Port Angeles housing action: Tax incentive aims to encourage multi-family developments

PORT ANGELES — The Port Angeles City Council has voted to target every area within the city limits in a tax incentive program to encourage multi-family housing development.

City Council members voted 6-1 Tuesday — with Cherie Kidd opposed — to designate the entire city as a “residential targeted area” to establish a property tax exemption for developments with four or more units under state law. The action was a first reading.

If approved by ordinance at the Council’s Feb. 5 meeting, the tax incentive program would not change existing zoning or permit high-density housing in low-density residential areas.

The idea is to spur multi-family housing development in appropriate zones to help address the citywide housing shortage.

“The concept is excellent,” Kidd said.

“The concept has certainly worked in other areas. I am just uncomfortable that we’re starting out by basically blanketing the whole city.”

Several council members shared Kidd’s reservations about designating the entire city as the target area.

Council member Lindsey-Schromen-Wawrin urged the designation, saying underlying zoning would address “valid concerns about creating higher density where we have not planned for higher density.”

“I think it creates administrative efficiency,” Schromen-Wawrin said of the city-wide designation.

“I think it helps to create this financial incentive throughout the entire city. And we have those other mechanisms in place for addressing the concerns about infrastructure capacity.”

Chapter 84.14 of the Revised Code of Washington — or state law — authorizes a special property tax to encourage housing development in cities that lack sufficient housing or affordable housing.

The rental vacancy rate in Clallam County was just 1.8 percent in 2016 according to the latest U.S. Census American Communities Survey, Schromen-Wawrin has said.

The adoption of a final ordinance next month would result in an 8- or 12-year property tax exemption for qualifying developments, city officials said. The city would administer the program and charge a $1,000 application fee.

Six speakers testified in support of the property tax exemption in a public hearing Tuesday.

“I am well aware of the low vacancy rate in this town,” said Jane Vanderhoof of Port Angeles, adding that vacant lots in her neighborhood are being used as dog parks.

“I’m also in favor of the exemption for multi-family housing because I see that there’s a huge need for it in this community.”

Steve Hopkins of Port Angeles, who holds a master’s degree in urban and regional planning and serves on the city Planning Commission, said the designation of a city-wide target area could lead to unintended consequences.

“It’s possible that it would encourage higher density housing in areas where the utility and transportation network isn’t designed at this point to handle an increase in density,” Hopkins said.

“That could potentially result in increased costs to the city, increased transportation trips by automobile, and that could end up having a negative, unexpected impact for the city.”

Hopkins suggested that the South C Street corridor between Eighth and 16th streets be added to the residential targeted area because of its existing density, infrastructure and access to convenient public transportation.

After public testimony, Council member Jim Moran stressed that the property tax exemption for multi-family dwellings would not change existing zones.

“I think there’s a misconception out there that by passing this ordinance, we’re rezoning the city into high density or whatever,” Moran said.

“This is not a rezone ordinance. This is simply a tax benefit ordinance, and we’re spreading that tax benefit across the city.

“But under no situation, or no circumstance, are we rezoning the city,” Moran added.

”So I think that needs to be more clear.”

Deputy Mayor Kate Dexter said the city-wide designation would make the tax incentive program more user-friendly.

“I think having it be the whole city is a good way to move forward to encourage the kind of development that we want,” Dexter said.

Mayor Sissi Bruch said a more forward-looking zoning map in the city’s Comprehensive Plan would help the council set more defined target areas for the tax incentive program.

The council has directed the Planing Commission to recommend an amended Comprehensive Plan this summer.

“I am really hoping that the Planning Commission can take a serious look at our Comprehensive Plan’s future zoning map and give us what would be a great tool to have supporting this,” Bruch said.

Council member Michael Merideth said the market will help dictate where multi-family housing should be built.

“The Planning Commission — I do agree with Sissi — will hopefully help dictate the rest of that,” Merideth said.

If the multi-family tax exemption is approved by ordinance after a second reading Feb. 5, the city would begin accepting applications for the program March 1.

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Reporter Rob Ollikainen can be reached at 360-452-2345, ext. 56450, or at rollikainen@peninsuladailynews.com.

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