Details Lacking On How Washington Towns, Developers Will Address The Crucial ‘Missing Middle’

The need for more “middle housing” is a growing concern among both Washington residents and local government officials, and developers need to be part of the conversation, too, according to a Seattle-based attorney who specializes in real estate and land use issues. Stephen H. Roos, with the law firm Hillis Clark Martin & Peterson, said that developer input is vital to make sure that official edicts covering this type of housing are workable.

Middle housing refers to residential development such as townhouses, duplexes and triplexes that, income-wise, generally fit between the categories of affordable and market-rate dwellings. It has been called the “missing middle” because it can be overshadowed by other housing types in discussions about America’s housing needs.

Roos said the asset class is getting more attention in Washington due to state legislation that requires fast-growing jurisdictions to manage the development of all housing types, including middle housing. HB 1220 effectively adds teeth to the state’s 1990 Growth Management Act, which requires local jurisdictions to create comprehensive housing plans to manage their growing populations.

He added that the required elements of the act’s housing affordability component had been pretty “loose and fuzzy” until 2021, when the Washington legislature adopted a bill that was very specific about the types of housing that jurisdictions must provide for in their comprehensive plans.

“Before, all it said was cities needed to pay some attention to affordable housing,” Roos said. “Now, it says they have to plan for moderate, low, very low and extremely low-income households.”

The legislation requires municipalities to compile an inventory of their housing needs in each of those household segments. Roos said the challenge for towns will be to create land use ordinances that demonstrate how they will meet those needs. 

“The state is quite exacting in terms of what local planning departments now have to address in their comprehensive plans,” he said. “It’s going to come to a head in 2024, when all jurisdictions have to update their comprehensive plans to include these new housing requirements.”

In September, the Growth Management Planning Council of King County, the state’s most populous county, released a report projecting that it will need 308,677 new housing units, ranging from extremely low-income housing to households making well over the county’s median income, over the next two decades.

More than 30,000 of those homes are needed for the moderate housing segment, which the new legislation defines as households meeting between 80% and 120% of area median income.

These are households whose income exceeds “affordable” housing requirements, but which still might find themselves priced out of homes in fast-growing areas of Seattle, Bellevue and other cities. Middle housing is increasingly viewed as the most viable type of housing for these households and often takes the form of house-scale developments with multiple units. 

More than 60% of Washington voters support growing the state’s stock of all housing types. The challenge, however, is in how to make it happen. 

Roos noted that the GMPC report did not address that question. It stated merely that its projection “does not consider the cost of, resources available for, or barriers to building that housing.”

Until those questions are resolved, developers are left in limbo.

“They're grappling with how to provide housing that the middle segment desperately needs, while also trying to figure out how to make it pencil out,” Roos said. “Traditionally, a development might have 10% lower-income housing and 90% very expensive housing. Now, how do we build both the low-income housing and the middle housing and make it work? It’s not so clear.”

Katie Rogers, communications director for the King County Department of Community and Human Services, said the county is working to address questions and reduce obstacles to building more middle and other needed housing types.

“There’s a lot we can do, together with our partners in other jurisdictions, to ensure our communities have the policies and regulations in place to support affordable housing,” she said. “Jurisdictions can look at practices like reducing permitting timelines or parking requirements, allowing multifamily housing in more places and offering incentives like additional density for projects that include affordable housing.”

In the meantime, Rogers urged developers to work closely with local planning and permitting departments.

“All of the jurisdictions in King County are currently working on comprehensive plan updates, so it’s a good time to engage with the government around planning and development,” Rogers said. 

Adding more urgency to these questions, the state has given local jurisdictions two years to update their comprehensive plans to include new housing requirements, including for middle housing, Roos noted.

“That is what has shaken the development community: seeing this coming down the pike,” Roos said. “Developers need to be brought into the conversation to address the questions about costs and resources.”

This article was produced in collaboration between Hillis Clark Martin & Peterson and Studio B. Bisnow news staff was not involved in the production of this content.

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