Developers concerned Spokane Valley moratorium on planned residential development could exacerbate region’s housing crisis

Last week, the Spokane Valley City Council voted to sustain a one-year moratorium on planned residential developments, arguing developers had been taking advantage of a loophole using a recent change in city code to build apartments or duplexes in neighborhoods where they don’t belong. Developers argue the moratorium should have been more limited, saying they need every tool available to meet the region’s growing housing shortage.

Spokane Valley City Council first adopted the moratorium in November, but didn’t hold a public hearing until January. They voted last week to sustain the one-year moratorium until the planning commission could come up with a solution. The moratorium only applies to planned residential developments, which are smaller developments that have many of the normal restrictions for housing types waived, and can be built in any residential areas in the city.

According to the city code, they were intended to allow for more housing types and to provide more flexibility.

Todd Whipple, president of Whipple Consulting Engineers, said he put in a few applications on behalf of developers before the moratorium was put in place, and it’s one of several limitations from the city that has restricted developers’ ability to provide affordable housing in nice neighborhoods.

“I think that’s unfair; affordability and quality of life should go hand in hand,” he said.

He said he understands the concern about larger apartment complexes in single-family neighborhoods, but duplexes, townhouses and cottages in a planned residential development could help diversify a neighborhood and provide affordable options for young people and families that can only afford apartments in large complexes.

Spokane Valley City Councilman Rod Higgins, who was the mayor at the time the city adopted the change, said the planned residential development category was always designed to encourage and support homeownership, which could include townhouses or smaller lot sizes, but it was not meant to be used as a tool for developers to build more apartments and duplexes.

“Our intent was for single-family residential; the more you have, the better the prices,” he said.

He said the moratorium will only impact one small category of development and applications for other types of zones can still go forward. Higgins said the planning commission and city staff were still working toward a solution to planned residential developments, and the moratorium was designed to prevent a rush of applications while they deliberated.

“I have confidence in our staff that we’ll find a reasonable solution and a workable solution,” he said.

According to a housing needs assessment the city published in October, Spokane Valley will need about 6,660 housing units in the next 17 years to meet the demand.

According to the city’s assessment, between 2012 and 2018, Spokane Valley rent for a two-bedroom apartment increased by about 15%, while renter income increased by about 12%. In the same time, homeowners’ income increased by 25%, while home sales prices in Spokane Valley increased by 48%.

Whipple argued that excluding denser housing options from planned residential developments, or other zoning changes, will make it far more difficult for developers to build enough units to meet the projected or current need for housing.

He argued Spokane Valley should be following the city of Liberty Lake’s lead. Liberty Lake, which shares a border with Spokane Valley, has allowed developer Jim Frank, founder of Greenstone Homes, to design developments that include duplexes, single-family detached homes, townhouses and some retail in the same neighborhoods.

Frank, the developer behind Kendall Yards in Spokane, said he also had some concerns with the moratorium. He said he understood why Spokane Valley needed to pause new applications to sort out any unintended consequences of a rule change, but a blanket restriction or taking away a tool long-term could create more challenges in an already tight housing market.

“You can’t just shut off one lever and not open another,” he said. “You have to create opportunities for infill development to occur.”

Frank said he’s concerned about the future of affordable housing for the entire Spokane County area, saying if leaders don’t work to provide or preserve more tools to allow for infill development, the next generation could be priced out of this region and choose to live in Kootenai County, or other areas that have more options.

“You’re creating a lot of wealth for people who already own a house, but someone’s paying for that,” he said. “The people who are paying for that are the people who don’t own houses, and the prices are escalating.”

Spokane Valley City Councilman Tim Hattenburg said he hopes the City Council, planning commission and city staff will be able to come to a compromise that could allow for infill, but respect the character and residents of single-familly neighborhoods.

Hattenburg said constituents have contacted the city with concerns about duplexes and developers trying to use the planned residential development category to put them in neighborhoods where they’re not normally allowed. He said the most common complaint is from homeowners saying they were afraid the developments could lower the value of their homes.

He said in his own personal experience, a developer building a duplex can sometimes improve a neighborhood. He said several years ago, a developer purchased a run-down house in his neighborhood that had been used for drugs and illegal activity, demolished it and built a duplex. Since it was built, it’s been well cared for and caused fewer issues than the single-family home that preceded it.

“I think it’s a case-by-case situation,” he said.

He said he’s hopeful over the next year during the moratorium the city will be able to find a solution that’s fair to both developers and single-family homeowners.

The planning commission last discussed planned residential developments in its Dec. 10 meeting and is scheduled to meet again on Jan. 28. The agenda, links to attend the meeting and schedule can be found on the city’s website.