Council reviews inclusionary zoning options for East Rail mixed‑use zone; staff recommends mandatory set‑asides or fee alternatives
January 20, 2026 | Woodinville, King County, Washington
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Woodinville city staff and consultant Forum Placemaking presented a study session on inclusionary zoning and policy options for the future East Rail mixed‑use (EMU) area on Jan. 20.
"There would be a requirement for developers of rental housing projects to provide a minimum of 10% of the units at 80% area median income," Mr. Grumbach summarized for council, and the report also offered an alternative: a minimum of 10% at 60% AMI paired with an eight‑year multifamily tax exemption (MFTE) to improve financial feasibility for developers. Staff said mandatory requirements are more likely to be practical in multifamily rental zones; for townhouse and for‑sale product, the analysis found that making units affordable at 80% AMI is often not feasible without significant subsidy.
The recommendations also propose a fee‑in‑lieu in residential (R) zones: the report used $10 per square foot applied to occupied area above 1,500 square feet as a mechanism to generate funds for affordable housing projects elsewhere in the city. The consultant and staff discussed indexing fees annually to track construction cost increases.
Council members pressed for clarity about what AMI means in practical terms. "At 60%, AMI for a 4 person household, that's $94,260," Council member Evans said during the discussion, noting that these income levels typically apply to many working households such as teachers and first responders. Council member Millman cautioned about permitting 75‑foot heights in parts of the city without corresponding infrastructure, saying, "I would encourage us to be very careful with that." Staff recommended taking the consultant's findings to the Planning Commission to draft regulatory language and return to council with focused options.
What happens next: staff will use the report to develop proposed code updates to the Planning Commission; council indicated interest in retaining flexibility between rental and ownership opportunities and in protecting the city's ability to capture fee‑in‑lieu revenue where appropriate.
"There would be a requirement for developers of rental housing projects to provide a minimum of 10% of the units at 80% area median income," Mr. Grumbach summarized for council, and the report also offered an alternative: a minimum of 10% at 60% AMI paired with an eight‑year multifamily tax exemption (MFTE) to improve financial feasibility for developers. Staff said mandatory requirements are more likely to be practical in multifamily rental zones; for townhouse and for‑sale product, the analysis found that making units affordable at 80% AMI is often not feasible without significant subsidy.
The recommendations also propose a fee‑in‑lieu in residential (R) zones: the report used $10 per square foot applied to occupied area above 1,500 square feet as a mechanism to generate funds for affordable housing projects elsewhere in the city. The consultant and staff discussed indexing fees annually to track construction cost increases.
Council members pressed for clarity about what AMI means in practical terms. "At 60%, AMI for a 4 person household, that's $94,260," Council member Evans said during the discussion, noting that these income levels typically apply to many working households such as teachers and first responders. Council member Millman cautioned about permitting 75‑foot heights in parts of the city without corresponding infrastructure, saying, "I would encourage us to be very careful with that." Staff recommended taking the consultant's findings to the Planning Commission to draft regulatory language and return to council with focused options.
What happens next: staff will use the report to develop proposed code updates to the Planning Commission; council indicated interest in retaining flexibility between rental and ownership opportunities and in protecting the city's ability to capture fee‑in‑lieu revenue where appropriate.
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