Mercer Island's Approach to Upzoning (October 2024)

Addressing Housing Needs While Upholding Stringent Affordability Mandates

Mercer Island is forging ahead with plans to increase the housing capacity around its Town Center, particularly near the future Sound Transit’s 2 Line light rail station. This move falls in line with the requirements of the recently passed House Bill 1220, which mandates cities to prepare for anticipated housing needs that align with the incomes of future residents and to adapt their zoning laws accordingly.

The heart of the initiative is the modest expansion of building heights in key areas, allowing for up to seven stories worth of residential space near the I-90 and up to five stories further south. This strategic upzoning is a vital step to leverage the proximity of the robust transit infrastructure expected by late 2025 or early 2026. However, the true challenge arises not from upzoning itself, but from the simultaneous affordability mandates.

These mandates may indeed pose a significant hurdle. By demanding that 15% of the units in new developments are kept affordable for those making 50% or less of King County's Area Median Income (AMI), there's a risk of deterring the very development this plan is designed to encourage. Despite the noble intentions behind these mandates, they could potentially limit the fruition of new housing—affordable or otherwise—within the Town Center, which hasn't seen any new buildings since 2014.

The city's overall goal is to meet a 20-year housing target of 1,239 dwelling units, nearly 60% of which are expected to be affordable for lower-income residents. Though the current residential zones could theoretically accommodate over 1,400 homes without zoning changes, much of this capacity lies in single-family zones, raising questions about the distribution and accessibility of future housing growth.

As Mercer Island moves forward with its plans, the juxtaposition of upscale single-family homes—averaging values around $2.3 million—and the need for affordable multifamily housing reveals the complex dynamics of urban development and income diversity.

Despite local opposition and past moratoriums, Mercer Island's city council has outlined a commitment to change, focusing on increased capacity and mandatory affordable units within its Comprehensive Plan update, due by the end of 2024. Additional strategies such as streamlined design review processes and lower parking requirements have been suggested as potential ways to make affordable housing more feasible for developers.

Mayor Salim Nice remains optimistic, pointing to potential external funding sources such as corporate housing funds to assist with the development of affordable units for sale. Still, the city's own financial contribution to affordable housing remains minimal.

As Mercer Island grapples with the requirements of House Bill 1220 and broader regional housing challenges, the decisions made by the city council in the immediate future will significantly impact whether the community will meet its growth and affordability targets. The delicate balancing act between fostering development and imposing affordability mandates will serve as a litmus test for Mercer Island's approach to responsible, inclusive urban growth.