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HomeMy WebLinkAboutExhibit F - Housing Element Inventory & Needs Assessment by E.D. Hovee PORT TOWNSEND H OUSI�� NlG E, LE,M1111111111 ENT II Inventory/ & Needs Assessment I 'M 999 �)i�N�9)�1�1���1/��y)y ,� � opt ��1 5ir f iai �;' ���'i� 'N i FIERN / M einilber 31 , 2015 E. D. Hovele & Company, LLC Economic and Development Services AT-A-GLANCE SUMMARY This assessment report addresses projected housing needs over the 2016-36 time frame for the City of Port Townsend's Comprehensive Plan update. Based on population projections for the City, an estimated 1,369 net new housing units are expected to be needed over the next 20 years. As of 2015, Port Townsend has over 5,300 housing units, of which 75%are single-family residences.An estimated 693 units (13% of the total)target low and moderate income households with some form of financial assistance. Since 2000,close to 1,100 units have been added to the city's housing inventory. In recent years,the mix of housing has shifted to a lower proportion of year-round owner-occupied housing, more rentals, and more units used on a seasonal basis by individuals for whom Port Townsend is not a primary residence. Home values are rising again, back to about pre-recession levels. Rentals are reported at near 100%occupancy—with more demand for rate and affordable units than supply. Demographic and economic factors affecting housing demand include slower than previously anticipated population growth, shrinking household size, continued aging of the population, more single-person households, weak employment not yet recovered to pre-recession levels, and high dependence of residents on non-wage sources of income. An estimated 52%of Port Townsend renters and 39%of homeowners are housing cost-burdened,a virtual doubling of the proportion of cost- burdened households since 1990. With a household size-adjusted build-out capacity of 23,000 residents, Port Townsend has nearly double the residentially zoned land needed to accommodate projected population of 12,165 residents as of 2036. However, the allocation of raw land does not appear to be adequate to meet needs for sites with infrastructure and higher density housing. Continuation of recent development patterns with more seasonal and retirement housing runs counter to City policy; alternatively the City might actively seek to reduce seasonal demand, creating more housing options for year-round, working-age and special needs residents. While this housing needs update has been reviewed for GMA and countywide planning policy (CPP) consistency, a clear conclusion is that more active City involvement in housing policy and delivery will be required if current trends are to be reversed. Recommended next steps are focused on housing element refinement and adoption with Port Townsend's 2016 Comprehensive Plan update. Plan adoption may also serve as the springboard to authorize an immediate 1-2 year work plan—focused on public-private engagement, an updated housing buildable lands inventory(BLI), zoning map revisions, and creating an community housing land trust with capacity to fund and meet a full range of affordable housing needs for Port Townsend residents in perpetuity. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page i I:)h 111 °1111 IIIL° AT-A-GLANCE SUMMARY i HOUSING ELEMENT INTRODUCTION 1 Overview of Port Townsend Growth 1 GMA&CPP Compliance 2 Pivotal Housing Questions & Issues To Address 3 Approach to Analysis 3 Housing Element Organization 4 I. INVENTORY,TRENDS& DEMAND 5 Port Townsend Housing Inventory 5 Tenure &Vacancy 11 A Changing Community 21 II. MEETING PROJECTED DEMAND 30 Vacant & Redevelopable Residential Land 30 Adequacy of land 31 III. GOALS, POLICIES&STRATEGIES 34 Current Planning Framework 34 Housing Element Implementation 35 IV. SUMMARY& NEXT STEPS 36 Consistency with GMA Requirements 36 CPP Consistency 37 Assumptions & Uncertainties 38 Next Steps 39 APPENDIX A—DOCUMENTS REVIEWED 41 APPENDIX B—HOUSING RESOURCES 42 Non-Profit/Public Agency Housing Providers 42 Supportive Community Groups 43 APPENDIX C—CITY ROLE 44 APPENDIX D—SUPPLEMENTAL DATA 47 APPENDIX E—STAKEHOLDER INPUT 52 Observations on For Sale & Rental Housing 52 Actions for Improved Housing Availability/Affordability 53 Note: Cover photos are from the City of Port Townsend web site, ESRI and Google maps Port Townsend Housing Element: Inventory&Needs Assessment HOUSING ELEMENT INTRODUCTION The City of Port Townsend is in the process of conducting a "periodic update" to its comprehensive plan and development regulations. With this 2016 plan revision, the City is required to provide an updated inventory and analysis of housing needs over the upcoming 20-year planning period from 2016-36. Over the two decades since adoption of the City's current Comprehensive Plan in 1996, significant changes have occurred both nationally and locally that will affect housing needs for Port Townsend residents over the next 20 years: • Nationally, a housing crisis was experienced through the Great Recession of 2007-2009 leading to increased foreclosures of owner-occupied and, in some cases, renter-occupied housing. • The recession was followed by national monetary policy aimed to stimulate economy recovery including unprecedented low interest rates, but with credit availability more challenging for a greater share of persons seeking residential financing. • Jefferson County has been more severely affected by job loss and has still not recovered to pre- recession levels, raising issues of declining affordability to a larger segment of the community's low and moderate income population. • Even before and extending beyond the recession, PortTownsend's housing market has been affected by increasing retiree and tourism activity, which has pushed housing prices and rental rates above what is affordable for an ever-greater share of the city's population. • Finally, population growth locally has slowed to levels well below what was previously forecast, meaning that the focus of Port Townsend housing strategies is shifting from needs for added residential land to securing a better balance of the existing and prospective housing inventory to more effectively serve the full range of local housing needs—especially for affordable housing. Looking forward, planning for adequate housing requires an updated understanding of both economic and housing market conditions together with changing demographic trends and household characteristics.With this plan update, greater attention is given to the need for a more diverse housing stock—extending beyond traditional single-family homes to encourage more cottage housing, accessory dwelling units, duplexes, triplexes, townhomes, apartment buildings, and group accommodations for special needs populations and to consider new housing types (as with tiny homes and micro-units). OVERVIEW III II II r II IIS II Ilf) Giiwwriii°°I A major driver of local jurisdiction comprehensive planning lies with the rate of population growth expected. Perhaps the largest surprise of the last two decades was the degree to which Port Townsend's population growth slowed to well below forecast levels. The 1996 Comprehensive Plan originally envisioned population that would be increasing at 2.5% per year, amended in 2005 down to 1.97% per year. Actual growth experienced has averaged only 0.66% annually from 1996-2015. City and County planning staff have prepared an updated and reduced growth forecast, adopted in 2015.The current anticipated population for the year 2036(12,165) is lower than was forecast in the current Plan for 2024(13,329). Accordingly, this updated inventory and analysis reflects lower aggregate Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 1 housing demand than the current plan. Due to lower overall housing demand, a simplified inventory format appears justified, with less emphasis on potential needs for urban growth area (UGA) expansion. However,the City has identified new priorities for a more balanced housing inventory to be addressed with this update. Redistributing previously designated, but as yet unbuilt, residential land will be important to better achieve needs for greater housing density and affordability at locations more readily served with infrastructure and fewer environmental constraints. ClI� ISP I 11AINCIE This housing element is prepared in compliance with applicable statutory Growth Management Act requirements and current Countywide Planning Policy. GMA Requirements. Adopted as the Growth Management Act (GMA) by the 1990 Legislature with RCW 36.70A, the statewide planning goal for housing is to: Encourage the availability of affordable housing to all economic segments of the population of this state, promote a variety of residential densities and housing types, and encourage preservation of existing housing stock. The housing goal described in the Growth Management Act asserts three separate but equal subparts: 1) encouraging the availability of affordable housing to all segments of the population of the state, 2) promoting a variety of residential densities and housing types, and 3) encouraging the preservation of existing neighborhoods. While GMA requires local comprehensive plans to include a housing element, a detailed format for documentation is not specified.What is required is that the community's housing element contains, at a minimum, the following features: • An inventory and analysis of existing and projected housing needs that identifies the number of housing units necessary to manage projected growth • A statement of goals, policies, objectives, and mandatory provisions for the preservation, improvement, and development of housing, including single-family residences • Identification of sufficient land for housing, including, but not limited to, government-assisted housing, housing for low income families, manufactured housing, multi-family housing, and group homes and foster care facilities • Adequate provisions for existing and projected housing needs of all economic segments of the community Countywide Planning Policy. A Countywide Planning Policy(CPP)was adopted in 1992 by the City of Port Townsend and Jefferson County to provide overall direction for the development of GMA comprehensive plans. Policy#6 addresses the provision of affordable housing including: • Definition of affordable housing(subsequently amended as noted below) • Priority for provision of affordable housing through private sector,together with non-profit and quasi-public, entities • Assessment of land available to assure adequacy, including for special purpose housing Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 2 • Zoning of land to accommodate a "wide range of housing types, densities and mixtures" • Preparation of an affordable housing strategy as part of comprehensive plan housing elements • Fair share accommodation of housing affordable to low and moderate households in each UGA • Consideration of designating undeveloped land owned by public entities for low income housing • Location of higher density residential areas near public and commercial services, arterials or within walking distance of transit The only CPP change made to date has been a 1994 revision to the definition of affordable housing to comply with the Washington Housing Policy Act of 1993, which states that "residential housing that is rented or owned by a person or household whose monthly housing costs, including utilities other than telephone, do not exceed thirty percent (30%) of the household's monthly income."'This is the definition of affordability applied for consideration with the 2016 plan update. 1'IIVOIAI,,, 1 �10011HING QUESTIONS & ISSUEs To Air.xic)IIRESS In addition to addressing compliance with GMA and the CPPB,this assessment addresses the following locally identified market and policy related questions regarding: • Anticipated single-family demand amid high prices relative to resident incomes • Effects of second homes and vacation rentals on housing availability and affordability • Capacity of new product types, as with ADUs, to meet a larger share of affordable housing needs • Need for expanded affordable housing options—for low income, senior and homeless residents • Recommendation of potential revisions to the Comprehensive Plan for affordable housing IIS II IIS III°°I 'ro AINA11,,,YS11SI The approach taken is to build on and update existing housing related analyses conducted in Port Townsend and Jefferson County—including a review of documents as noted with Appendix A.Additional information has been obtained via interview contacts with key public, non-profit and private partners.2 Statistical data and other information for this housing assessment has been compiled from readily available sources—including published public agency sources of the U.S. Census Bureau, departments of the State of Washington, city and non-profit organizations active with Port Townsend area housing, and proprietary national sources such as Nielsen (formerly Claritas).3 Specific notes as to data sources and 1 This changed the planning policy's previous figure of 36%of a household's monthly income.The change in definition was enacted jointly by County Resolution No. 112-94 and City Resolution No.94-128. z Information for this housing element inventory and needs assessment has been compiled from sources generally deemed to be reliable. However,accuracy of information obtained from third party sources is not guaranteed and information is subject to revision without notice. Findings and recommendations are those of the authors and should not be construed as representing the opinion of any other party prior to their express approval,whether in whole or in part. 3 Where there is a choice of data source,the most current and/or comprehensive sources are generally preferred. For example, Nielsen provides demographic estimates as of 2015 while the U.S.Census Bureau's American Community Survey's estimates currently represent an average spanning from 2009-13. For data items covered by Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 3 methodologies are provided with applicable tables and accompanying narrative sections to this report. Historic and/or geographic comparisons are included to provide context—in terms of trends over time and comparisons of local with county-and state-wide housing characteristics. 1I 10US11HING Ell,,,111 Ill„ II TII ,,,, II III II III II The remainder of this report is organized to cover the following topics: Inventory,Trends & Demand Meeting Projected Demand Goals, Objectives & Policies Summary& Next Steps Appendix A to this inventory and needs assessment provides a list of references reviewed.Appendix B outlines housing resources. Appendix C details the City of Port Townsend's role in affordable housing. Appendix D contains supplemental data tables. Appendix E summarizes stakeholder input from interviews. both sources, Nielsen is used. In situations where Nielsen data coverage is not available (as with detailed affordability data),ACS data is reported. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 4 L, INVENTORY., TRENDS & DEMAND This report begins with a review of Port Townsend's housing inventory, trends and demand.Topics covered with this inventory also include trends related to housing tenure and vacancy, and emerging trends associated with Port Townsend as a changing community. Specifically considered with this inventory are housing types and sizes, residential building permit trends, planned residential densities, and special needs housing. Housing Types & Sizes As of 2015, there are approximately 5,300 housing units in the city of Port Townsend. Single-family homes constitute the majority(75%) of the units, an incrementally lower proportionate share of the citywide housing inventory than indicated with 1990 U.S. Census data utilized in the in the 1996 Housing Element:Draft Plan& EIS. Multi-family housing complexes of 2 or more units have increased since the 1990 inventory, up from 17%to 21%of the overall citywide housing stock.The relative proportions of single-family and multi- family housing units have changed from 1990, principally due to the construction of a number of multi- family dwelling units following adoption of the 1996 Comprehensive Plan and zoning. Multi-family housing units have increased substantially (+552 units, or by over 100%) over the period of 1990 to 2015. Single-family units have increased during the same period as well (+1,493 units), an increase of close to 60%. The more rapid percentage increase in multi-family units suggests that up- zoning and more flexible development standards helped to address the chronic shortage of modestly priced housing identified by the City in the mid-1990s. However,this updated 2015 assessment indicates that the multi-family residential is still lagging behind changing patterns of housing demand. Number of Dwelling Units for Each Housing Type (2015) WashingtonPort Townsend Jefferson County . . Single-family 4,006 1 75.2% 13,583 73.7% 2,028,402 66.7% Duplex 203 3.8% 331 1.8% 79,428 2.6% 3-plex/4-plex 161 3.0% 322 1.7% 113,262 3.7% Multi-family(5+units) 737 13.8% 1,126 6.1% 598,423 19.7% Mobile Homes 164 3.1% 2,607 14.1% 214,012 7.0% Other(boat,RV,van,etc.) 1 55 1.0% 1 473 1 2.6% 1 6,093 1 0.2% Total(all units) 5,326 1 100.0% 1 18,442 100.0% 3,039,620 100.0% Source:The Nielsen Company. With this assessment, it is also useful to compare the city of Port Townsend's housing inventory with the mix of housing county and statewide. Both Jefferson County and Port Townsend (as the only incorporated city in the county) have a similar, approximately three-quarters share of all housing units that are comprised of single-family residences. Of the remaining quarter, Port Townsend has a higher proportion of plex and multi-family units, while the county has a larger proportion of mobile (including manufactured) homes. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 5 In comparison to the entire state of Washington, Port Townsend has a higher proportion of single-family homes and duplexes. In contrast, Port Townsend's share of larger plex and multi-family housing is below the overall statewide percentage, though higher than countywide. Comparison with statewide numbers is useful as one indicator of a continued multi-family housing shortfall. Based on more detailed information from the 2009-13/5-Year American Community Survey, the median number of rooms per unit is 4.9 in Port Townsend and 5.5 statewide. Over 26%of housing in Port Townsend comprises relatively small units of 1 bedroom or less, as compared with 15%statewide. Only 0.4%of housing units citywide average more than one occupant per room and no units reported more than 1.5 occupants per room.This compares with 2.1%of housing units statewide with more than one occupant per room and 0.8% units with more than 1.5 occupants per room. Despite substantial housing demand, there appears to be little evidence of housing overcrowding in available units to date. Recent Development In the seven years from 2008 through 2014, building permit data for Port Townsend indicates that over 240 units were approved for construction.The overwhelming majority of new development(more than 200 units or 83%of all new housing)was comprised of single-family units.The remaining 17%of added housing stock consisted of 23 accessory dwelling units (ADUs),three duplex and 16 apartment units. Total valuation of permitted new units over this time period adds up to over$35 million. For the period 2008-2014, an average of 29 single-family units has been permitted per year with an average annual value of$4.6 million, equating to just under$162,000 per unit. Over this seven-year time period, the most permits were issued for single-family units in the years 2009, with delayed effects of the recession clearly evident by 2010-11. Permit data for 2014 indicates that the market appears to have recovered to pre-recession levels, at least in terms of unit construction and valuation—albeit with no readily apparent recovery to date for multi-family housing development.4 Port Townsend Building Permits Issued (2008-2014) Accessory Single-family - - Total valuationx Multi-familyYear Units valuation 2008 32 $5,403,043 6 $342,927 1 $266,266 $6,012,236 2009 34 $5,353,126 4 $149,739 12 2 $411,814 $5,914,679 2010 28 $3,609,993 1 $62,500 $3,672,493 2011 20 $2,797,300 2 $87,450 1 $244,400 4 1 $187,650 $3,316,800 2012 1 24 $4,539,427 4 $148,430 $4,687,857 2013 29 $4,670,230 3 $200,000 1 $274,000 $5,144,230 2014 34 $6,174,720 3 $103,080 $6,277,800 Totals 201 $32,547,839 23 $1,094,126 3 $784,666 16 3 $599,464 $35,026,095 Avg/Yr 29 1 $4,649,6911 3 1 $156,304 <1 $112,095 2 <1 1 $85,6381 $5,003,728 Note:As indicated by City records, duplexes are recorded based on structures,equating to six residential units. Source: City of Port Townsend. Earlier year data is not readily available in the reporting format used for 2008-14. 4 Permit values are typically below market values of housing. Permit values cover hard costs of construction and typically do not include cost of land or soft costs such as design costs,development fees, and construction interest. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 6 ADU construction also has been permitted consistently throughout the 2008-14 time frame, totaling 23 units valued at$1.1 million over seven years.ADU permits have averaged over 3 per year with typical permit valuation at close to$48,000 per ADU. In 2008, 6 ADUs were permitted—reflecting a level of activity not yet again reached since the recession. Building permit issuance for duplex/multi-family units has occurred more sporadically over the 2008-14 time period, averaging less than 1 duplex unit and just over 2 multi-family units per year. Permit valuation averages nearly$262,000 per duplex(i.e., $131,000/housing unit)for construction versus just under$37,000 per apartment unit. Widely differing per unit costs provides a clear indication of the variability and importance of multiple price points in the Port Townsend market. Multi-family development represents the most cost effective means of housing delivery in terms of unit affordability.Additional multi-family construction will be of particular importance in the years ahead, to better address needs for affordable and special needs housing. Over this seven-year time period, the most active year was in 2009—with 2 buildings totaling 12 multi- family units for over$400,000. In 2010, 2012, and 2014, no permits were issued for duplex or multi- family units. At an average of 35 new housing units permitted annually, Port Townsend's constructed housing inventory has increased at a rate averaging about 0.7% per year from 2008-14.This is slightly below the rate of population increase averaging 0.8% annually over the same time period. It appears that residential construction generally kept pace with population growth through the recession and subsequent economic recovery(2008-2014). However, longer term data (provided with the next section of this report) indicates that the rate of housing construction will need to pick up in order to meet projected population growth due to the continued decline of average household size and the increase in seasonal units as a proportion of the total housing inventory. Residential Densities With this inventory process, no detailed information is available regarding the densities of development experienced. However, Port Townsend's current Comprehensive Plan and Zoning Code do include designations for all of the housing types for which development has occurred. Port Townsend's Zoning Code includes four residential zones together with two mixed-use zones and two commercial zones that include provisions for housing. Land area associated with each zone together with information regarding allowed densities is provided by the summary chart on the following page. Taken together, Port Townsend has an estimated 2,435 acres that include land area usable for housing. Of this amount, an estimated 2,082 acres (over 85%) are comprised of single-family districts, with 191 acres (8%) zoned for medium and high density residential, and 162 acres (7%) allowing residential within mixed-use or commercial zoning districts. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 7 Zoning Designaflons Acreage Comments Residential Zoning Districts: R-I Low Density Single-Family 566 Accommodates single-family residences(including 2-4 unit plexes)at densities of up to four units per 40,000 square feet of land area (equating to 4.36 units per acre) R-11 Medium Density Single- 1,516 Accommodates single-family and plex units at up to eight units per Family 40,000 square feet of site area R-111 Medium Density 169 Allows smaller scale multifamily structures(of 5-12 units per Multifamily structure) at between 10-16 units per 40,000 square feet of land area R-IV High Density Multifamily 22 Accommodates larger structures(of 10-24 units per structure) at densities of 15-24 units per 40,000 square feet of land area Mixed Use Zoning Districts: C-I/MU Neighborhood 15 Allows residential units above ground floor commercial uses at a Serving Mixed Use Center density of up to 16 housing units per 40,000 square feet of land area C-II/MU Community Serving 15 Allows upper floor multifamily residential units at a density of up to Mixed Use Center 24 units per 40,000 square feet of land area Commercial Zoning Districts: C-11 General Commercial 106 Allows residences above the ground floor or as part of residential/commercial use development where permitted by the shoreline master program C-111 Historic Commercial 26 Allows residences above the ground floor Source: City of Port Townsend. Special Needs Housing An important component of the city's housing element is to address special needs housing. As defined by the State of Washington Housing Planning Guidebook for GMA compliance: Special needs housing includes group homes, nursing homes, assisted-care facilities, in-house care facilities or other types of social/healthcare facilities. Special needs housing includes those who are not able to live independently in traditional housing. It includes those who may not have an income sufficient to obtain housing without assistance. GMA requires the housing element identify sufficient land for housing, including, but not limited to, government-assisted housing, housing for low income families, manufactured housing, multi- family housing, and group homes and foster care facilities. Categories of special needs housing that have been identified and inventoried for Port Townsend include group quarters, financially assisted housing, and emergency/transitional housing as for homeless individuals and families.These categories are not necessarily mutually exclusive. For example, persons in group quarters may also be in financially assisted and/or emergency/transitional housing. Group Quarters. Group quarters, such as nursing homes, correctional institutions, or living quarters for people who are disabled, homeless, or in recovery from addictions are not included in the count of total households. As of 2015, there are an estimated 4,659 Port Townsend households plus an additional estimated 114 residents (or 1.2%of all residents) living in group quarters. As a share of Port Townsend's population, this represents a 0.3% point decrease from the percentage reported in the 2000 Census. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 8 Financially Assisted Housing. The City of Port Townsend has compiled an inventory of financially assisted housing. As of December 2015, an estimated 693 housing units in Port Townsend target low and moderate income individuals and families with some form of financial assistance—whether made directly to the tenants or in the form of reduced rents as a result of financial incentives to property owners or developers to cut the cost of new unit construction or rehabilitation. Financially Assisted Housing Inventory (2013) Housing . - & Name #of Units Subsidized Units 480 Northwest Passage 18 Pfeiffer House 6 South Seven 15 Northwest Village 29 Kearney St.Apts. 18 Hancock St.Apts. 24 Discovery View Apts. 47 Claridge Court 44 Bishop Park 30 Garden Court Apts. 40 Laurel Heights 45 San Juan Commons 50 Seaport Landing 24 Victoria House 8 Hendricks St. House 4 Marine Plaza Apts. 40 Admiralty Apts. 38 Rental Assistance 137 Section 8- Individual Vouchers 137 Other 76 Habitat for Humanity of East Jefferson County 31 Hamilton Heights 37 Eddy St. 4 19th St. 4 Total 693 Note:City inventory is as of 2013,with some revisions per contacts with housing organizations. Source: City of Port Townsend,OlyCAP,and Habitat for Humanity of East Jefferson County. In Port Townsend, financially assisted housing includes: • 480 units for which construction was financed through programs including project-based Section 8, federal low-income housing tax credits, the U.S. Department of Agriculture (USDA), and Washington State Housing Finance Commission bonding. • 137 Section 8 vouchers provided by the Peninsula Housing Authority to Port Townsend residents, a federal housing program assisting low income renters with a rental subsidy. Housing Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 9 providers report that Section 8 recipients have difficulty accessing affordable rental properties in Jefferson County/Port Townsend as the Section 8 rental limits fail to keep up with the market. • 76 other units including projects financed by non-profit organizations such as Habitat for Humanity of East Jefferson County. Taken together, the 693 financially assisted units inventoried comprise over 13%of all housing in Port Townsend and represent a mix of single-family and multi-family housing. Compared with the entire state,it appears that the proportion of housing that is financially assisted may be above average even as the proportion of units available and affordable to low income residents is below average.' This seeming paradox likely reflects the high proportion of Port Townsend's population with incomes at or below 50%of area median income (AMI) as compared with the rest of Washington State. Also noted will be the need to maintain affordability of the existing inventory—as financing and other program stipulations that required affordability(depending on the source of funding) reach expiration. Emergency and Transitional Housing Inventory. Emergency and transitional housing facilities in Port Townsend provide temporary shelter to specific populations, including families with children, single adults, and victims of domestic violence/sexual assault.The metrics used to characterize this inventory varies by the type of housing provided—as for families or single individuals in a combination of separate units and facilities with group quarters. Emergency &Transitional Housing Inventory (2015) Housing Name Provides For Northwest Passage 18families& individuals Haines St.Cottages 8families Crossroads 11 beds Pat's Promise 30women Dove House 20women Source: City of Port Townsend,OlyCAP,and Ending Homelessness In Jefferson County WA:A Ten Year Plan by OlyCAP and Jefferson Shelter to Housing Partnership,2015. An important function of emergency and transitional housing is to assist in addressing homelessness locally and regionally. A point in time count is conducted in January of each year in counties nationwide to document trends in homelessness. Counts for Jefferson County have been compiled in the report Ending Homelessness In Jefferson County WA:A Ten Year Plan by OlyCAP and Jefferson Shelter to Housing Partnership. For the years 2012-14, an average of 111 individuals were counted each year, 5 The Washington State Department of Commerce published a 2015 Housing Needs Assessment. Findings indicate that statewide about 5%of all housing is subsidized,which would appear to be below the Port Townsend ratio. Another method for comparing different geographic areas in the state is presented as a quantification of affordable and available housing units for every 100 households.Statewide,51 units are affordable and available for every 100 households earning 50%or less of AMI. In comparison,there are only 32 units for every 100 households at 50%or less of AMI in Jefferson,Clallam and Kitsap Counties,33 units in Mason County,and 38 units in Grays Harbor County. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 10 including 87 adults and 24 children countywide.The report notes that recent trends indicate a decline in the overall number of homeless, but an increase in homeless children and families in recent years. TIENUIRE & VACANCY Port Townsend had 4,250 housing units identified as of the 2000 U.S. Census. By 2015, the housing inventory has increased by nearly 1,100 units to over 5,300 units—a gain of 25%. Over this same 15-year time period, Port Townsend's permanent population increased by only 13%. There appear to be two reasons for the inventory of housing to be increasing more rapidly than population over this longer 15-year economic cycle: • Reduced household size, largely related to an aging population and fewer family households. This means that more housing is required to accommodate the same population as previously. • Increase in the proportion of housing used on a seasonal basis by individuals for whom Port Townsend in not their primary residence. Overall Trends in Tenure & Vacancy The term "tenure" refers to whether and how housing is occupied. Summary categories utilized for this needs assessment are occupied units (owner or renter), and vacant units (non-seasonal or seasonal).6 6 According to the U.S.Census Bureau,vacant housing units defined as unoccupied or a secondary residence can be disaggregated to the following more detailed categories:for rent;for sale; sold,not occupied;for seasonal, recreational,or occasional use;for migratory workers; and other vacant,to cover vacant units that do not fit in the prior categories,such as units held for personal reasons by the owner. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 11 Port Townsend Housing Inventory &Tenure (2000-15) Change 000 2010 2015 2000-2015 Total Housing Units 4,250 5,193 5,326 +1,076 Occupied Housing Units 3,917 4,544 4,659 +742 (primary residence) Owner-Occupied Units 2,554 2,811 2,900 +346 65.2%of occupied 61.9%of occupied 62.2%of occupied 13.5%increase Renter-Occupied Units 1,363 1,733 1,759 +396 34.8%of occupied 38.1%of occupied 37.8%of occupied 29.1%increase Vacant Housing Units 333 649 667 +334 (not primary residence) Non-Seasonal 205 440 323 +118 4.8%of total 8.5%of total 6.1%of total 57.7%increase Seasonal 128 209 344 +216 3.0%of total 4.0%of total 6.5%of total 168.5%increase *Note:To calculate 2015 Seasonal Vacant Units,the proportion of vacant units for seasonal, recreational, or occasional use from the 2009-13 5-Year American Community Survey(ACS)was applied to total vacant units in 2015.Of added note is the greater proportion of vacant units for seasonal, recreational,or occasional use in ACS versus 2010 Census data. Source: 2000 Census,2010 Census,2015 The Nielsen Company,2009-13 5-Year American Community Survey. Tracking the trends in seasonal housing in Port Townsend is of particular interest.Therefore, vacant units have been separated into non-seasonal and seasonal units. As noted above,the U.S. Census Bureau compiles data on seven subsets of vacant housing units. Seasonal units are defined as one subset, for seasonal, recreational, or occasional use. Non-seasonal units are the combination of the remaining subsets. Of particular note is the share of the change that each tenure category has represented since 2000. Owner-occupied units have accounted for 32%of the unit increase;the remainder of the net change in housing units is comprised 37% by renter housing, 11% by vacant non-seasonal, and 20% by vacant seasonal housing. Based on the chart above and as further illustrated by the following pie charts, several added observations may be made with respect to the changing tenure (or occupancy) of housing in Port Townsend over the last 15 years: • Owner-occupied units have increased, but at a rate slower than with other forms of housing tenure—reducing owner occupancy from 60%to 54%of all housing units (or from 65%to 62% of occupied units)from 2000-15. • Renter-occupied housing has increased at more than double the pace of owner occupancy,with rentals changing from 32%to 33%of all units (or from 35%to nearly 38%of occupied housing) over the last 15 years. • Non-seasonal vacant units have increased at rates above owner-and rental-occupied housing, partly due to recessionary effects (indicated by 2010 vacancy rates) not yet back to 2000 levels. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 12 • Seasonal vacant units have increased by more than 2.5 times from 2000-15,with this portion of the inventory(i.e., vacation homes) rising from 3%to nearly 7%of the city's housing inventory. Changing Tenure of Housing Units in Port Townsend (2000-15) 2000 Tenure 2015 Tenure '7D j� �j �iiii�lll��lllllllllllllllllllllllllll��l������uuuouum��������� .. /,�;_� iii 'iiiiii 'uuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuu uuu'uuuuuu !� uuuuu�Ownreir-O�c cu pied �/ uuuuui IRenter-Occupied �� ..iiiiuuuuuuuuuuuuuuuuuuuuuuuuuumiiiiiiiiiuuuuuuuuuuuuuuuuuuuuuuuuuumiiiiiiiiiuuuuuuuuuuuuuuuuuuuuuuuuuumiiiiiiiiiuuuuuuuuuuuuuuuuuumiiiiiiiii uuuiu ec����onal ,,,,,,,,, Source:2000 Census,2015 The Nielsen Company,2009-13 5-Year American Community Survey. With this overview in mind, it is also useful to take a closer look at trends in owner-and renter-occupied housing, together with a discussion of tourist-oriented seasonal and special needs housing.This is followed by presentation of potential forecast alternatives to meet anticipated housing needs to 2036. Owner-Occupied Housing An estimated 2,900 owner-occupied housing units are in Port Townsend as of 2015, an increase of 13.5%from 2000. As noted, the owner-occupied share of citywide occupied housing units is 62.2%, a reduced proportionate share than in 2000 at 65.2%. According to data spanning a decade through October 2015, median home values in Port Townsend historically have been and remain higher than then the rest of the state. Maintenance of high housing values has occurred even as wage levels locally slip further behind the rest of Washington State. It is noted that the gap between city and statewide values has narrowed over the past year.The October 2015 median home value in Port Townsend is $290,800, only$1,000 more than the Washington state median value.This suggests that, despite some recovery in local housing prices,the ability to support housing values predicated on non-local incomes likely will be more challenging, unless locally generated income opportunities improve in the years ahead. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 13 Port Townsend & Washington State Median Home Values (Nov 2005-Oct 2015) $350,000 $300.000 U50,000 .... .... .... `mem�, ���... ., riUuur�„ ��U�nuaritmm���, 200,000 150,000 100,000 $50,000 W W 01 01 0 0 � � cw cw c a c a •ar •ar u�ro cw cw cw cw cw cw cw cw cw cw cw cw cw cw cw cw cw cw cw cw a a a a a a a a a a z z z z z z z z z z —1-1 Point Townsend —'Was hiin gton *Note:The Zillow Home Value Index is the median Zestimate valuation for a given geographic area on a given day. Source:Zillow.com. Over the nearly ten-year time period depicted by the foregoing chart, Port Townsend home values peaked in October 2006 at$329,800, indicating the city's housing market has not yet fully recovered from recession price drops. Overall,values over the last decade have declined by about 3%. Perhaps a metric of even greater importance is the trend in the relationship between household incomes and median home values. As shown by the graph on the following page, Port Townsend household incomes have lagged well behind those of all Washington residents relative to housing values.This affordability gap has worsened since 2000. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 14 Median Household Income as a Percentage of Median Home Value lf) 25.076 15.076 2000, 2010 2015 Source:2OOOCensus,2O15The Nielsen Company,2OO6'1O5-YearAmerican Community Survey. As shown, median household incomes have dropped substantially relative to median home values from 2000 to 2015 for both Port Townsend and Washington state. The decline is steeper in Port Townsend, a change of nearly 10% between 2000 and 2015 versus 5%statewide.Another difference between the trends for the city and state is that the statewide incomes have regained some of their lost ground to home valuation since 2010—while Port Townsend incomes have continued to slip relative to home values . When the median home values in Port Townsend are evaluated in the context ofaffordability, housing of this value is affordable to households earning more than 120%of Area Median Income (AMI). Since 1990, housing has continued to be affordable to households at 120%or more of AMI, with the median value of homes increasing from just over$110,000 in 1990 to over$291,000 in 2015. Port Townsend Housing Value Affordability (1990-2015) Percent Change in Median Year Median Value Affordable Income Level Value (1990-2015) 11990 $110,08E-7-71 >120%AMI 7— Source:Zillow.com, U.S. Department of Housing and Urban Development,Housing Element:Draft Plan& EIS, 1996. The lack of affordable housing to purchase by households with incomes below 120%AMI was previously documented in the 1996 Housing Element and remains a challenge.Asection later in this report titled housing costs relative to income offers additional detail. Renter-Occupied Housing From 2000'15, renter-occupied housing units experienced growth of 29.1%, more than double the percentage change growth of owner-occupied units over the same time period.The nearly 1,800 renter- Portrownsend*ovsingBement Inventory&Needs Assessment + Page 15 occupied units in 2015 account for 37.8%of the occupied housing units citywide, a higher percentage share than in 2000 at 34.8%. Recent rental and vacancy rate trend data have been compiled from ACS.The median contract rents in Port Townsend increased 4.8%from 2010-2013, with the highest median rent calculated in 2011 of$727 per month, then dropping in the following two years. Somewhat surprisingly, reported vacancy rates for rental units also increased, from a low in 2011 and 2012 of 1.4%to a high of 2.6% in 2013. Port Townsend Rental & Vacancy Rates (2010-13) 010 2011 2012 2013 Median Contract Rent $686 $727 $714 $719 Rental Vacancy Rate 1.7% 1.4% 1.4% 2.6% *Note: Median contract rent is on a monthly basis and omits payments for utilities. Source:5-Year American Community Surveys(ACS). While the highest reported vacancy rate since 2010 is 2.6% (as indicated for 2013),this still translates to a rental market with little vacancy and probability for further increasing rents.A vacancy rate of 5% is generally assumed to indicate a healthy rental market,with a balance in supply and demand. Vacancy of less than 5% indicates that demand exceeds supply. Based on discussions with area property management and real estate firms, vacancy rates as of year- end 2015 have again dropped. Securing rentals is has become a more pressing challenge in a market where there is more reported demand for both market rate and affordable units than available supply. Property managers report that reduced vacancy is occurring not only in Port Townsend and Jefferson County, but also in neighboring Clallam and Kitsap Counties. Reported rates currently appear to be well below the 2.6%overall rental vacancy rate indicated for 2013 with the most recent ACS data. Accessory Dwelling Units In June 2012,the City of Port Townsend surveyed 153 property owners for which there were records of an Accessory Dwelling Unit(ADU) on their property. Note: Permit data indicates that about 10 additional ADUs have been added from 2012-14,for a 2014 inventory of approximately 163 ADUs. The 106 respondents to the 2012 survey offered an insightful look at the ways in which Port Townsend ADUs are currently used: • Of respondents, 35% representing 37 units indicated that ADUs were rented for less than $800 per month (which would be between 60-80%of Area Median Income (AMI) for a 1-person household) • 7%were rented for more than $800 per month—for a cumulative total of 42%of units rented • Another 42%of units were indicated as not being rented • An additional 5% indicated that the ADU is either used for a different purpose, such as shop, office, duplex, or converted into a portion of the house • 9%of ADUs permitted were not built and 2% involved return of a survey postcard as an invalid address Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 16 Based on the results of the survey, it appears that when used for residential purposes, ADUs can serve as a potentially significant market-based resource for affordable housing (without public financial incentives required). However, less than half of the ADU inventory is actually being used for rental housing, meaning that the potential opportunity for ADUs to serve as an even more significant housing resource has yet to be fully realized. Tourist-Oriented / Seasonal Housing Transient accommodations permitted through the City of Port Townsend total 50 properties. While considered to be commercial uses, the City's inventory provides for categorization based on commercial or residential zoning and by availability of some units through public agencies (as at Fort Worden). Permitted Transient Accommodation Properties (Nov 2015) Type of Accommodation Total Comments Commercial Zoning/Structures 13 Residential Zoning/Structures 37 3 Includes Fort Worden,Jefferson County Public Ownership Fair Ground and Point Hudson Marina & RV Park Total Properties 50/53 There are 53 identified properties including those involving public ownership. Note:The inventory is for properties without comprehensive indication of number of units represented. Source: City of Port Townsend. Tourist Homes and Bed and Breakfasts (B&Bs) in residential zones often involve relatively few rooms made available for transient lodging (tourist homes are limited to up to two rooms),while similar lodging in commercial zones is more likely to involve multiple overnight rooms. A question is whether, or to what degree, permitting of Tourist Homes and B&B uses may come at the expense of residential opportunity.This might be considered as a more substantial question for Tourist Homes and B&Bs in residential zones, as lodging in commercial zones would be competing with other commercial, as well as residential, uses. Even for Tourist Homes and B&Bs in residential zones, the existing impact on residential use would appear to be relatively minimal, as 37 properties (albeit with more rooms) represents 1-2%of housing units in Port Townsend assuming up to two rooms for a "tourist home" in a residential zone. The zoning code defines a "tourist home" as a building which provides the primary residence for the owners and which offers not more than two guestrooms for hire to transient guests for sleeping purposes only. A "bed and breakfast" provides the primary residence for the owner or operator and may provide food to its guests. It is possible that tourist-oriented and seasonal housing could become a more significant question in the future, particularly with the advent of internet based lodging, such as AirBnB and VRBO, that broadens the opportunities for more flexible lodging marketing and payment mechanisms. According to the City of Port Townsend, a snapshot of the AirBnB and VRBO websites indicate that there were approximately 27 illegal tourist homes and vacation rentals (those where the owner is not present) being advertised. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 17 This number may well increase in the future, as owners become more familiar with the internet marketing and booking platforms available. If a move toward greater tourism use occurs in the absence of a well-publicized and managed regulatory framework, the availability of housing to permanent residents could be more impaired than has been the case to date. Special Needs Housing As noted, 693 units or about 13%of all housing in Port Townsend receives some form of public financial assistance to improve affordability and/or meet other special needs.As previously noted, these needs include those of homeless or sheltered populations, as well as other government-assisted housing, housing for low income families, manufactured housing, multi-family housing, and group homes and foster care facilities. As in most communities, the ability to provide special needs housing is largely dependent on often limited public funding resources coupled with public and non-profit organizations with a mission to serve populations whose needs would otherwise go largely unmet. While this housing needs assessment does not provide a detailed review of individual programs, several observations may be made regarding critical gaps in affordable and special needs housing delivery: • Funding, particularly at the federal level from traditional HUD sources such as Section 8, is increasingly limited by federal budget issues and inadequate to meet expanding need over time. • In Washington state, the Housing Finance Commission (HFC) has come to play a pivotal role especially as a conduit for federal low-income housing tax credits and low interest bond programs, which have become a major source of funding for new construction. • Achieving adequate funding is particularly problematic for residents at less than 30%AMI and for special needs as with homeless, shelter and disabled populations—requiring funding not only for housing affordability, but often for operating costs and supportive services as well. • Countywide, the extent to which special needs populations are currently underserved is illustrated by a current 6-month to 1-year waiting list to get into any low income apartments as reported by Olympic Community Action Programs (OlyCAP) and over 150 families that are essentially homeless living in their cars or tents—as the hardest to serve population in Jefferson County. • There are a wide array of public agency and non-profit providers and supportive organizations active in Port Townsend (as detailed by Appendix B). However, they are reliant on volunteer and donated resources, as well as public funding support. Over the 20-year horizon of Port Townsend's updated Comprehensive Plan, continuation of existing programs coupled with dedication of added resources will be required to serve both a larger and older population that is also increasingly housing cost burdened. Lack of suitable employment may push more residents to lower wage jobs or outside the work force altogether. Successfully addressing these issues likely also will be dependent on increased coordination and partnering between public/non-profit partners together with incentives that draw in private sector and donated resources. 20-Year Forecast Housing Need On October 26, 2015 via Resolution No. 38-15,Jefferson County, in coordination with the City of Port Townsend, adopted the County-wide Growth Management Population Projections and allocations. The projection is based upon the medium countywide population forecast by the Washington State Office of Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 18 Financial Management (OFM). As per the resolution,the City's population is expected to grow by 2,711 new residents between 2016-2036 for a total population of 12,165 in 2036. Based on this review of existing conditions and trends coupled with recently updated population projections, it is possible to evaluate housing needs that can be expected over the 20-year time horizon of Port Townsend's updated Comprehensive Plan. Based on a household size of 1.98, the current Comprehensive Plan update process includes a projection that 1,369 residential units are expected to be needed to accommodate Port Townsend's growth through the year 2036(County Resolution 38-15). Assuming that the 1,369 figure serves as an appropriate control total for the net housing increase,there are at least two ways of thinking about how this change might be distributed by type of housing. Illustrated with this needs assessment are the following two alternatives: A) Allocation assuming a continuation of trends realized over the 2000-15 time period. B) Allocation assuming stabilization of year-round housing shares. Potential implications of these two alternative means of distributing anticipated housing development by type are each considered, in turn. A. Allocation Assuming Continuation of Current Trends (2000-75). Based on maintaining the proportionate share of the change in total units from 2000-15, the 1,369 added residential units would be 32%owner-occupied, 37% renter-occupied and 31%vacant housing units (both seasonal and non- seasonal). Alternative A— Projected Housing Units Distributed by Tenure Housing by Tenure 2000 2015 Chg 2000-15 % of Chg Chg 2016-36 Total Units 4,250 5,326 1,076 100.00/0 1,369 Occupied Housing Units 3,917 4,659 742 69.0% 944 Owner-Occupied 2,554 2,900 346 32.2% 440 Renter-Occupied 1,363 1,759 396 36.8% 504 Vacant Housing Units 1 3331 667 3341 31.0%1 425 Non-Seasonal 1 2051 323 1181 11.0%1 150 Seasonal 1 1281 344 2161 20.0%1 275 Source: E. D. Hovee&Company, LLC based on 2000 Census,2015 The Nielsen Company,City of Port Townsend. Advantages of this approach to forecasting housing unit allocation include consistency with observed market trends as for continued growth of owner-occupancy and seasonal units with the large cohort of baby boomers that are at or near retirement age. Disadvantages of this allocation approach are that continuation of this trend runs counter to City policy for a better balance of year-round local work force housing,together with potential continued increases in overall "vacancy"(for seasonal use)despite what otherwise appears to be strong housing demand. B. Allocation Assuming Stabilization of Year-Round. Rather than continuing trends toward an increasing share of vacant housing, including seasonal units for non-permanent residents,this alternative assumes implementation of policy objectives to increase year-round housing occupancy. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 19 Alternative B- Projected Housing Units Distributed by Tenure g by Tenure 2000 2015 2015 Shares Total Units 4,250 5,326 100.0% 100.00/0 1,369 Occupied Housing Units 3,917 4,659 87.5% 90.0% 1,232 Owner-Occupied 2,554 2,900 54.4% 50.0% 685 Renter-Occupied 1,363 1,759 33.0% 40.0% 548 Vacant Housing Units 1 333 667 12.5%1 10.0%1 137 Non-Seasonal 1 205 323 6.1%1 3.5%1 48 Seasonal 1 128 344 6.5%1 6.5%1 89 Source: E. D. Hovee&Company, LLC based on 2000 Census,2015 The Nielsen Company,City of Port Townsend. With this forecast scenario, occupied housing would return back to 90%of all housing constructed over the next 20 years—reflecting a Port Townsend housing mix last experienced in 2000. However, the mix of occupied housing would continue to shift consistent with recent trends—with owner-occupied housing representing 55-56%of year-round occupied units (or 50%of the total new inventory)and rental-occupied housing accounting for 44%of year-round occupied units (or 40%of the total new inventory). Both the owner and renter shares of new construction would be greater than with the Alternative A pattern that extrapolated 2000-15 trends forward into the future. Vacant housing would decline from over 30%of net added units (as experienced from 2000-15) back to a target of about 10%of residential units with new construction looking forward to 2016-36. Non- seasonal vacancy would drop back to a normalized level of 3.5%of the overall housing stock—close to the year 2000 figure of 3.0%. Seasonal units would drop from 20%of net added units as experienced from 2000-15 down to 6.5%of new construction, in effect, maintaining rather than continuing to increase the 2015 balance of seasonal housing as a proportion of Port Townsend total housing inventory over the next 20 years. Comparison of Alternatives A & B Housing Unit Tenure Distribution (2016-36) Alternative A Alternative B 411 �, I W�IIIIIIIIlIi �iVuuuvuVum', II I I IIIIIIIIIyyIIppIII(I IIIIIIIIIIOwner--Oc, cup,iod IIIIIIIII IR�m#�Ir-Occu ,ied 1111 Non-Seasonal IIIIIIIII Seasonal uuuuuuuuuuuuuuuuuuuupuu uuuuuuuuXuuiu1i0uu uuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuu-uuuul lul f ' a � Advantages of the Alternative B approach to housing allocation include stabilization of Port Townsend as a year-round residential as well as tourism-oriented community, together with focus on facilitating the market need for more rental housing. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 20 Disadvantages reflect the challenges of reversing market trends, which will require generation of more family wage jobs locally and enhanced public policy and funding mechanisms to improve the sustained feasibility of work force and affordable housing over the full 20-year forecast horizon. Affordable and Special Needs Housing. Assuming the existing proportionate share of at least 13%of Port Townsend's housing inventory is financially assisted housing, a minimum of 178 added financially assisted units will be required over the 2016-36 period. To the extent that these populations are currently underserved or that the proportions of growth represented by these populations increase, the need for financially assisted units could be expected to increase accordingly. Catching up with existing unmet need—as clearly appears to be the case for low income and elderly populations—suggests priority for documenting the extent of the unmet need and then identifying measures to expedite funding for added resources, especially over the next 3-5 years. 111,,,,1AINGIING COMMUN111T Housing trends and forecast needs are set in the context of a changing Port Townsend community. This inventory and needs report turns to consideration of significant changes in population, household and socio-economic conditions. These past and emerging trends also serve to inform policy choices and implementation measures considered with the Comprehensive Plan currently in place and this plan update. Population Growth Perhaps the most noteworthy change between what was planned as compared with actual experience is with population growth—occurring at rates well below prior expectations.The 1996 Comprehensive Plan originally envisioned population that would be increasing at 2.5% per year, amended in 2005 down to 1.97% per year. Actual growth experienced has averaged only 0.66%annually from 1996-2015—a realized growth rate that proved to be only one-third of what was forecast. As a result, City and County planning staff have cooperatively prepared a reduced growth forecast for the next 20 years, adopted in 2015 (County Resolution 38-15). The current anticipated population for the year 2036 is 12,165 residents, reflecting an anticipated average annual growth rate of 1.12% per year going forward. Port Townsend's portion of the forecasted 2036 countywide population is 2,711 residents, translating to a need for an estimated 1,369 additional residential units (based on 2010 Census average household size of 1.98 persons per household). Household Characteristics Reduced rates of population growth have been accompanied by changing demographics of the population and associated household characteristics. Presented in this section is data regarding household size, age distribution, and household composition including households with children. Household Size. Census data indicates a decline in the average household size in Port Townsend from 2000 to 2010, dropping from just above 2 persons per household to below.The 2015 estimate of 1.95 persons per household continues the trend of shrinking households.Though averaging larger households than in the city, the countywide size is also trending downward, with the 2015 figure at 2.04 persons per household. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 21 Average Household Size (2000-15) 000 2010 2015 Port Townsend 2.09 1.98 1.95 Jefferson County 2.21 1 2.08 2.04 Source:2000 Census,2010 Census,2015 The Nielsen Company. Declining household size means that more housing is required to accommodate the existing population, even before considering effects of population growth. Port Townsend needs to provide 7% more housing to accommodate the 2000 Census population of 8,334 residents today than it did 15 years ago. Age of Population. Smaller households are attributable, in part, to an older population without children and more likely to live alone. Since 2000, the median age of Port Townsend residents has increased from 46.6 to 55.1 years. By comparison,the median age of Washington state residents as of 2015 is 38.1 years.According to statewide population trend data,Jefferson County has the highest percentage of the population age 65 years and over compared to all Washington state counties. Port Townsend Age Distribution (2000-15) 000 2010 2015 0-24 25.1% 21.4% 20.9% 25-44 21.8% 17.4% 17.0% 45-54 20.1% 14.8% 11.8% 55+ 33.0% 46.5% 50.3% Median Age 46.6 53.0 55.1 Source:2000 Census,2010 Census,2015 The Nielsen Company. Since 2000, the proportion of persons aged 55 and over has increased from 33%to over 50%of the population in 2015. All other age groupings now have a reduced share of the population, with the most significant decline observed for the 45-54 age group. In comparison, the percentage of adults aged 55 and over statewide has grown by 8% points during the same time period of 2000-2015 and comprises 27.4%of the total Washington state population as of 2015. An important objective of the 1996 Plan was to slow the trend towards Port Townsend becoming a retirement residential community. The Plan stressed the need to support the provision of"family- wage"jobs to allow young families to both live and work in the community. Despite the Plan's focus on maintaining small town character and achieving a better balance between jobs and housing, the undeniable demographic trend has continued in the direction of a retirement residential community. Household Composition. From 2000 to 2015, Port Townsend added more than 700 households to total nearly 4,700 households in 2015. Over this 15-year period, the composition of households has changed, most notably,with an increase of 34.4% in single-person households and 43.2% in households with an individual over 65. Households with children contracted 9.4%over the same time period. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 22 Port Townsend - Changing Household Characteristics Change 000 2010 2015 2000-2015 Total Households 3,917 4,544 4,659 +742 Households with Children 914 805 828 -86 23.3%of total 17.7%of total 17.8%of total 9.4%decrease Single-person Households 1,423 1,801 1,912 +489 36.3%of total 39.6%of total 41.0%of total 34.4%increase Households with an 1,249 1,672 1,789 +540 Individual over 65 31.9%of total 36.8%of total 38.4%of total 43.2%increase *Note:To calculate 2015 Households with an Individual over 65,the proportion of Households with one or more people 65 years and over from the 2009-13 5-Year American Community Survey(ACS) was applied to total households in 2015. Source: 2000 Census,2010 Census,2015 The Nielsen Company,2009-13 5-Year American Community Survey. Other Factors Affecting Housing. Additional demographic data is provided with supplemental tables in Appendix D. From this review, other factors of importance to housing needs in Port Townsend include the following observations: • At 41%, Port Townsend's proportion of 1-person households is considerably higher than in Jefferson County (34%) or Washington State (28%).The city also has a comparatively low percentage of family households. • Port Townsend has a greater proportion of the adult population with a bachelor's degree or better as compared with adults county and statewide. • 59%of households in the city make less than $50,000 annually versus 55% in the county and 42%throughout the state. The city's percentage of families below poverty level is also comparatively higher than is the case countywide or statewide. • Nearly 11%of Port Townsend households do not have a vehicle, compared to 5%countywide and 7%statewide. Within the city, there are also markedly higher proportions of persons walking or biking to work or working at home. • Both Port Townsend and Jefferson County have an extraordinarily high 27%of workers characterized as self-employed versus 10%statewide. • 46%of the city's population aged 16+ is not in the labor force, below the county's 51% but substantially above the state's proportion of 35%. • 65%of Port Townsend's housing units are valued at$200,000-$500,000, while this segment accounts for 55%of the housing market in the county and 53%across Washington State. • Also of note is that Port Townsend has a high proportion of homes built either before 1940 or from 1990-2009, in comparison to the county and the state. As is most readily apparent in the comparison of incomes to median housing values, there appears to be a clear trend locally toward higher end homes—whether occupied year-round or seasonally.This trend is all the more confounding as other factors suggest greater needs for small households, lower income residents,greater lack of vehicle ownership, and lower rates of labor force participation than elsewhere in Washington State. Correcting this imbalance will depend on increasing opportunities for additional multi-family and affordable housing in the years ahead. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 23 Economic Conditions Additional conditions affecting housing need and demand include sources of income, employment, and wages.Taken together, the combination of demographic and economic data depict a community with two distinct economies—distinguished between those who receive incomes from employment locally and those reliant on non-wage sources of income. Sources of Personal Income. Due in large part personal Income Distribution (2014) to a high proportion of retirees, investment income represents the greatest share of Jefferson County personal income in Jefferson County— 0111 exceeding wage and salary income. An estimated 62%of personal income in Jefferson """"'4�fuge&s-ala'ry County is accounted for by investment income ""'iiisuppleomm�enfs' together with transfer payments—as I'll Propiriefors compared with just over 36%statewide. 11111111111nVest"�e� uuuu Tara nsfer Payments i Wage and salary income represents only 26% of personal income in Jefferson County as compared to 46%statewide.The wage/salary Washington State share of income has also been dropping more rapidly locally in recent yearsthan has been the case for the rest of Washington state.The 111111111 Wage&Salary rapidity of this decline is attributable to uuuuiSupplern e-nt stagnant employment and lower average wage 1111 Proprietors levels for those who are employed in Port uuuiinwes menf Townsend and Jefferson County. uuuuTransfer Payments Employment. As of 2014,Jefferson County had 7,920 covered jobs (covered by unemployment insurance).This represents less than 0.3%of Source: U.S. Bureau of Economic Analysis(BEA). Data is available for counties and not for cities. the statewide employment base of over 3 million, as compared with Jefferson County's 0.4%of population statewide. Despite economic recovery elsewhere nationally and in Washington State,the number of covered jobs in Jefferson County remained at 4% less in 2014 than it was five years earlier in 2009. As depicted by the following graph, countywide employment peaked in 2006, declining in every subsequent year until experiencing a small rebound in 2013 leading to solid growth in 2014. From 2006- 2012,Jefferson County experienced a net loss of over 1,380 jobs—a 15%decline in total employment. Like Jefferson County, the rest of the state was affected by job loss during the recession. However, the duration of employment decline was much shorter. Statewide,job losses were experienced only over two years (from 2008-10), followed by a net gain of over 235,000 jobs in four years since 2010. In effect, Port Townsend and Jefferson County were affected more severely than most of the rest of the state during the recession, but clear signs of economic recovery are now finally apparent. Looking forward,even more robust employment growth will be necessary to support a turn-around for increased homeownership and improved housing affordability. In the absence of stronger job and Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 24 wage growth, resident demand for housing will likely continue to trend toward and increased need for affordable rental housing opportunity, particularly affordable multi-family housing. Jefferson County Year-to-Year Employment Change (2005-14) o 1100 ...... �hrtWNvorNvorNvo ��ro��rWN�orN�orN 1�.............I -0 iO2Z6 07. a9 - 0 0 11 kn N rrr,Nn2 20 112-113 2!0113-114 ('11 00) j (. ) (. ) [400 (500) (600 (700 (800) rrr Source:Washington State Employment Security Department(ESD). Employment change is based on data for jobs covered by unemployment insurance. Wage Trend.The average wage in Jefferson County is well below the state. As of 2014, the average wage in Jefferson County is just above$34,500 per year, only 63%that of the statewide average. Lower wages are attributable in large part to under-representation of traded sector employment—in higher wage jobs as with manufacturing, professional and technical services. Currently,jobs are disproportionately skewed toward lower wage occupations, as in retail and accommodations (including lodging and food service). Housing Affordability Changing demographic and economic conditions coupled with factors affecting housing cost and financing all have served to impact needs for housing affordability. Considered with this assessment is the definition and measure of housing affordability, followed by discussion of housing mix and cost in relationship to affordability and forecast affordability need to 2036. Definition&Measure of Housing Affordability. As noted in with the revised Jefferson County CPP,the definition of affordability is for a household to pay no more than 30%of its income on gross housing costs. Households paying more than 30%of their income for housing are considered "cost-burdened" and may have difficulty affording necessities, such as food, clothing, transportation and medical care. To frame levels of affordability, households are characterized by their income as a percent of the countywide Area Median Income (AMI) set by the U.S. Department of Housing and Urban Development Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 25 (HUD).Jefferson County's 2015 AMI is$65,200 for a 4-person household and is considered in percentage terms as 100%of AMI. The following table depicts applicable income limits per household size and defines: • Very low income households (with incomes at less than 30%AMI) as having annual incomes that range from less than $13,700 for a 1-person household to $40,890 for an 8-person household. • Low income households (with incomes at 30-50%AMI) may have incomes at up to $22,850 for a 1-person household. • Moderate income households (with incomes at 50-80%AMI) may have incomes at up to $36,550 for a 1-person household. Conversion of Percent AMI to Household Income (2015) Percent Area Income Level for Jefferson County Median Income I Person 2 People 3 People 4 People 5 People 6 People 7 People 8 People 30%AMI $13,700 $15,930 $20,090 $24,250 $28,410 $32,570 $36,730 $40,890 50%AMI $22,850 $26,100 $29,350 $32,600 $35,250 $37,850 $40,450 $43,050 80%AMI $36,550 $41,750 $46,950 $52,150 $56,350 $60,500 $64,700 $68,850 100%AMI $45,640 $52,160 $58,680 $65,200 $70,416 $75,632 $80,848 $86,064 120%AMI 1 $54,750 1 $62,600 1 $70,400 1 $78,250 1 $84,500 1 $90,750 1 $97,000 1 $103,300 Source: U.S. Department of Housing and Urban Development. Data is available for states,counties,and large urban areas. Housing Mix&Cost in Relationship to Income. Data on all households in Port Townsend and Jefferson County according to household income is available from ACS as a 5-year average of 2009-13.This data serves as a means of determining the distribution of the existing households in the city and county into corresponding percentages of AMI. As shown by the following table, about 31%of Port Townsend's households make less than 50%AMI, compared to 26%of households at this income level countywide and 24%of households statewide. And 16%of Port Townsend households have incomes less than 30%AMI-a level that typically requires not only housing assistance but operating expense support and/or complementary supportive services. However, area median incomes for Jefferson County have increased 70%from 2000 to 2015, a significantly higher increase than the 38%change exhibited for Washington state median incomes.This increase is due, in large part,to greater reliance on non-wage sources of income. For wage earners and those dependent on public assistance, housing affordability represents a greater challenge than before. Port Townsend, Jefferson County & Washington Households Distributed by Percent AMI Port Townsend Jefferson County Washington (households) (percent) (households) (percent) (households) (percent) Very Low Income(<30%AMI) 712 16% 1,986 14% 389,725 15% Low Income(30%-50%AMI) 678 15% 1,680 12% 241,728 9% Moderate Income(50%-80%AMI) 833 18% 2,405 17% 477,878 18% 80%-1200/o AMI 497 11% 1,452 11% 215,287 8% >120%AMI 1,802 40% 6,278 45% 1,304,508 50% Source: U.S. Department of Housing and Urban Development,2009-13 5-Year American Community Survey. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 26 Housing Cost Relative to Income. A substantial proportion of both homeowners and renters are paying 30%or more of their income on housing and are considered housing cost burdened. An estimated 52%of Port Townsend renters and 39%of homeowners are housing cost burdened, a virtual doubling of the proportion of cost-burdened households since 1990. When comparing housing affordability for renters as a proportion of rental housing units, the renter- occupied housing in Port Townsend is less affordable than owner-occupied housing. After adjusting for renters for which data is not computed, an estimated 52%of Port Townsend renters pay 30%or more of their income for housing versus 39%of homeowners.' Monthly Housing Costs as a Percent of Income by Tenure (2009-13) IncomePercent of Port TownsendJefferson - Owner-occupied Less than 20% 42% 45% 43% 20-29% 19% 22% 25% 30%or More 39% 32% 31% Not Computed 0% 0% 1% Total Owner Units 2,670 10,099 1,661,427 Renter-occupied Less than 20% 14% 12% 22% 20-29% 29% 24% 24% 30%or More 47% 52% 48% Not Computed 11% 12% 6% Total Renter Units 1,852 3,702 967,699 Housing Cost Burdened 52% 59% 51% (30%or More+Not Computed) Rental %of Housing Units 1 41% 1 27% 37% Source: 2009-13 5-Year American Community Survey. Comparatively, citywide rental housing appears somewhat more affordable than are rentals across the county, since 59%of Jefferson County renter-occupied units are housing cost burdened. However, Port Townsend is somewhat less affordable than the rest of the state for renter-occupied housing—with even more of a cost-burden gap indicated for owner-occupied housing. For homeowners and renters combined, an estimated 44%of households are cost-burdened as of 2009- 13 ACS data.This is more than double the 19%share of households that were similarly cost-burdened as of the 2000 U.S. Census. ' Housing costs are not computed for 11%of renter-occupied units in Port Townsend. If these not-computed renters are distributed proportionate to the computed categories(i.e., Less than 20%,20-20%,30%or more),the percentage of renters with monthly housing costs 30%or more of income increases to an estimated 52%.This 52% figure translates to an estimated 965 renter-occupied housing units in Port Townsend that are likely housing cost burdened. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 27 Forecast Affordability Need to 2036. As outlined earlier in this report, part of the Comprehensive Plan update projects an addition of 2,711 residents needing approximately 1,369 residential housing units by the year 2036.Two alternative scenarios have been identified as providing a range of expectations for permanent, year-round renter-occupied housing: • With Alternative A,an estimated 37%(or 504 units) of those added units are anticipated to be renter-occupied. • With Alternative B,the share of net new rental units increases to 40%(or 548 units) of the 1,369 added unit need over the 2016-36 time horizon. Using the 2009-13 ACS 5-year average distribution of renter-occupied housing units by household income, the added renter-occupied units may be distributed according to the current AMI percentage distribution. In effect, an estimated 28%of the renter-occupied units added to the Port Townsend housing inventory will be needed for less than 30%AMI,followed by another 20%for households at 30%-50%AMI. AMI Distribution of Added Port Townsend Renter-Occupied Housing Units (2016-36) Added Renter-Occupied Units Alternative A Alternative (units) (percent) (u nits) (percent) Very Low Income (<30%AMI) 141 28% 153 28% Low Income (30%-50%AMI) 101 20% 109 20% Moderate Income (50%-80%AMI) 70 145/o 76 14% 80%-120%AMI 42 8% 45 8% >120%AMI 151 1 30% 164 1 30% Total Added Units 504 1 100% 548 1 100% Source: E. D. Hovee&Company, LLC utilizing the U.S. Department of Housing and Urban Development,2009-13 5- Year American Community Survey AMI distribution. Based on this analysis,anticipated needs for added rental housing over the 20-year planning horizon include an additional: • 141-153 rental units for very low income households (less than 30%AMI) • 101-109 rental units for low income residents (at 30-50%AMI) • 70-76 rental units for moderate income households (at 50-80%AMI) Note that needs for housing affordable to low and moderate income renters could change from projections depending on shifts in local demographic and economic conditions. Needs for housing to serve residents at 80%or less of AMI could increase above the levels noted if population growth occurs more rapidly than now forecast, rentals as a share of total housing grow above what is indicated with the two forecast scenarios considered, and/or economic conditions continue to stagnate with relatively few family wage job opportunities. The report Ending Homelessness In Jefferson County WA:A Ten Year Plan by OlyCAP and Jefferson Shelter to Housing Partnership endorses a Housing First approach to reducing and eliminating homelessness.This means greater priority given to rapid re-housing of homeless populations versus Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 28 shelters because there is little to no funding for shelters.This priority is reinforced by housing studies that have shown housing homeless people reduces community-shared expenses such as emergency room, law enforcement and corrections services. In summary, both community input and available data indicate that Port Townsend's changing demographic characteristics may impact future housing demand, including added needs for affordable housing. Residents can be expected to have changing expectations, as more individuals live alone or in non-family households.$The increase in the number of singles and older adults in the community suggests a growing need for homes with a variety of price points designed for smaller households, including accessory dwelling units. Demographic changes also likely will continue to increase demand for multi-family housing. Such housing could be provided in single-use buildings (as with townhouses, apartments and condominiums) and prospectively in buildings with horizontal (side-by-side) or vertical (stacked) mixed use development.The opportunity for mixed-use is greatest in central areas offering good transit, pedestrian character and availability for alternate modes such as biking—all of which may allow for easier access to neighborhood amenities and services, with more residents less dependent on private automobiles. 8 The proportion of non-family Port Townsend households, including those living alone, has increased from 44%of all households in 2000 to an estimated 49%in 2015,based on Census and Nielsen data. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 29 11., MEETING PROJECTED DEMAND The 1996 adoption of the Port Townsend Comprehensive Plan reflected a growing sense of the need to resist the trend toward becoming a primarily tourism and retirement community. Rather, the "overriding objective" of the Plan has been to "maintain and enhance Port Townsend's special character and small town atmosphere." A supporting housing strategy has been aimed to increase housing choices and affordability for city residents. As subsequent experience has shown, prioritizing the housing needs of year-round residents has proven to represent a considerable challenge—as is most clearly indicated by the continued dramatically increasing share of seasonal homes. In many communities,the loss of land to non-resident housing and for related hospitality-related uses might suggest the need to expand the city's UGA.As the following discussion indicates,this does not appear to be the case for Port Townsend. On paper, land supply is more than adequate to meet any reasonable scenario of residential need for decades to come. VACANT' & ItEic)EVIEI,,,GIPA11111,,,1E 1lm The jurisdictions in Jefferson County are not required to prepare buildable land reports and no detailed buildable lands analysis is anticipated with the update of Port Townsend's housing element.9 To date, a buildable lands inventory has been determined as not essential for this plan update, due to what has been previously identified as a substantial surplus of residentially zoned property relative to any reasonable projection of 20-year housing need. As background documentation for the 1996 Comprehensive Plan currently in effect, a population holding capacity analysis was conducted to estimate the theoretical capacities associated with future residential development for Port Townsend.10 This analysis addressed the question of how much housing could be accommodated at the (undetermined)time of ultimate build-out of the current Port Townsend UGA. Potentially developable land areas were calculated to account for areas already developed, for land needed for public rights-of-way, and for removal of environmentally sensitive areas from the buildable inventory. Prior to Comprehensive Plan adoption, resulting Port Townsend population capacities were estimated for four plan alternatives: 9 Per RCW 36.70A.070(2)(c),only six western Washington counties(Clark, King, Kitsap, Pierce,Snohomish and Thurston)are required to generate buildable land reports.These six counties contain more than 100 of the incorporated cities in the state. to Source is the Port Townsend Plans, Appendix 6 covering Population Holding Capacity Assumptions& Methodology, prepared by Watterson West Group, December 1994. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 30 Plan Alternatives Considered Prior to Current 1996 Comprehensive Plan Adoption Population Capacity Alternative - nts No Action Alternative 32,835 Existing Plans& Regulations Alternative#1 30,213 Residential Community(Dispersed Growth) Alternative#2 26,004 Community Neighborhoods(Focused Growth)—includes 1,616 population capacity of the unincorporated UGA Alternative#3 35,320 Urban Community(Concentrated Economic Growth)—includes 5,080 population capacity of the unincorporated UGA All of the alternatives evaluated in 1994 reflected existing development accommodating 7,940 residents as of 1994. Build-out figures included existing population plus potential future population growth.With the adopted plan, Alternative#2 was selected with an estimated build-out population capacity for Port Townsend of just over 26,000 residents. As household sizes have trended downward, the assumption being applied now for the 2016-36 time period is 1.98 persons per household by 2036, a figure 11% below the prior projection of 2.232 persons per household. Reduced household size means that a somewhat smaller population would be accommodated at build-out than previously anticipated with the 1994/96 planning process. The Alternative#2 capacity of about 26,000 added residents projected previously would be reduced to a population capacity of about 23,000 with updated household size projections (1.98/2.232 x 26,004 rounded = 23,068) and, conservatively, 21,600 when the unincorporated UGA is deducted. ic) 111,,,, 11,,, l c) As noted, the updated 20-year countywide population projections adopted in October 2015 reflected a total population for the (incorporated) Port Townsend UGA of 12,165 residents as of 2036.This projection equates to a 1.12%annual population growth rate, well below prior projections. Compared with a household size-adjusted build-out capacity of about 23,000 residents, it is clear that this revised population should be readily accommodated within the existing Port Townsend UGA— assuming that land zoned for residential use proves suitable and cost-effective for development. In effect, there should be nearly double the residentially zoned land as will be needed to serve the next 20 years of population growth.This indicates no apparent need for urban growth area (UGA) expansion for the updated 2016-36 planning horizon. While there will continue to be a substantial reserve of land for single-family use, a shift in the housing mix can be expected—towards more small lot, multi-family and special needs housing development.The result is that securing suitable locations for higher density housing in proximity to infrastructure and services is expected to be of greater importance with this plan update than previously. In summary, while a detailed buildable residential land inventory is not required for Port Townsend's 2016 Comprehensive Plan update, additional consideration should be given to more detailed assessment of buildable land requirements versus availability/suitability of lands for small lot and multi- family residential development.This could occur subsequent to plan adoption, particularly if concerns are expressed over site suitability to meet the growing need for affordable housing in Port Townsend. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 31 The 1996 plan also identified the need to designate at least 105 acres of additional undeveloped land for multi-family use and to "encourage the integration of multi-family housing developments in locations which are compatible with existing neighborhoods." While there are no quantitative estimates of current unmet need with this plan update, it is clear from provider input that there continues to be a shortage of smaller lot and multi-family zoned land at locations close to the urban core and served by infrastructure. Consequently, the emphasis should shift from raw land availability to assuring shovel- ready sites at higher density locations likely to be in demand for prospective developers and residents. Owner Housing Meeting the Need: Needs for owner-occupied housing can and should be distinguished Habitat for Humanity between demand for non-resident tourism/seasonal use and needs for year-round local residents: Since 1998, Habitat for Humanity has constructed • As is clear from ongoing experience, non-resident demand 31 single-family homes in can be expected to continue,driven by baby boomers both Port Townsend, for pre-and post-retirement.This retirement-driven market households at 30-60%AMI. can be expected to outbid local residents interested in Buyers need to have a reliable source of income homeownership, due to relatively higher incomes in places to repay an affordable from which retirees are relocating. Based on experience to mortgage (of about$600- date, the efficacy of restraining this market-driven activity is $700 per month), have uncertain. Going forward, greater emphasis is suggested on reasonable credit, and mechanisms to better assure that local residents are less willing to work 250-400 negatively impacted.This might occur by some combination hours of sweat equity. of initiatives to improve local resident employment and Habitat has capacity to wage opportunities combined with limitations on seasonal construct four units per housing and increased production of affordable resident year, but is challenged in housing. finding and qualifying prospective homeowners— • Resident demand for homeownership is apparent,but targeted to people impeded by price appreciation driven by purchasers not working in service dependent on local jobs.This trend will continue unless businesses, making $13-$17 new market or non-market mechanisms are created to level per hour full-time. the playing field, encouraging homeownership from The updated Comp Plan residents working and supporting families locally.As part of could help address a more "virtuous cycle," making ownership more affordable affordability issues for will also encourage local job growth—of special importance similar development to young workers and their families who choose to remain through actions such as: in Port Townsend rather than relocating elsewhere. • Building community There is a third prospective need to be addressed over the 2016-36 stormwater facilities to planning period—a concern that Port Townsend's historic housing reduce infrastructure cost may be threatened by cost of purchase and rehabilitation relative to . Allowing easier methods values supported. This is a topic suggested for added consideration to reduce lot size for and evaluation with potentially affected owners. Solutions could smaller units include conversion to boarding house (currently permitted) or to multi-family/condominiums (not currently permitted). • Zero-lot line construction Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 32 Rental & Affordable Housing From a public policy perspective, needs for rental and affordable housing can be distinguished between: • Demand for middle to upper income rental housing. Typically, the private market should be able to deliver Meeting the Need: housing at 60-80%AMI and above. It is not clear that this is Senior Housing Examples currently happening in Port Townsend, despite record low vacancy rates. While the evidence compiled for this report Quimper Village is a is not definitive as to reasons for this seeming market proposed 28-unit independent, senior living failure,the information available suggests that supply-side co-housing development. solutions may be of most value in getting the private As a Planned Unit development community more engaged. Steps suggested Development (PUD), the by a range of stakeholder interests include zoning re- project would comprise 8 designation for higher density housing at locations that can structures, built townhouse be cost-effectively served with infrastructure, consideration style with 3-4 units per of larger units (above 24 units in a structure for more structure, and several efficient management), and encouragement of public- detached garage, carport private partnerships. and workshop structures. • Demand for lower income and special needs housing.The In 2015, Marine Plaza with financial feasibility of new market rate housing is typically 44 Section 8 housing units more challenging for households below 60%AMI and for seniors, underwent a special needs populations. Some form of public and/or non- significant rehabilitation profit funding is generally required, or these populations project. become relegated to older and often substandard private Other than these two housing inventory. Below about 30%AMI, financial projects, no new senior- operating subsidies and/or continuing support services are only housing developments also often required. While Port Townsend public/non-profit have been constructed in housing providers should continue to seek federal and state the last 10 years. Yet funding resources as available, more attention to greater needs for senior identifying and implementing a sustainable local funding housing can be program is also suggested—as with the HB 2160 Housing anticipated in the years Fund for Jefferson County investment in low income ahead, if Port Townsend's housing and the City of Port Townsend's Housing Trust already older age population continues to Fund. Otherwise,there is ongoing risk that affordable age in line with regional housing delivery will continue to lag well behind demand. and national trends. The 2015 report on Ending Homelessness In Jefferson County WA:A Ten Year Plan, prepared by OlyCAP and Jefferson Shelter to Housing Partnership, prioritizes educating the community on the need to address homelessness in Port Townsend and countywide. As a result of this outreach, the community has become more engaged and is moving forward to determine "what really needs to be on the ground."The vision of OlyCAP is for a minimum of 35 new units built and occupied within the next 3-5 years. Similarly, while added Section 8 housing is constrained by federal funding, there may be other opportunities to partner with the regional Peninsula Housing Authority, especially if suitable multi- family sites could be secured. An early project could involve renovation of the Lincoln Building adjoining Port Townsend High School for 40-45 units of affordable workforce housing (at up to 60%AMI). Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 33 111., GOALS., POLICIES & STRATEGIES This discussion provides a review of the current planning framework, followed by discussion of key actions that have been implemented. R R 1 1 ISI,,,,AINNIING FIRAMEW01IRK The 1996 adopted Comprehensive Plan for Port Townsend includes a housing element with a goals, policies, and an implementation 1996 Housing Strategy strategy—based on a Community Decision Statement that: I.Provide sufficient land A wide choice of housing types and prices is available for a supply with adequate diversity of lifestyles and incomes. Residential development infrastructure for is centered in distinct neighborhoods that are safe, secure, affordable housing and have identities and characters of their own. development. Opportunities for socializing, recreation, quiet and solitude 2.Commit to expanding are all close at hand, as are facilities and events that enrich financial support for low the body, mind and spirit. and moderate income housing. Eight goal statements of the City's housing element relate to: 3.Provide incentives for low • Housing supply and moderate income housing development. • Housing affordability • Housing condition 4.Make duplexes, triplexes and fourplexes, as well as • Housing types townhouse • Low income and special needs populations developments, easy to • Jobs/housing balance build. • Phasing of housing growth 5.Allow accessory housing • Permit processing/regulatory reform and special needs housing in single-family A 2007 Port Townsend/Jefferson County Housing Action Plan re- neighborhoods. affirmed the need to continue to implement the original 1996 strategies—as highlighted by the inset statement to the right. In 6.Maintain reasonable addition, the 2007 Action Plan included 42 housing strategies. impact and utility fees. Taken together with results of the 2010 Census, a 2012 update to 7.Facilitate predictableand timely permit the 1996 Comprehensive Plan housing element concluded that processing. "affordability continues to be the chief housing problem confronting Port Townsend."11 As a result, the updated housing element also recognizes that market intervention is necessary to supplement private housing delivery and ensure that affordable units are provided now and into the future.The current mix of institutional mechanisms and 11 Source is the Port Townsend Comprehensive Plan, V. Housing Element covering An Affordable Housing Strategy For Port Townsend [Ord. No.3075, §3.3, (June 18,2012)],July 1996. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 34 funding resources illustrates the increasing role that public agency and non-profit organizations now play in providing housing that would otherwise not be readily available. 1I 10US11HING Ell„,111 Ill„ II TIII IIS Ill,,,111 Ill„ III II III II The question may be asked: What actions have been taken to better assure housing availability and affordability?A detailed review of"What has the City Done to Support Affordable Housing” is provided by Appendix C. A brief listing of City policies and implementation steps taken to support affordable housing includes: • Incentives—including fee deferrals/waivers, density bonuses, reduced parking requirements for senior/disabled and multi-family units, also more permissive requirements for ADUs • Housing Trust Fund—earmarking a portion of property tax revenues for affordable housing • City Land for Eligible Affordable Housing Projects—including inventorying City-owned properties and prioritizing surplus lands for affordable housing • Allowing a Variety of Housing Types& Densities—including manufactured homes, 2-4 plex units in single-family zone areas,ADUs, upper-story apartments in mixed-use and commercial zoning districts, cottage housing, clustering, and planned unit developments • Public Infrastructure—albeit with limited resources to strategically invest in public infrastructure improvements that support desired multi-family and employment development • Promotion of Family Wage Jobs—as via tax exemption for new and expanding manufacturing businesses • Obtaining Grants—in partnership with affordable and special needs housing • Provision of Adequate Land Supply—including added multi-family land together with new mixed-use centers adopted with the 1996 Comprehensive Plan Even with these steps,the City continues to experience difficulty in fully addressing the needs in Port Townsend for affordable housing. As a smaller city, Port Townsend does not automatically receive Community Development Block Grant (CDBG) funds but must compete with other communities— limiting funding realistically available to support affordable housing development. The City has also attempted measures that "did not pan out"—including inclusionary zoning and stock plans. In both cases, the relatively small size of housing projects locally have made design of an easily understood and implementable program more difficult to achieve. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 35 IV... SUMMARY & NEXT STEPS This Port Townsend housing inventory and needs assessment concludes with a review of the relationship to State of Washington GMA and Jefferson County CPP requirements, associated assumptions and uncertainties CONSIS"TIENCYit r iii,,,,i GMA R1111 As noted at the outset, GMA offers considerable flexibility for local jurisdiction housing elements, subject to four minimum requirements, addressed by this assessment report as follows: A) Meeting Growth Needs The inventory and needs assessment builds from and is consistent with the adopted 2016-36 population and housing forecast allocations for Port Townsend. As with the current adopted plan,this updated assessment confirms that housing demand associated with updated population projections can be accommodated within the existing UGA over the next 20 years from 2016-36. At the same time, the assessment recognizes that actual growth may come in above or below projection and, further, that the mix of housing by tenure and income may well vary from what has been experienced in the past.This is a reason that this report also recommends monitoring outcomes and future updating, as needed. B) Supportive Public Policy This updated inventory and needs assessment confirms the continued applicability of the current 1996- adopted Comprehensive Plan goals, policies and implementing strategies—including Policies 9.01-9.16 for residential lands with Port Townsend's current plan, as amended July 2012. Rather than wholesale change, what is recommended are plan and policy refinements aimed to facilitate more effective implementation in the years ahead. C) Adequacy of Land Base Port Townsend continues to show a supply of residentially zoned vacant land that exceeds the projection of total acreage needed over a 20-year planning period—both from 1996 to present and looking forward to the next 20 years from 2016-36. In large part, this is in part due to lower actual population growth since 1996 than projected. However, there is growing evidence that the allocation of land supply is inadequate to meet current and projected needs—especially for higher density sites with infrastructure. D) Addressing All Economic Segments of the Community As with the 1996 plan, this updated assessment addresses the full spectrum of Port Townsend housing demand—for ownership and rental markets, for residents and non-residents, and for special needs and low income populations. What is apparent from this review is the need to take even more aggressive action in the years ahead, to more effectively address continuing issues of housing availability and affordability. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 36 IIII° IIII° CGINS11STIENCY This updated housing inventory and needs assessment has also been reviewed for consistency with Countywide Planning Policies (CPPB)for the provision of affordable housing. Eight policy statements are currently included as part of CPP Policy#6—Policy on the Provision of Affordable Housing as adopted in 1992. What follows are the 1992 CPPB together with discussion of anticipated policy consistency with this housing element update. 1. For planning purposes,the definition of"affordable housing"is: Those housing units available for purchase or rent to individuals or families with a gross income between the federally recognized poverty level and the median income for working families in Jefferson County; and who's costs,including utilities,would not exceed 36%of gross income. Discussion:This CPP was modified by County and City Resolution in 1994 to comply with the Washington Housing Policy act definition of"affordable housing" which states, residential housing that is rented or owned by a person or household whose monthly housing costs, including utilities other than telephone, do not exceed thirty percent (30%) of the household's monthly income. (This changed the planning policy's previous figure of 36%).This updated housing inventory and needs assessment utilizes the current 30%of AMI definition. 2. The provision of affordable housing is acknowledged as a general public need and will be addressed in Jefferson County through private sector programs and projects. Local government should not assume a direct role in the ownership or administration of public assisted housing to meet low income needs, rather this should be left to private, non-profit or quasi-public entities. Discussion:Affordable housing in Port Townsend is currently delivered through a mix of private, non-profit and quasi-public entities. 3. The housing and/or land use elements of comprehensive plans will include an assessment of land available and the process of siting special purpose housing(such as homeless shelters, group homes,etc.)to ensure that such housing can be accommodated. Discussion:This updated element includes an assessment of affordable and special needs housing, including the 2015 prepared ten-year plan for Ending Homelessness in Jefferson County WA. 4. A sufficient quantity of land will be appropriately zoned or designated to accommodate a wide range of housing types,densities and mixtures. Multi-family housing should only be located within UGAs or rural centers. Discussion:With this housing element update, the City is adopting the population and housing allocation targets for Port Townsend consistent with Jefferson County Resolution No. 38-15.This assessment concludes that there remains more residential land capacity than will be needed to accommodate projected housing growth from 2016-36. 5. An affordable housing strategy will be developed as part of the housing element of the comprehensive plan.This affordable housing strategy will examine existing regulations and policies to identify opportunities to encourage the provision of affordable housing Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 37 mechanisms such as accessory dwelling units("mother-in-law") or efficiency apartments, density bonuses, mitigation fees waivers, priority permit processing,and the like. Discussion:The housing element identifies eight housing strategies that represent priorities to address the full range of availability and affordability needs. 6. Each UGA shall accommodate its fair share of housing affordable to low and moderate income households according to its percentage share of the county population and by promoting a balanced mix of diverse housing types. Discussion:The City remains committed to addressing low and moderate income household needs.As low and moderate numerical shares were not specified with adopted Jefferson County Resolution 38-15,further discussion is suggested between the City and County to determine appropriate numerical share targets for each jurisdiction. 7. Undeveloped land owned by public entities will be inventoried and those that are appropriately located should be considered for development of low income housing. Consideration of assembling these parcels for development by non-profit housing organizations or private developers shall be encouraged. Discussion:The City has prepared and maintains an inventory of City owned properties which may be suitable for affordable housing. (City Resolutions 09-035, 10-024, 11-018, and 15-018). *** Policies regarding surplus of city land have been amended to prioritize affordable housing (Ordinance 3055). 8. The housing element will include criteria for locating higher density residential areas near public facilities and services,commercial services, arterial or within walking distance of jobs or transit. Discussion: Existing policies include criterial for the location of higher density residential (Policy 1.3, Goal 7 and associated policies) Assumed with this assessment is the applicability of the new lowered population and housing growth forecasts for Port Townsend and Jefferson County. Also assumed is continuation of observed demographic and economic trends, both regionally and locally. Key uncertainties relate, in part, to these assumptions. Population growth and housing demand could again shift and proceed off-forecast.The demographic mix of the community could also change in ways not readily anticipated—whether related to the mix of resident and non-resident demand, owner/renter preferences, or single/multi-family unit mix. Other uncertainties related to external factors that could affect housing in Port Townsend. Examples include prospects for continued economic growth, stable versus increased interest rates, and availability of mortgage loans. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 38 II 1` S"I"E IIPS Recommended with this housing inventory and needs assessment is an action agenda comprised of two distinct parts—starting with housing element adoption followed by immediate transition to a 1-2 year implementation work plan. Housing Element Adoption: Pivotal next steps from this point to adoption of an updated Comprehensive Plan for the City of Port Townsend are outlined to include: • Finalization of this inventory and needs assessment report—based on review and revisions to be considered involving input from representative private, non-profit and quasi-public housing industry providers and resource organizations. • As appropriate, refine housing goals, policies and strategies consistent with the findings and recommendations of this assessment—emphasizing plan elements for which implementation has not yet fully achieved previously adopted expectations of the current Comprehensive Plan and housing strategy. • Setting in place a mechanism for monitoring outcomes in cooperation with diverse public, non- profit and private stakeholders with this inventory and needs assessment to be periodically updated, at key checkpoints over the 2016-36 planning horizon. • Incorporation of this assessment and updated housing element through to adoption as part of the 2016 Port Townsend Comprehensive Plan—including review through public hearings and subsequent approval actions by the Port Townsend Planning Commission and City Council. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 39 Implementation Work Plan: Not all of the work related to strategic plan implementation can be expected to be accomplished by the time that an updated Comprehensive Plan is adopted in 2016. Rather, plan adoption can serve as a springboard for authorizing a near-term work plan, proposed to extend over the next 1-2 years. Key elements of this work plan directed and managed by City personnel are recommended to include: • Formalization of the ad hoc work group initially formed to review this needs assessment—as a longer term advisory committee to review and guide public-private initiatives for housing element implementation. • Launching and completing an updated housing buildable lands inventory(BLI)—addressing location and infrastructure priorities as needed to best leverage additional financially feasible, higher density, affordable, and special needs housing. • Considering and then adopting revisions to the City's residential and mixed use zoning map and capital facilities plan as may be needed to address BLI recommendations. • Conducting a feasibility study to assess and determine a suitable organizational structure and public-private funding mechanism for a Port Townsend or region-wide community housing land trust. • Separately and/or in conjunction with the land trust, earmarking funding for additional support to develop and sustain affordable housing in perpetuity for special needs populations including homeless and households at less than 30%AMI. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 40 APPENDIX A ,- DOCUMENTS REVIEWED What follows is a listing of documents reviewed for this housing inventory and needs assessment. 2015 Washington State Housing Needs Assessment, Washington State Department of Commerce Affordable Housing Advisory Board,January 2015. Accessory Dwelling Units in Port Townsend:Survey Results, prepared by City of Port Townsend, August 6, 2012. Comprehensive Plan, City of Shoreline, Element 3 Housing Supporting Analysis, adopted by Ordinance 649 on December 10, 2012. Changing Circumstances& Emerging Trends:A Review of Key Data to Inform Policy Choices, prepared for Port Townsend Comprehensive Plan Update,June 2015. Community Development and Land Use Committee Short Term Rental Issues and Recommendations, from Attachment 2—Resolution 15-035 Exhibit A. County-Wide Planning Policy for Jefferson County, Washington, as adopted December 21, 1992 and as amended in 1994 to reflect Washington Housing Act of 1993 definition of"affordable housing." Housing Element:Draft Plan & EIS, 1996. Jefferson County Housing Primer, prepared for Senator Murray's office, March 4, 2008. Jefferson County Resolution 38-15, approved October 26, 2015. Sets PT 20-year population allocations from 2016-36(12,165) and 2018-38(12,479). King County Comprehensive Plan 2012, Technical Appendix B:Housing, September 2012. Latest Lodging Version 10.23.15, Excel spreadsheet provided by the City of Port Townsend. NSP and GMA Housing Planning Guidebook, Beyond NSP:Lessons for Future Housing Planning, as prepared and updated by the Washington State Department of Commerce, March 2014. Port Townsend Comprehensive Plan, July 1996. Port Townsend Comprehensive Plan (Final Policy Plan), July 1996 as amended January 2015. Port Townsend Plans Appendices 1-7, prepared by Watterson West Group, December 1994. State of Washington 2015 Population Trends, prepared by Forecasting & Research Division, Office of Financial Management, September 2015. Subsidized Housing By Population Served, Excel spreadsheet provided by the City of Port Townsend, dated November 18, 2013. Supplement Directions:Port Townsend Comprehensive Plan, January 2015. Ending Homelessness In Jefferson County WA:A Ten Year Plan, prepared by OlyCAP and Jefferson Shelter to Housing Partnership, 2015. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 41 APPENDIX B ,-, HOUSING RESOURCES 14 GI ,111RO 111,,,,11�„11 I1I�1 u ii, i ii�c AGENCY 1I 10011HING 111wvivir.xIEIIRS Name/Location Subsidy Managed By #of Unifs #of Beds Subsidized Units 480 87 Northwest Passage Project-based Section 8 to 4 units at OlyCAP 18 18 (transitional housing) by Cl alIam HA 2011 Pfeiffer House HUD Section 8 OlyCAP 6 South Seven HUD Section 8(4-30-11) OlyCAP 15 Haines St.Cottages Emergency Family Shelter, no charge OlyCAP 8 (emergency shelter) Crossroads(transitional) HUD/SHP OlyCAP 11 Northwest Village USDA/HFC Tax Credit(exp. 12-5-03) Davick(pvt) 29 Kearney St.Apts. USDA(11-8-94) Davick(pvt) 18 Hancock St.Apts. USDA(exp 9-29-12) Pacific Housing 24 Advisory Discovery View Apts. USDA(exp.3-9-12)/HFC Tax Credit 47 Claridge Court USDA(exp. 12-7-04) Pacific Housing 44 Advisory Bishop Park USDA(exp.7-10-06) Davick(pvt) 30 Garden Court Apts. USDA(exp 5-2-02) Housing Authority of 40 Jefferson County Laurel Heights HFC Tax Credit Davick(pvt) 45 San Juan Commons HFC Tax Credit 50 Seaport Landing HFC Bond 24 Victoria House HFC Bond VICTORIA AID PROPCO 8 LLC(7/9/2013) Pat's Promise 30 Hendricks St.House 4 Marine Plaza Apts. HUD Section 8(exp 5-31-10) 40 Admiralty Apts. HUD Section 8(exp 12-31-09) 38 Dove House 20 Rental Assistance 137 Section 8-Individual Vouchers Peninsula Housing 137 Authority TBRA OlyCAP provides applications&case management Other 76 Habitat for Humanity of East 31 Jefferson County Hamilton Heights KCCHA Self-help Housing (HUD& 37 (moderate-priced homes) USDA plus local government&private sectorfunding) Eddy St. 4 19th St. 4 Total 693 87 Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 42 IIS IIS IIS"T"III II a II III"r y GIS a IIS Name OverView Collective Impact—Social Work groups address affordable housing, infrastructure, Infrastructure Subcommittee transportation,good work, social capital, and leadership. Local 2020 Promoting self-reliance, sustainability and resiliency at a community level ... moving us toward a lighter environmental footprint and a greater capacity to adapt to the challenges of climate change, peak oil and economic instability. Quimper Unitarian Church Affordable Housing Action Group Jefferson County Shelter to Evolved out of the Housing Action Plan Network(HAPN), which Housing Partnership (SHiP) organized to advocate for affordable housing through tapping the expertise and skills of our local governments and community residents to form innovative public/private partnerships to get the housing stock we need. Specific action steps are included in the Ten Year Plan to End Homelessness. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 43 AENDI C ,-,, CITYROLE E WHAT HAS THE CITY DONE TO SUPPORT AFFORDABLE HOUSING—? 1 ll Housing affordability continues to be a major issue confronting Port Townsend. So what is the City doing about it? Numerous City policies exist and have been implemented to support the development of affordable housing. Following is a brief overview: Incentives • Fee deferrals/waivers—The following fees are deferred as long as the property remains in low income status for 10 years (and then they are waived): o System development charges (SDCs), approximating $5,000 per unit, for reference, for the period 2011-2014,the City deferred SDC's twelve times($4,853 each)for a total of$58,236. o Building, development and utility connection fees (Savings of$2-2,500/home) • Density bonuses— Developers may be eligible for up to a 20 percent bonus density for projects that include a mix of housing types, utilization of townhouses, condominiums and apartments directed to providing a reasonable mix or diversity of bona fide affordable housing opportunities. • Reduced Parking requirements apply for multi-family housing developments serving senior/disabled residents. Excessive parking requirements add to the cost of housing. • More permissive parking and impervious surface limits for Accessory Dwelling Units Housing Trust Fund established Council has earmarked a portion of property tax revenues for affordable housing($10,000 annually beginning in 2015). Each year, up to$6,500 of the fund is allotted to building permit fee waivers for eligible projects.The remainder is available to advance affordable housing strategies(e.g., matching funds for grants). City land available for eligible affordable housing projects • Inventory of lands—The City has inventoried City-owned properties which may be suitable for affordable housing. Various housing providers have reviewed the list. One, a nascent community land trust, entered into a preliminary agreement to develop two of the properties. Unfortunately, the projects did not come to fruition but we remain hopeful. • Surplus lands policy prioritizes affordable housing—Affordable housing needs and opportunities shall be considered before surplusing public lands and consideration shall be given to disposing property for affordable housing needs or retaining properties in order to meet affordable housing needs. Allow a variety of housing types and densities The City strives to encourage the availability of affordable housing to all economic segments of the population by promoting a variety of housing types and densities including: Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 44 • Manufactured homes • Duplex/triplex and fourplexes in single-family zone • Accessory Dwelling Units (ADUs) • Upper-story apartments in the mixed-use and commercial zoning districts • Cottage housing development • Clustering • Planned unit developments Provide infrastructure The Great Recession has weakened the ability of state and local government to fund new infrastructure and services; nevertheless, the City has made a concerted effort to strategically invest in public infrastructure improvements that support desired growth. For example: The Great Recession has weakened the ability of state and local government to fund new infrastructure and services; nevertheless, the City has made a concerted effort to strategically invest in public infrastructure improvements that support desired growth. For example: • Landes Street sidewalk improvements between 12th Street and 19th Street not only improve pedestrian safety, but also benefit adjacent properties zoned for multi-family development. Funding sources for Landes Street are TIB and Federal STPUS Department of Transportation Grant. • Howard Street Extension I project—The project includes construction of a new roadway between Sims Way and Discovery Road and roundabout at Discovery Road, installation of water, sewer, power, telephone and cable (utilities) and stormwater drainage facilities. When completed, the project will create access to undeveloped commercial and sets up the roadway for residential properties to the north of the project. Funds sources for Howard Street are Transportation Improvement Board (TIB) Grant, Federal STPUS Department of Transportation Grant, Community Economic Revitalization Board Grant, and City Utility Fund. • Water Treatment Facility— How does water treatment facility benefit housing?The project includes the extension of utilities along Rainier Street north of Discovery Road (end of the Howard Street Extension I Project) to 201h Street. This area is zoned for multi-family residential development. At completion, the combination of the Howard Street Extension I Project and the Water Treatment Project will provide utilities from 6th Street and Howard Street to 20th Street, which is approximately 4,000 linear feet of utilities, thus setting the stage for development of the west side of Port Townsend. Promote family-wage jobs Jobs and Housing are inextricably tied. Without good paying jobs, we cannot afford housing. How can we remedy this imbalance? In addition to the public infrastructure investments noted above, the City is implementing economic development strategies including but not limited to: • Tax Exemption for New and Expanding Manufacturing Businesses—a qualifying manufacturing business can apply for exemption from business and occupation tax (Ordinance No 3125) Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 45 Obtain grants In partnership with affordable housing providers,the City has applied for grants to support development/acquisition of housing. For example: • 2008,The City helped Jefferson County Domestic Violence/Sexual Assault Center (DV/SAP) secure $425,000 Community Development Block Grant to help construct the Dove House transitional housing project. • 2014-15 Assisted Peninsula Housing in obtaining USRDA Shop funds for seven new single- family home starts. Provide sufficient land supply Finally, in conjunction with the 1996 Comprehensive Plan,the City: • Designated significant additional land for moderate and high density multi-family development. Both multi-family zoning districts have minimum density requirements. • Designated five new mixed-use centers and increased land available for commercial and manufacturing development. Why doesn't the city build housing? Larger cities and counties(over 50,000)are entitled to federal Community Development Block Grant (CBDG)funds.Their dedicated staffs manage and direct CBDG funds into qualified housing development. However,the City of Port Townsend must compete for funds and the lack of specific projects makes any application non-competitive.While the need exist generally, our area does include pockets of affluent neighborhoods which hinders our ability to compete absent a project targeting benefiting populations. Things that did not pan out • Inclusionary Housing—This strategy works best in markets with substantial new construction and larger developments and it can be problematic to implement. Its potential impact in Port Townsend was determined to be minimal at best. • Stock Plans—This option was considered, however, it was determined that different site locations require different building designs.There is no way to anticipate all of the different conditions that might trigger the need to alter the design. More to come The City continues to explore additional strategies to promote affordable housing. Ideas currently on the table include: providing more flexibility in housing types(e.g.,tiny homes/micro-apartments); reexamining parking requirements. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 46 APPENDIX D - SUPPLEMENTAL DATA Supplemental data for the Port Townsend Housing Element:Inventory and Needs Assessment provided with this appendix covers: • Population Trends (1996-2015)-for Port Townsend and Jefferson County • Comparative Population & Demographic Data-for Port Townsend,Jefferson County, and Washington state Population Trends (1996-2015) Port Jefferson % Chg from % of Year Townsend County Prior Year County 1996 8,275 25,700 1.3% 32.2 1997 8,330 26,300 0.7% 31.7% 1998 8,345 26,500 0.2% 31.5% 1999 8,400 26,600 0.7% 31.6% 2000 8,334 26,299 -0.8% 31.7% 2001 8,430 26,446 1.2% 31.9% 2002 8,455 26,600 0.3% 31.8% 2003 8,430 26,700 -0.3% 31.6% 2004 81535 27,000 1.2% 31.6% 2005 8,745 27,600 2.5% 31.7 2006 8,820 28,200 0.9% 31.3% 2007 8,865 28,600 0.5% 31.0 2008 81925 28,800 0.7% 31.0% 2009 8,895 29,000 -0.3% 30.7% 2010 9,113 29,872 2.5% 30.5% 2011 9,180 30,050 0.7% 30.5% 2012 9,185 30,175 0.1% 30.4% 2013 9,225 30,275 0.4% 30.5 2014 9,355 30,700 1.4% 30.5% 2015 9,3801 30,880 0.3% 30.4% Source:The Nielsen Company. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 47 Demographic Indicators 11, ,.. ,1U I ul. 1.1,1,, //fir,��� � 4 � ,,�ffff,;,✓. IJ»���JI�IIO�D�I�I7ra1�,1!(lllril��I1171U IOD�s1111�Il�llll� I�bli,����ll�ollllU�U Population 2015 Estimate(OFM) 9,380 30,880 7,061,410 2015 Estimate(Nielsen) 9,213 30,635 7,083,352 2010Census 9,113 29,872 6,724,540 2000 Census 8,334 26,299 5,894,124 Growth 2000-2010 9.35% 13.59% 14.09% Growth 2010-2015(OF M) 2.93% 3.37% 5.01% Growth 2010-2015(Nielsen) 1.10% 2.55% 5.34% 2015 Est.Population by Single-Classification Race 9,213 30,635 7,083,352 White Alone 8,437 91.58% 27,609 90.12% 5,336,784 75.34% Black or African American Alone 54 0.59% 356 1.16% 271,342 3.83% Amer.Indian and Alaska Native Alone 89 0.97% 602 1.97% 109,600 1.55% Asian Alone 201 2.18% 604 1.97% 561,574 7.93% Native Hawaiian and Other Pac.Isl.Alone 28 0.30% 72 0.24% 45,849 0.65% Some Other Race Alone 86 0.93% 241 0.79% 398,303 5.62% Two or More Races 318 3.45% 1,151 3.76% 359,900 5.08% 2015 Est.Population by Hispanic or Latino Origin 9,213 30,635 7,083,352 Not Hispanic or Latino 8,831 95.85% 29,546 96.45% 6,213,742 87.72% Hispanic or Latino 382 4.15% 1,089 3.55% 869,610 12.28% 2015 Est.Population by Age 9,213 30,635 7,083,352 Age 0-4 349 3.79% 1,027 3.35% 444,792 6.28% Age 5-9 368 3.99% 1,077 3.52% 446,864 6.31% Age 10-14 393 4.27% 1,220 3.98% 444,243 6.27% Age 15-17 266 2.89% 836 2.73% 273,353 3.86% Age 18-20 236 2.56% 767 2.50% 284,914 4.02% Age 21-24 309 3.35% 1,041 3.40% 384,960 5.43% Age 25-34 737 8.00% 2,365 7.72% 979,779 13.83% Age 35-44 829 9.00% 2,611 8.52% 924,397 13.05% Age 45-54 1,090 11.83% 3,617 11.81% 959,550 13.55% Age 55-64 2,029 22.02% 6,715 21.92% 932,353 13.16% Age 65-74 11554 16.87% 5,889 19.22% 604,638 8.54% Age 75-84 664 7.21% 2,497 8.15% 276,798 3.91% Age 85 and over 389 4.22% 973 3.18% 126,711 1.79% 2015 Est.Median Age 55.1 56.1 38.1 2015 Est.Pop Age 15+by Marital Status 8,103 27,311 5,747,453 Total,Never Married 1,749 21.58% 5,377 19.69% 1,754,062 30.52% Males,Never Married 983 12.13% 3,127 11.45% 969,552 16.87% Females,Never Married 766 9.45% 2,250 8.24% 784,510 13.65% Married,Spouse present 3,783 46.69% 14,822 54.27% 2,762,303 48.06% Married,Spouse absent 282 3.48% 778 2.85% 242,329 4.22% Widowed 820 10.12% 2,004 7.34% 284,671 4.95% Males Widowed 157 1.94% 428 1.57% 62,017 1.08% Females Widowed 663 8.18% 1,576 5.77% 222,654 3.87% Divorced 1,469 18.13% 4,330 15.85% 704,088 12.25% Males Divorced 568 7.01% 2,139 7.83% 309,018 5.38% Females Divorced 901 11.12% 2,191 8.02% 395,070 6.87% 2015 Est.Pop Age 25+by Edu.Attainment 7,292 24,667 4,804,226 Less than 9th grade 47 0.64% 323 1.31% 195,330 4.07% Some High School,no diploma 305 4.18% 1,222 4.95% 273,635 5.70% High School Graduate(or GED) 1,309 17.95% 5,613 22.76% 1,141,236 23.75% Some College,no degree 2,081 28.54% 6,897 27.96% 1,214,479 25.28% Associate Degree 526 7.21% 1,864 7.56% 462,041 9.62% Bachelor's Degree 1,735 23.79% 5,166 20.94% 971,245 20.22% Master's Degree 891 12.22% 2,390 9.69% 386,607 8.05% Professional School Degree 225 3.09% 568 2.30% 94,679 1.97% Doctorate Degree 173 2.37% 624 2.53% 64,974 1.35% Source:The Nielsen Company. Port Townsend Housing Element: Inventory&Needs Assessment + Page 48 Household & Income Indicators .111!!!!1 Illllll!l011111!!(lll 111 ld. I Ill..III IIIIIN III IIII +!!0111!((11 I A 111 dl..III VIII III ,I. IIII to ..Illi l./ ul LT,�I II IU Lv/,�I1 pr / L�,.V I q u"mnl,,l,, ly 11111I11�IIIl�,�IIlI1f1��111D� lI1H//1lll�»lll�l( .Illml(IIVU� ����J�II�IIIIIII��I��IIIIIII � �' Households 2015 Estimate 4,659 14,710 2,770,334 2010 Census 4,532 14,049 2,620,076 2000 Census 3,908 11,645 2,271,401 Growth 2000- 2010 15.97% 20.64% 15.35% Growth 2010-2015 2.80% 4.70% 5.73% 2015 Est.Households by Household Type 4,659 14,710 2,770,334 Family Households 2,393 51.369/o 8,816 59.93% 1,781,320 64.30% Nonfamily Households 2,266 48.64% 5,894 40.07% 989,014 35.70% 2015 Est.Group Quarters Population 114 631 142,083 2015 Est.Households by HH Income 4,659 14,710 2,770,334 Income<$15,000 744 15.97% 2,154 14.649/o 292,128 10.54% Income$15,000-$24,999 705 15.13% 1,711 11.63% 250,310 9.04% Income$25,000-$34,999 556 11.93% 1,740 11.83% 256,525 9.26% Income$35,000-$49,999 749 16.08% 2,412 16.40% 370,328 13.37% Income$50,000-$74,999 873 18.749/o 2,866 19.48% 522,955 18.88% Income$75,000-$99,999 384 8.249/. 1,656 11.26% 366,082 13.21% Income$100,000-$124,999 260 5.58% 804 5.47% 254,243 9.18% Income$125,000-$149,999 149 3.20% 496 3.37% 160,562 5.80% Income$150,000-$199,999 122 2.62% 412 2.80% 154,188 5.57% Income$200,000-$249,999 46 0.99% 161 1.09% 55,569 2.01% Income$250,000-$499,999 51 1.09% 221 1.50% 64,838 2.349/o Income$500,000+ 20 0.43% 77 0.52% 22,606 0.82% 2015 Est.Average Household Income $56,754 $61,654 $78,844 2015 Est.Median Household Income $41,499 $45,883 $60,320 2015 Est.Family HH Type by Presence of Own Child. 2,393 8,816 1,781,320 Married-Couple Family,own children 476 19.89% 1,541 17.48% 566,496 31.80% Married-Couple Family,no own children 1,350 56.41% 5,723 64.92% 794,737 44.62% Male Householder,own children 79 3.30% 244 2.77% 69,313 3.89% Male Householder,no own children 51 2.13% 236 2.68% 61,535 3.45% Female Householder,own children 273 11.41% 608 6.90% 171,139 9.61% Female Householder,no own children 164 6.85% 464 5.269/o 118,100 6.63% 2015 Est.Households by Household Size 4,659 14,710 2,770,334 1-person 1,912 41.04% 5,007 34.049/o 768,641 27.75% 2-person 1,767 37.93% 6,599 44.869/o 941,918 34.00% 3-person 514 11.03% 1,570 10.67% 433,623 15.65% 4-person 306 6.57% 942 6.40% 349,552 12.62% 5-person 100 2.15% 353 2.40% 161,396 5.83% 6-person 39 0.84% 150 1.02% 68,695 2.48% 7-or-more-person 21 0.45% 89 0.61% 46,509 1.68% 2015 Est.Average Household Size 1.95 2.04 2.51 2015 Est.Households by Presence of People Under 18 4,659 14,710 2,770,334 Households with 1 or More People under Age 18: 897 19.25% 2,680 18.22% 884,953 31.94% Married-Couple Family 500 55.749/o 1,665 62.13% 599,530 67.75% Other Family,Male Householder 87 9.70% 281 10.49% 80,074 9.05% Other Family,Female Householder 296 33.00% 679 25.349/o 194,377 21.96% Nonfamily,Male Householder 10 1.11% 41 1.53% 8,201 0.93% Nonfamily,Female Householder 4 0.45% 14 0.52% 2,771 0.31% Households with No People under Age 18: 3,762 80.75% 12,030 81.78% 1,885,381 68.06% Married-Couple Family 1,325 35.22% 5,603 46.58% 761,670 40.40% Other Family,Male Householder 43 1.149/o 196 1.63% 50,853 2.70% Other Family,Female Householder 140 3.72% 392 3.26% 94,850 5.03% Nonfamily,Male Householder 875 23.269/o 2,688 22.34% 478,004 25.35% Nonfamily,Female Householder 1,379 36.669/o 3,151 26.19% 500,004 26.52% Source:The Nielsen Company. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 49 Family Household & Housing Indicators Family Households 2015 Estimate 2,393 8,816 1,781,320 2010 Ce nsus 2,320 8,394 1,687,455 2000 Census 2,198 7,578 1,499,134 Growth 2000- 2010 5.55% 10.77% 12.56% Growth 2010-2015 3.15% 5.03% 5.56% 2015 Est.Families by Poverty Status 2,393 8,816 1,781,320 2015FamiliesatorAbove Poverty 2,124 88.76% 8,106 91.95% 1,616,338 90.74% 2015 Families at or Above Poverty with Children 741 30.97% 2,336 26.50% 725,681 40.74% 2015 Families Below Poverty 269 11.249/o 710 8.05% 164,982 9.269/o 2015 Families Below Poverty with Children 205 8.57% 505 5.73% 128,295 7.20% 2015 Est.Occupied Housing Units by Tenure 4,659 14,710 2,770,334 Owner Occupied 2,900 62.25% 10,961 74.51% 1,764,470 63.69% Renter Occupied 1,759 37.75% 3,749 25.49% 1,005,864 36.31% 2015 Owner Occ.HUs:Avg.Length of Residence 15.6 14.3 15.1 2015 Renter Occ.HUs:Avg.Length of Residence 7.3 7.8 7.2 2015 Est.Owner-Occupied Housing Units by Value 2,900 10,961 1,764,470 Value Less than$20,000 51 1.769/o 270 2.469/o 40,123 2.27% Va I u e$20,000-$39,999 41 1.41% 274 2.50% 29,974 1.70% Va I u e$40,000-$59,999 8 0.28% 152 1.39% 20,960 1.19% Va I u e$60,000-$79,999 3 0.10% 282 2.57% 23,613 1.349/o Va I u e$80,000-$99,999 10 0.349/o 163 1.49% 34,808 1.97% Va I u e$100,000-$149,999 143 4.93% 703 6.41% 147,707 8.37% Va I u e$150,000-$199,999 309 10.669/o 1,247 11.38% 239,185 13.569/o Va I u e$200,000-$299,999 810 27.93% 2,542 23.19% 454,430 25.75% Va I u e$300,000-$399,999 708 24.41% 2,052 18.72% 291,161 16.501/o Va I u e$400,000-$499,999 373 12.869/o 1,410 12.869/o 183,984 10.43% Va I u e$500,000-$749,999 241 8.31% 1,042 9.51% 179,419 10.17% Va I u e$750,000-$999,999 111 3.83% 443 4.049/o 68,539 3.88% Value$1,000,000 or more 92 3.17% 381 3.48% 50,567 2.87% 2015 Est.Median All Owner-Occupied Housing Value $310,593 $294,001 $276,110 2015 Est.Housing Units by Units in Structure 5,326 18,442 3,039,620 1 Unit Attached 168 3.15% 317 1.72% 109,755 3.61% 1 Unit Detached 3,838 72.069/o 13,266 71.93% 1,918,647 63.12% 2 Units 203 3.81% 331 1.79% 79,428 2.61% 3 or 4 Units 161 3.02% 322 1.75% 113,262 3.73% 5 t 19 Units 219 4.11% 569 3.09% 303,385 9.98% 20 to 49 Units 280 5.269/o 281 1.52% 135,046 4.449/o 50 or More Units 238 4.47% 276 1.50% 159,992 5.269/o Mobile Home or Trailer 164 3.08% 2,607 14.149/o 214,012 7.049/o Boat,RV,Van,etc. 55 1.03% 473 2.569/o 6,093 0.20% 2015 Est.Housing Units by Year Structure Built 5,326 18,442 3,039,620 Housing Units Built 2010 or later 152 2.85% 753 4.08% 172,554 5.68% Housing Units Built 2000 to 2009 1,042 19.569/o 3,270 17.73% 480,837 15.82% Housing Units Built 1990 to 1999 999 18.769/o 4,243 23.01% 507,306 16.69% Housing Units Built 1980to 1989 790 14.83% 2,791 15.13% 407,202 13.401/o Housing Units Built 1970 to 1979 824 15.47% 3,989 21.63% 498,192 16.39% Housing Units Built 1960to 1969 279 5.249/o 1,103 5.98% 283,448 9.33% Housing Units Built 1950 to 1959 151 2.849/o 505 2.749/o 229,182 7.549/o Housing Units Built 1940to 1949 239 4.49% 437 2.37% 148,024 4.87% Housing Unit Built 1939 or Earlier 850 15.969/o 1,351 7.33% 312,875 10.29% 2015 Est.Median Year Structure Built 1984 1987 1981 Source:The Nielsen Company. Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 50 Economic Indicators 111!!V IIIll11!l011111!!(lll 111 ld. N / ;Ill..III IIIIIN III IIII +!!0111!((11 I A 111 dl..III VIII III ,1111111 IIII IJP Jml�i 114 'bye Ilii >Iuli' �� ��>11<il(IR1lllq , lflllllfiU��� 1 I'I�I�f11!!I( 1, 111 .... ,I „111„1�!„11ir��1.,i1,+�,�1�,111111jjjjjjjjjjj�l������r��������������������������������������������� 2015 Est.Households by Number of Vehicles 4,659 14,710 2,770,334 No Vehicles 506 10.869/o 768 5.22% 186,913 6.75% 1Vehicle 1,774 38.08% 4,235 28.79% 859,902 31.04% 2Vehicles 1,482 31.81% 5,757 39.149/o 1,056,138 38.12% 3Vehicles 658 14.12% 2,908 19.77% 449,554 16.23% 4Vehicles 186 3.99% 734 4.99% 149,463 5.40% 5 or more Vehicles 53 1.14% 308 2.09% 68,364 2.47% 2015 Est.Average Number of Vehicles 1.7 2.0 1.9 2015 Est.Pop Age 16+by Employment Status 8,016 27,037 5,657,862 In Armed Forces 1 0.01% 26 0.10% 48,468 0.869/o Civilian-Employed 3,794 47.33% 11,933 44.149/o 3,286,466 58.09% Civilian-Unemployed 507 6.32% 1,409 5.21% 339,584 6.00% Not in Labor Force 3,714 46.33% 13,669 50.569/o 1,983,344 35.05% 2015 Est.Civ.Employed Pop 16+by Class of Worker 3,908 12,303 3,342,131 For-Profit Private Workers 1,664 42.58% 5,467 44.449/o 2,180,821 65.25% Non-Profit Private Workers 509 13.02% 1,187 9.65% 272,678 8.16% Local Government Workers 428 10.95% 1,292 10.50% 217,475 6.51% State Government Workers 136 3.48% 509 4.149/o 215,601 6.45% Federal Government Workers 79 2.02% 510 4.15% 117,849 3.53% Self-Employed Workers 1,072 27.43% 3,294 26.77% 333,240 9.97% Unpaid Family Workers 20 0.51% 44 0.36% 4,467 0.13% 2015 Est.Pop 16+by Occupation Classification 3,908 12,303 3,342,131 Blue Collar 555 14.20% 2,351 19.11% 639,838 19.14% White Collar 2,473 63.28% 7,183 58.38% 2,045,753 61.21% Service and Farm 880 22.52% 2,769 22.51% 656,540 19.64% 2015 Est.Workers Age 16+by Transp.to Work 3,815 11,961 3,318,506 Drove Alone 2,471 64.77% 8,411 70.32% 2,407,972 72.569/o Car Pooled 250 6.55% 1,281 10.71% 351,205 10.58% Public Transportation 49 1.28% 154 1.29% 190,772 5.75% Walked 287 7.52% 455 3.801/o 117,241 3.53% Bicycle 137 3.59% 175 1.469/o 30,423 0.92% Other Means 60 1.57% 310 2.59% 39,756 1.20% Worked at Home 561 14.71% 1,175 9.82% 181,137 5.46% 2015 Est.Workers Age 16+by Travel Time to Work Less than 15 Minutes 2,163 4,893 836,232 15-29 Minutes 534 2,961 1,160,341 30-44 Minutes 194 1,413 656,946 45-59 Minutes 77 556 238,320 60or more Minutes 222 848 248,360 2015 Est.Avg Travel Time to Work in Minutes 19.00 24.00 28.00 Source:The Nielsen Company. Port Townsend Housing Element: Inventory&Needs Assessment + Page 51 APPENDIX E - STAKEHOLDER INPUT In addition to the statistical information gathered for this housing inventory and needs assessment, qualitative on-the-ground input was sought from a sampling of housing provider interests—including real estate brokerage, property management, and public/non-profit providers. While not intended as a scientifically valid survey, the results have been useful to provide a better understanding of some of the market dynamics behind the data. Results are briefly summarized below—organized by overview observations and then actions for improved housing availability and affordability. 1111SII IR TIII II IIN FOIR SAI„,ll III IMI II Ill,,, 1I IOUSIIING For Sale Residential: • Port Townsend was in recession for so long, leading to hesitancy about predicting the future • Housing sales currently strongest for 1,500-2,000 square foot homes at$250,000-$350,000 for retirees or second homes, mostly baby boomers • Lower priced homes are more attractive to area residents including first-time buyers and families;the market above$300,000 is characterized by more out-of-area, pre-retiree buyers • Uptown and the historic area have done well in pricing, properties over$350,000 don't sell as well • Cost of buying, repairing and maintaining old Victorians has diminished interest; older residents want newer housing and younger families that may be interested can't afford the cost • ADUs make a big difference on housing property values • Growing interest in tiny homes or cottage housing, but not readily financeable • Financing and achieving supportive appraisals remains difficult, many transactions are for cash Rental Housing: • Rental market is diverse—from singles to older retirees, also younger with kids • Section 8 vouchers serve a mixed population—especially senior and disabled residents • Developing market rate apartments is difficult because they "can't cash flow” • Apartment projects tend to be small, the biggest at only 15 units • In some cases, condos are being converted to apartments—increasing rental availability • Would love to do other projects in Port Townsend, but there are no suitable multi-family sites • Multi-family land is there, but not served with infrastructure and often at sites that are environmentally constrained • Tax credits are the only way to finance new multi-family construction • Developers can't afford infrastructure for apartments, so they are not building • Can't burden properties with cost of urban infrastructure unless the development is subsidized • The world is moving away from transitional housing toward more supportive services Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 52 • There is way more need than availability of shelter ... virtually no rental availability • The rental market is at "99%occupancy'with a waiting list (property manager) • Vacancy is at 0%, never seen a market like this • Current land use targets the most multi-family zoning to locations where there is no density • Several groups have ideas such as tiny homes;we need to get everyone on the same page to be able to make this a reality for our community • Infrastructure is currently available, primarily in areas zoned for low, rather than high, density Acriiaimsiii,,,, iiR l i Iii) 1 �IOUS11ING AVAIII,,, 111 ii ISI, 11 r • Future projects could range from rental to homeownership (affordable housing provider) • Do more density close-in, as with row housing • Increase the amount of R-III and R-IV zoning in core area neighborhoods that are walkable and with bus service • Limit costly infrastructure requirements to develop raw land • Upzone some land, where the infrastructure is in-place • Provide land that is shovel-ready for development • Encourage the City to be more pragmatic with partnerships for housing infrastructure • Re-evaluate Port Townsend's development standards (e.g., road widths) • Revise ADU standards allowing an owner to rent out both the primary home and ADU to increase the availability of rentals • Create a housing land trust to develop, own and manage affordable housing in perpetuity Port Townsend Housing Element: Inventory&Needs Assessment ♦ Page 53