1)

Occupy the unit as its principal residence for the duration of its ownership and shall not lease the unit, unless the Director of Housing approves a limited short-term exception, and

2)

Comply with all other rules established by the Director of Housing as necessary to maintain the long-term viability of the MHA-R unit. Such rules may include, but are not limited to, refinancing approvals and debt limits; limits on credit for capital improvements at the time of resale; requirements for basic maintenance, inspections, and compliance procedures; minimum insurance requirements; obligations to provide information regarding compliance when and as requested; and fees to cover the full costs of calculating the maximum sales price at resale, marketing to eligible households, and screening and selecting eligible households to purchase the unit at resale.

d.

Annual fee. The owner of the ownership unit shall pay the Office of Housing an annual fee, payable in 12 equal payments, for the purpose of monitoring compliance with the requirements of this Section 23.58C.050. The initial fee shall be established by the Director of Housing by rule. The annual fee shall automatically adjust annually on March 1, starting in 2024, by an amount in proportion to the increase, if any, for January 1 through December 31 of the prior calendar year, in the Consumer Price Index, All Urban Consumers, Seattle-Tacoma-Bellevue, WA, All Items (1982-1984=100), as determined by the U.S. Department of Labor, Bureau of Labor Statistics or successor index.

e.

Ongoing stewardship. Either before or after the initial sale, the Director of Housing is authorized to designate an agency or organization with sufficient capacity, as approved by the Director of Housing, to perform ongoing stewardship and management functions for ownership MHA-R units, including but not limited to the following:

1)

Calculating maximum sale prices;

2)

Marketing sales to eligible households;

3)

Screening, educating, and selecting eligible households;

4)

Approving buyer financing; and

5)

Managing successive resales to eligible households.

f.

Periodically as may be required by the Director of Housing, but no less than annually, the applicant or third-party stewardship entity, as applicable, shall submit to the Office of Housing a written report demonstrating compliance with and housing outcomes of this Section 23.58C.050. The report shall include required information and supporting documentation, verified upon the owner's oath or affirmation and in a form prescribed by the Office of Housing. The Director of Housing is authorized to assess a late fee of $50 per day, which shall accrue until the report is submitted, starting 14 days from the date of the Office of Housing's notice that the report is overdue.

8.

Additional requirements for MHA-R units provided through the performance option on a site other than the same lot as the development required to comply with this Chapter 23.58C

a.

Equal or better - comparability of units. The applicant shall demonstrate to the satisfaction of the Director of Housing that MHA-R units on a site other than the same lot as the development required to comply with this Chapter 23.58C are equal to or better than MHA-R units on the same lot.

b.

Location. MHA-R units on a site other than the same lot as the development required to comply with this Chapter 23.58C shall be located in a Lowrise or RSL zone. In addition, units shall be located:

1)

Within the same urban center or urban village as the development required to comply with this Chapter 23.58C; or

2)

Within 1 mile of the development required to comply with this Chapter 23.58C if such development is located outside of an urban center or urban village.

c.

Tenure. MHA-R units on a site other than the same lot as the development required to comply with this Chapter 23.58C shall be ownership units and shall comply with all additional requirements for ownership units according to subsection 23.58C.050.C.7.

d.

Public subsidy. If any public subsidy is used for a development, and the public subsidy operates through subjecting units in the development to restrictions on the income levels of occupants and the rents or sale prices that may be charged, the development shall not be eligible to provide units through the performance option according to subsection 23.58C.050.C.8.

e.

Developer's agreement. If the owner of the development required to comply with this Chapter 23.58C is not the owner of the MHA-R units, then in addition to the agreement required according to subsection 23.58C.050.E, the owner of the development required to comply with this Chapter 23.58C and the owner of the MHA-R units shall execute a developer's agreement, acceptable to the Director of Housing, allowing the exclusive use of the MHA-R units to satisfy the requirements of this Chapter 23.58C in return for necessary and adequate financial support to the development of those MHA-R units.

f.

Letter of credit

1)

If the MHA-R units are located on a site other than the same lot as the development required to comply with this Chapter 23.58C, the owner of the development required to comply with this Chapter 23.58C shall provide to the Director of Housing an irrevocable bank letter of credit, approved by the Director of Housing, in the amount according to subsection 23.58C.040.A.

2)

The Director of Housing may draw on the letter of credit one year after the date of issuance of the certificate of occupancy, or, if a certificate of occupancy is not required, the final building permit inspection, for the development required to comply with this Chapter 23.58C if the certificate of occupancy or final building permit inspection for the MHA-R units has not been issued on or before that date. The owner of the development required comply with this Chapter 23.58C shall also pay an amount equal to the interest on the cash contribution, at the rate equal to the prime rate quoted by Bank of America, or its successor, plus three percent per annum, from the date of issuance of the first building permit that includes the structural frame for the development required to comply with this Chapter 23.58C.

3)

If and when the City becomes entitled to draw on any letter of credit, the Director of Housing may take appropriate steps to do so, and the amounts realized, net of any costs to the City, shall be used in the same manner as cash contributions according to subsection 23.58C.040.B.

D.

Enforcement. The requirements of this Section 23.58C.050 shall be terms of the building permit according to subsection 23.58C.030.A.5. In addition to any other remedies available to the City, the City is authorized to enforce such permit terms using the procedures of Chapter 23.90.

E.

Agreement. If the applicant elects to comply with this Chapter 23.58C through the performance option, the City and the property owner of the development to which this Chapter 23.58C applies shall enter into an agreement specifying the requirements of this Section 23.58C.050. The agreement shall be recorded on the title of the property on which that development is located. The requirements specified in the agreement shall be consistent with the final plans. If the first building permit is issued for the structural frame for the structure that includes affordable housing according to this Chapter 23.58C, and such structure is acquired to provide City-funded low-income housing, the agreement according to this subsection 23.58C.050.E may be released at the sole discretion of the Director of Housing.

(Ord. 126855, § 56, 2023; Ord. 126509, § 85, 2022 [zone name change]; Ord. 125835, § 2, 2019; Ord. 125792, § 11, 2019; Ord. 125791, § 97, 2019; Ord. 125432, § 16, 2017; Ord. 125371, § 20, 2017; Ord. 125360, § 2, 2017; Ord. 125291, § 44, 2017; Ord. 125267, § 34, 2017; Ord. 125108, § 4, 2016.)

An applicant who (1) has an unexpired Master Use Permit for a project issued prior to the effective date of the ordinance introduced as Council Bill 118940, or (2) has submitted an application for a Master Use Permit for a project that is under review by the Department, has completed the Design Review Board Recommendation phase pursuant to subsection 23.41.014.E, and is vested pursuant to Section 23.76.026 prior to the effective date of the ordinance introduced as Council Bill 118940, may elect to incorporate into the project some or all of the capacity added to the applicable zone through the ordinance introduced as Council Bill 118940 without additional review by the Design Review Board if the following conditions are met:

A.

The project is located in a Downtown or SM-SLU zone to which capacity was added through the ordinance introduced as Council Bill 118940; and

B.

The proposed changes to the project are limited to incorporating capacity added to the applicable zone through the ordinance introduced as Council Bill 118940; and

C.

The Director determines, as a Type I decision, that incorporating the additional capacity into the project is done in a manner consistent with the design recommended for approval by the Design Review Board pursuant to subsection 23.41.014.E; and

D.

Incorporating the additional capacity into the project does not require any new development standard departures pursuant to Section 23.41.012; and

E.

The project will comply with the requirements of Chapter 23.58C.

(Ord. 125291, § 45, 2017.)