Form revised: August 9, 2010

FISCAL NOTE FOR NON-CAPITAL PROJECTS

Department:	Contact Person/Phone:	CBO Analyst/Phone:
Legislative	Rebecca Herzfeld/684-8148	Not Applicable

Legislation Title:

AN ORDINANCE related to land use and zoning, amending various chapters of Title 23 of the Seattle Municipal Code (SMC); adding new sections to Chapter 23.45 and recodifying other sections in that chapter; repealing Sections 23.34.016, 23.34.022, 23.45.002, 23.45.004, 23.45.006, 23.45.009, 23.45.010, 23.45.011, 23.45.012, 23.45.014, 23.45.015, 23.45.016, 23.45.017, 23.45.018, 23.45.064, 23.45.066, 23.47A.029, 23.48.031, 23.86.020, and all the exhibits in these Sections; adding Section 23.54.040; amending provisions in SMC Title 25 regarding environmental policies, critical areas, and tree protection; establishing new classifications and standards for lowrise multifamily development; revising lowrise zoning designations and locational criteria for multifamily zones; amending the Official Land Use Map to rezone all property currently in a Lowrise or Lowrise Duplex/Triplex zone to one of three new Lowrise zones; providing for the effect of expiration of any prior decision rezoning property from a Lowrise zone; providing for the extension of contract rezone conditions for property previous zoned to a Lowrise zone; eliminating multifamily parking requirements in urban villages with frequent transit service; changing the mechanism for permitting parking off-site; changing methods for measuring structure height in most zones; establishing standards for solid waste storage areas in most zones; and establishing a new streamlined design review process, all in order to allow a greater variety of housing types in Lowrise multifamily zones, to improve development regulations in multifamily and other zones, to encourage design excellence, to implement Comprehensive Plan policies, and to protect and promote the health, safety, and welfare of the general public.

Summary of the Legislation:

The legislation would amend the Multifamily Chapter of the Land Use Code to further the goals and policies of the City's Comprehensive Plan and Neighborhood Plans.  The proposed legislation is Phase 2 of a two-phase effort to amend the Multifamily Chapter of the Land Use Code.  The first phase was completed with the adoption of revisions to the Midrise and Highrise zones in December 2009. 

The legislation substantially revises the regulations for Lowrise zones.   Key amendments would:

· Combine the five existing Lowrise zones (Lowrise Duplex Triplex, Lowrise 1, Lowrise 2, Lowrise 3 and Lowrise 4) into three zones (Lowrise l (LR1), LR2, and LR3).

· Vary development regulations according to five distinct housing types - cottage housing, rowhouses, townhouses, auto-court townhouses, and apartments.

· Increase height limits by 5 feet in some zones, and change the height measurement method to the one used in shoreline areas.

· Apply floor area ratio (FAR) limits in LR zones, and provide a small increase in the FAR limit when a development includes preferred design features. 

· Set density limits based on housing type.  The density for auto-court townhouses is reduced compared to what is currently permitted, and density limits are eliminated for projects that include those preferred design features that also earn higher a FAR limit.

· Establish new design standards for all housing types in LR zones.

· Replace current landscaping requirements with the City's Green Factor landscaping requirement, which allows developers to select from weighted options on a landscaping menu to reach a required total landscaping score.

· Eliminate existing parking requirements for multifamily development that is within an urban village and within one quarter of a mile of frequent transit service. This provision would also apply to housing in commercial zones in urban villages.

A major change proposed in the legislation is the establishment of a streamlined administrative design review (SDR) process. SDR would be required for townhouse developments with three or more units, to help ensure that new townhouse development contributes positively to neighborhoods. In recognition that the projects to which SDR would apply are small, the proposal eliminates some of the procedural steps that add time and cost to the regular design review process, while preserving a public comment opportunity.

Background:

The current multifamily zoning was originally adopted in 1982.  Since then, the zoning has been incrementally amended over the years, adding additional layers of requirements and procedures, some of which have become redundant, unnecessary, or outdated.  These conditions add to the cost of development and work against Comprehensive and Neighborhood Plan goals for affordable housing, design excellence, and sustainable development. 

Please check one of the following:

____ This legislation does not have any financial implications.

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__X__ This legislation has financial implications.

Increased staffing needs at the Department of Planning and Development (DPD)

In the 2009 DPD Director’s report on SDR, DPD estimated that an average of 50 projects per year would be subject to the proposed SDR process.  Even given the current economic situation, DPD staff believes that this is a reasonable assumption, given that there have been 48 applications already in 2010 for townhouse development.

Between three to five planners now working at DPD would be trained to do both the zoning and design review for SDR projects. Currently, small townhouse projects require only a zoning review, which takes approximately three hours.  DPD estimates that the new SDR process would require approximately 25 hours of review per project, or 22 additional hours.  DPD charges $250 per hour for land use review, so land use permit fees for a typical townhouse for which SDR is required would increase from $750 to $5,500, an increase of $4,750. 

In addition to the SDR process, a fiscal impact results any time there is a major change to the Land Use Code.  There is a small cost to prepare and provide training for staff on the new standards, and to provide public information documents such as Client Assistance Memos.  However, the main fiscal impacts are due to the increase in questions that are posed to technical backup staff, and the need for drafting and implementing new procedures. 

Questions may arise during coaching sessions and presubmittal conferences, and during review of project applications, as DPD staff learns how to apply the new provisions.  If a question cannot be answered by a DPD planner or senior technical backup staff, it is addressed by a DPD Senior staff team.  DPD estimates that when the time spent by everyone involved is added up, approximately 413 hours of staff time will be spent in 2011 as project applications are reviewed under the new regulations.  In addition, DPD estimates that 108 additional hours will be necessary in 2011 for drafting and implementing new procedures for SDR.  Therefore an estimated 521 hours, or about 0.5 FTE, is expected to be spent by DPD project review staff, supervisors, and managers who would otherwise be reviewing of applications, making process improvements, and supervising staff.  This time would not be charged to individual projects, and is considered part of the Department’s overhead costs.

Appropriations: Not Applicable

Anticipated Revenue/Reimbursement: Resulting from this Legislation:

Fund Name and Number	Department	Revenue Source	2010 Revenue	2011 Revenue
Planning and Development Fund 15700	DPD	Fees	Not Applicable	$275,000
TOTAL

Revenue/Reimbursement Notes:  The fee revenue assumption for 2011 is based on a forecast of 50 SDR projects, each of which would require 22 additional hours compared to current review times, or a total of $4,750 per project. 

Total Regular Positions Created, Modified, or Abrogated through this Legislation, Including FTE Impact:

Position Notes: No positions will be created as a result of this legislation.

Creating the new SDR process would generate about 1,100 new billable hours of DPD staff time annually at an average of 50 projects per year, or approximately one full time equivalent (FTE), according to DPD estimates.  At the current hourly rate of $250, the revenue generated in an average year would be $275,000, which is adequate to cover the cost of an additional position. Given the current economic climate, DPD expects to absorb this workload with existing staff.  As permit volumes increase, a new staff person would need to be added and trained.

Unlike other departments, DPD has contingent budget authority, granted in 2001 by the Council in Resolution 30357.  When revenues exceed the adopted forecast due to high permit volume, DPD may use the contingent budget authority for additional overtime, contract workers, temporary employees, or permanent personnel as needed, without further Council approval.  The Budget Office must agree to the addition of permanent employees, and must respond to DPD’s request within two weeks.  There are sufficient vacant land use planner positions available in DPD’s current contingent budget to respond to the need for additional SDR staffing. 

Do positions sunset in the future?  Not Applicable.

Spending/Cash Flow:

Spending/Cash Flow Notes:  Not Applicable.

What is the financial cost of not implementing the legislation?

No financial cost would result if the legislation is not implemented.

Does this legislation affect any departments besides the originating department?

No.

What are the possible alternatives to the legislation that could achieve the same or similar objectives?

Regular design review could be required for townhouse projects, rather than establishing a new SDR process. This would generate more fee revenue, and would be more costly for townhouse applicants.  Another option is to not require any design review of smaller townhouse developments, and to rely more heavily on the prescriptive design standards in the Land Use Code.

Aside from the design review issue, alternatives to the proposed regulations that would achieve the same or similar objectives would likely result in similar or greater impacts on the amount of time required to review projects under the new standards.

Is the legislation subject to public hearing requirements?

The legislation is subject to public hearing requirements.  A hearing was held on an earlier draft on May 25, 2010, and a second hearing on the current proposal is scheduled for November 22, 2010.

Other Issues: Not Applicable.

List attachments to the fiscal note below:

None.