City Council Workshops

0:00 Vancouver City Council today is Monday, August 3rd, 2026, and we are going to be discussing the Vancouver Public Works Operation Campus with some supplemental information. City Manager, did you want to kick this off? Yeah, thank you, Mayor. Just like to welcome the staff back after this item was tabled by the City Council with questions. I hope we've had a chance to provide the supplemental information that you were looking for, and with that, we'll go right into the second presentation. Good afternoon. My name is Jean Singer. I am the Division Manager for Facilities Capital Projects in the Department of General Services. With me is Jason Olson. He's a project manager in our group, and he's the project manager for this project, and

0:56 we're here to share some supplemental information on the Vancouver Public Works Operation Campus. So our agenda for today is to review our charter alignment and City Council engagement on the project over the past several years. We're going to review project funding and some past estimates. We're going to go through our GCCM selection process. GCCM stands for General Contractor Construction Manager, and then we're going to talk about some cost reductions and cost management protocols that we have in place, and as well as the existing construction status, and then there's an opportunity for discussion. So charter alignment, a policy charter was created for this project. It was an opportunity to demonstrate how policy can be transformational in the community and reflected in the built environment. We had four focus areas that were to be integrated throughout the design, their resiliency and safety, environmental sustainability, equity and inclusion, and finally capital planning,

1:55 asset management, and financial policies. In alignment with the project charter, City Council touch points have delivered updates on project elements and approaches that were crafted to be in alignment with those focus areas. We also provided updates on scope schedule budget and community outreach. We also took those times to introduce project teams members. We introduced Tim Buck, who is the operations manager. Public Works will be serving the community out of this site. We introduced TCF Architecture as the lead architect to share their vast experience in dividing these unique facilities, and we brought Skanska last year to meet council so that you could see that just the team is integrated and just see the faces that are involved. So this is a timeline of our engagement with council. The overall timeline shares the different design and construction phases along with council updates and actions, and so I'll describe the timeline.

2:53 The first row shows the year starting in 2021 through this year of 2026. The next row is design phase, and the design phase is broken up into different components. We had two years of preliminary design, two years and a half of schematic design, and then we are in the last components, which is DD, which is design development, and then construction documents. Design development is really the end of the design. There is no more scope that is added. When we get to this point in the construction document phase, we're really just looking at creating a detailing and coordinating the disciplines and really executing that design on paper into constructability. So some examples would be the electrical engineers have to figure out how many circuits you need on a panel, the plumbing design, how many valves you need in certain areas, roofing detail, splashing. So that's the last part of design that we are in right now. The next line describes construction.

3:53 It took about a year to get our contractor on board. We started that in the third quarter of 2024, and we completed that around June of 2025. We were able to immediately move into construction once the contractor was on board because this project is over three years of construction, and we wanted to make sure that we were being aggressive enough to take advantage of the design work we had done, and then getting rolling design packages out since escalation is so high still. The next line is about council updates. The project charter was adopted in September of 2021. That's indicated with a dark diamond on the screen, and then since over the last six years, including right now, we have come to council nine different times with updates on the project. The updates were typically once a year up until about 2025, at which point we came three times because the design was getting more towards construction, and this year we've come to council twice.

4:51 And the last line talks about council actions. There's been many council actions on this project related to professional services contracts, but focusing just on the ones related to construction. The first contract was executed in June of 2025. Subsequent to that, we have come to the council seven different times for amendments which execute various components of construction. The last time we'll come would be in December of this year. Project funding. So the project is fully funded. The funding is a combination of both cash reserves and revenue bonds. Public Works has affirmed that the current project cost has been included in the rate model along with all of their anticipated future projects. They see the target increase rate is at about 4.5 percent, which aligns with past practice and would be their future target as well. Project estimates reviewed. So we went through an interesting exercise.

5:48 We reviewed the original estimate when there was a decision in 2018 to move from the existing site to a new site. No site had been selected. A project estimate was created. That estimated that the project would cost $126 million in 2021 construction. That estimate also had a number for 2026 construction of $150 million. That was independent of any site. Since then, we've had a historic escalation of 37 percent from 2020 to 2026, and that's according to the construction index that's provided by Mortenson for the Portland metro area. If you take that 2021 number of 126 million, you apply that escalation, that number becomes $176 million in today's dollars. That is, again, without a site. When you add in $20 million for site mitigation, regulatory requirements, and the high level of environmental sustainability this project provides, as well as the $20 million contingency

6:48 we've been holding, that would give you a project cost of $212 million. That means our actual estimate is within about 6 percent of a number that was created in 2018. That's actually pretty good. I'm going to turn it over to Jason to talk through the rest of it. Good evening, again. Jason Olson. I've been the project manager on this for a couple of years now. I wanted to talk a little bit about our GC SAM selection process. It was just a reminder about the process that the team went through to procure our general contractor for this project. It began with a request for qualifications and went out around the end of 2024. A formula of three scoring criteria was published in that RFQ, which included the statement of qualifications, interview, and then the final fee proposal. We had eight general contractors that proposed on the project, which you can see on the screen, and to the right indicates kind of their basis of operations. You can see seven were from the Portland area, and we had none from the Southwest Washington

7:45 area that proposed. A seven-person team independently scored their proposals, of which we shortlisted three firms to move forward to the interview process. Following interviews, each firm was given a second score. All three firms were then given the opportunity to submit a final fee proposal, which included their fee percentage on cost of work plus specified general conditions. Skanska was very aggressive in their pricing for this project, highlighted recent local work in their construction of Mountain View High School for Evergreen Public Schools and emerged from that composite scoring criteria as our selected GCCM, who was unanimously approved by council back in 2025, June of '25. Skanska has provided tremendous value to the team since they came on board and has fully supported and proactively worked to fulfill city values and focus areas of this project. In terms of some of the cost reductions we've done to date, so over the life of the project to date we've targeted cost reductions totaling nearly $30 million.

8:44 During the early phases of design, prior to Skanska even coming on board, the team had identified roughly $17 million in scope reductions through reduced square footage, program reductions, reduced covered parking, reduced equipment budget and identification of scope that could be built later once the service area expanded and funding became available. Since Skanska has come on board and design has progressed, an additional $12 million in value engineering has been identified and executed. New engineering is not a moment in time, but a continual process throughout design with the goal of finding cost savings without impacting operations. This is where the true value of having our contractor on board is really realized. The team has done a remarkable job of collectively proposing areas of cost savings and target value design supported with real market cost estimations, so that's what we don't have early in design, what we have now. We can really go to market and really understand what is the actual cost of these things. So it's proven to show savings across all facets of the project, including our pivot

9:42 back to tilt concrete, reduce site costs, reduce HVAC and electrical costs. In terms of some of the things we're doing for cost management and cost control, we have several tools in our toolbox that we continue to actively use throughout the design process that all work together to ensure we're able to deliver the project to the current approved budget that was highlighted in the May 11, 2026 memo to council. An example of target value design, after our last estimate, we identified glazing, ceilings, wall finishes, things like that, and as areas are removed, 20 to 30 percent of the estimated value. TCF, our architect, was tasked with identifying where to remove that cost. We continue to hold four buckets of contingencies totaling approximately $20 million, which includes escalation to the point of guaranteed maximum price in December. We continue to proactively monitor our risk register, which is an active log of outstanding

10:40 construction activities that could impact project budget. A value is assigned to each of those items with a probability of it becoming a cost item. Every month we review this log with Wiscanska to identify those risk items that are behind us and those that still could potentially impact the project moving forward. We have identified bid alternates for scope the project would like to execute, your pricing come back favorable on bid day, and as I mentioned, value engineering has been an ongoing part of the process. For example, we recently cut 30 percent of the skylights from the project. We worked at Timbuk and found further reductions in our equipment budget. We reduced the number of bays in both our fuel station and our wash bay on site and saved $350,000 by substituting PVC for underslap cast iron for our waste and vent piping. So a little bit in the weeds there, but just to give you a concrete example of how we're actively working to reduce costs on this project.

11:39 Moving forward to competitive bidding. So we outlined in the July memo recently, provided to council all of the bids and contract estimates, amendments I should say, that have been approved and executed to this point. All of the bid packages executed at this point follow state regulations defined in the revised code of Washington. Most bid packages have had multiple bidders, and all but two have come in well under our engineer's estimate. One of which was the pre-engineered metal buildings that we rejected, and that's the point that we switched back to tilt construction. Every contract amendment is reviewed by our legal council as a check and balance to ensure we are complying with state regulations and contract obligations. Skanska has done an excellent job of outreach to our local and disadvantaged contracting communities, providing educational sessions on how to assemble bid packages around how the contracting works on the GCCM process.

12:35 Our own state requirements, I should say, require a 15 percent apprenticeship goal. Skanska currently sits at about 8 percent with the limited scope that's currently under construction and is well on target to exceed our 15 percent goal. Also mentioned in the July memo, Skanska has received bids from and awarded contracts to many of our local subcontractors, including one of our disadvantaged subcontractors to date. Construction status. As you know, we've been under construction on this project site for about nine months now, with a council approved construction value of approximately $15 million. We've completed approximately $5.2 million worth of work, which includes hazardous material removal, construction of one of our large retaining walls on the northeast side of the site, buffered tree planting along our residential neighbors, and removal of all of our unsuitable soils on site.

13:31 So there was a lot of trash and stuff and bad soils that we had to remove. So those are some of the areas also with the highest risk that are now behind us. Currently we're nearly complete with a 195-bore geo-exchange field that lies underneath our main parking lot that is designed to supply heating and cooling to all of our occupied buildings on the campus. Construction of the retaining wall on the northwest side of our site is under construction, along with the beginning of foundations for two of our structures, buildings H and J. That's what the image on this slide indicates, is those are the drill rigs that have been on site for the last couple of months drilling all those holes for our geo-exchange. Through MAC number 6, which was the most current amendment approved by council to the one being voted on tonight, we have another $5.1 million in contracted upcoming construction work, including all the ground improvements that are underneath all of our occupied structures, with that work scheduled to begin this month.

14:27 And then finally, just talking about cost of delay, there will be a significant cost to stop this construction at this point. So the design documents are nearly complete, scheduled for delivery to Skanska at the end of the month, which they will then take to assemble all remaining bid packages and deliver us a guaranteed maximum price by December. And that will be the final amendment that we bring before council that will complete all bidding for the project. In preparation for the recent memo provided to council in this workshop, we asked Skanska to estimate the cost of work stoppage, should this amendment not move forward this evening. That estimate is approximately $700,000 per month, most of which is just escalation by stopping work. So it's our hope that we have provided the information and supporting documentation needed to approve this contract amendment this evening to keep the project moving. So with that, that is the end of our presentation and welcome questions.

15:26 >> Thank you very much. Councillors, comments or questions? Councillor Fox. >> Well, I know I wasn't one of the council members that thought it needed to be delayed at all, but I do appreciate the information that you've put together to provide that full picture. I had asked staff actually since our last meeting just to give me a rundown of the meetings where we've made decisions to find out which council members were present at the meeting because I was trying to understand where the disconnect had perhaps occurred as well. But I do want to say that, you know, I bring to this dais a background in construction. I was a construction estimator and I do very much understand the meanings behind the terminologies of the percent designed that you're at today. And then I'm also glad to see that in 2021, I'd only been on the council for a year at

16:25 the time, but I do remember we had a lot of robust discussion around the role of council and the role of staff moving this project forward so that we could avoid what was then in the charter, pointed out to us that it could be $7 million a year if each year we delay taking action on building this operation center. And so those things are all front of mind when I voted back in 2021 on the project charter. I've also been present at every single one of these decision points that you've pointed out on the slide and I just really do appreciate seeing the level of professionalism that's been brought to us every single time. One of the things that I also wanted to highlight that I appreciated seeing, again, perhaps for those that haven't been here for the last three years, right, or gosh, longer than that, five years, right, has been the savings.

17:19 So knowing as a taxpayer out there, knowing that the work of this team has saved us $29 million is really impressive, especially considering the price escalations as well. So I just wanted to say thank you for putting this together. It's very well done and I will be supporting this moving forward during our meeting tonight. Councilor Perez. Thank you for the information and for coming back with what were some important questions per our taxpayers. And so knowing that this wasn't going to be further delayed that we had today to be able to have a more informed discussion, I appreciate that and thank you very much. Councilor Hollis. Yeah, just gratitude again and it's also my understanding there is no delay. So just being able to come back with these additional information so everybody can feel confident and being able to move forward is greatly appreciated. So thank you for coming back.

18:19 Councilor Henson. Thank you, Mayor. Thank you for bringing this forward. You know, it's a tough one as you're looking at cost escalations and saying, well, what's the limit? And, you know, you definitely don't want to let your number out the door, but it's, we live in an environment right now where we're seeing cost escalations in construction and it's difficult to estimate that. I do fully understand that and appreciate that, but if we weren't asking the questions, who would? So thank you, Mayor. Jean and Jason, thank you so very much. No additional questions or comments. Thank you. Let's move into the development activity update with Patrick.

19:01 Good afternoon, Mayor, City Council. I'm Patrick Quinton. I'm the Director of Economic Prosperity and Housing. I'm joined by Chad Eichen, who's our Community Development Director. We are here as a follow-up to a presentation that we gave in April on development activity for 2025, and so we have follow-up answers to a bunch of questions and then want to continue the conversation on some of the proposed actions. So as you can see from the agenda, we will recap as best as we remember the conversation back in April, and then Chad will present.

20:00 We have tons of data, and we winded it down to four slides to present some comparison with other regional markets and other national markets just to give a sense for how other markets are experiencing the same market conditions. We're also going to follow up on questions about kind of what is our overall strategy and how we prioritizing the actions that we're taking, and then want to talk about some of the work that we've done to date, which I think you've seen before, but then also finish up with some recommendations, particularly around our affordable housing pipeline, and then obviously have time for discussion and questions. So as I mentioned, our notes from the workshop back in April really highlighted these three main topics.

20:57 I know there were some other particular questions that we'll cover later in the presentation as well, but the three major questions that we took away from the workshop were one, what Vancouver is going through in terms of the decline in development activity that we've seen in the past couple of years, and 2025 in particular was a particularly low point. How does that compare with other cities within the Pacific Northwest, and how does it compare nationally? The second question was, and I believe that the term theory of change was used by Councilmember Stober, who's not here, but it was kind of what is the -- how do the actions you're taking lead to the type of outcomes that we're looking for, and so we've tried to structure some information around that, and then leading from that is then, okay, if that's our strategy,

21:56 what are the highest priority actions that we are taking as a city and why? So that's how we've approached this follow-up presentation. If there are other issues that we don't address, we hopefully will leave time for that at the end to answer those as well. So with that, I'm going to turn it over to Chad. >> Yeah. Thanks, Patrick. Diving right into -- oh, thanks -- diving into some of the data-rich slides. In April, Council had asked for data that compares the housing permitting trends we're seeing in Vancouver with other cities in the region and nationally. This slide shows how Vancouver stacks up against other cities in the Pacific Northwest regarding the number of multifamily residential building permits as a percent of existing housing stock, which allows for an apples-to-apples comparison rather than simply reporting out on the number

22:53 of permits or the number of units. We looked at permitting activity year over year going back to 2019. Vancouver's permit activity relative to existing housing is represented by the far left column, and then going left to right are Portland, Vancouver-Hillsboro, Spokane, Spokane Valley, Seattle-Tacoma-Bellevue, and the far right column is Olympia-Lacy-Tumwater region. Until 2025, Vancouver outperformed housing production relative to its current housing stock compared to all other Pacific Northwest cities. Vancouver's strong performance, even through the pandemic, was heavily influenced by residential development at the waterfront and the downtown. Even though we have observed a slowdown in multifamily permits, starting in late 2024,

23:49 Vancouver's housing production still outperformed both the Portland and Seattle regions as a percent of existing housing stock in 2025. This slide compares housing production to population growth for the same areas in the Pacific Northwest as the previous slide. In other words, by what percent is the housing stock growing compared to the population? On this chart, the higher the number on the left-hand side, the better it is for meeting our housing goals and accommodating future population growth, which also creates downward pressure on rent growth. What we're seeing here is that in Vancouver, Seattle, and Portland areas, which are the top three lines, housing stock has increased three to five percent more than the population has increased since 2019.

24:47 In 2025, housing production fell in Vancouver. We saw this clearly in our permitting numbers, which is causing a slight dip. We're hoping that will start to trend back up. Spokane and Olympia housing markets, which are the bottom two lines, are producing housing at about the same rate as their population has been increasing. So they're really not gaining any ground more than their population has been increasing. The main takeaway here is that while Vancouver is tracking with Portland and Seattle markets to meet our housing goals under GMA, address the current deficit in housing units, and begin to see rents stabilize, we would want to see the housing stock increase six to eight percent more than the population for this time period.

25:43 Now looking at some national comparisons, basically takes the same housing permit data that was in the first chart. It compares housing permit data versus existing housing stock, but on a national scale. We looked at four other metro areas and compared their performance with Vancouver's. The real standout here is Austin. It's the taller green column. Has outperformed most cities in terms of housing production and has seen a corresponding decrease in their cost of housing. Austin and Phoenix, Phoenix is the yellow column, continue to see a high percentage of residential building permits compared to existing housing stock. Both cities have adopted or maintained development friendly zoning such as small lots, low minimum

26:40 parking requirements, et cetera, and have less stringent state building code requirements than Washington state and have more available land to develop. All of those are contributing to some of the performance we're seeing from those two regions. San Francisco, which is the orange column, has had the lowest permit activity as a percentage of existing housing stock of the five areas. Possible reasons are land and construction costs are prohibitive and land is not as readily available as it is in Phoenix or Austin, plus the regulatory environment is much more restrictive. Vancouver and Denver fall somewhere in the middle of the pack to meet our housing goals and the comprehensive plan by 2040 and address the existing housing shortage. We would want to see the number of residential permits be more than about three and a half

27:39 percent of the existing housing stock. Taking a look at the Vancouver versus the same four metropolitan areas, this shows the difference between the percent of housing growth to the percent of population growth. Austin, which is the top trend line, is outperforming the four other areas with housing increasing 14 percent more than their population is increasing. Since 2015, Austin has added 120,000 new units, which represents about a 30 percent increase in their overall housing stock. Phoenix and Colorado, the next two trend lines down, are adding housing at about four to six percent more than the population is growing. When compared nationally, Vancouver is currently falling short on production relative to population growth.

28:38 Drastic overproduction is needed to have a meaningful impact on housing affordability, and we have a slide later in the presentation that talks more about some of the things that we're implementing to promote increased housing production. >> Thank you, Chad. >> Thanks, Chad. So now I want to move into the part of the agenda that's talking about our theory of change or kind of what's our strategy for trying to address some of the market conditions. And once again, there's a lot of different variables that go into why housing gets built or how housing gets built, and so one of the things we chose to do here was to demonstrate visually the different cost factors, different cost variables.

29:31 And so as you can see, the main drivers of the cost of production really are in this kind of the blue squares here, but just the hard construction costs. That's the cost of lumber, the cost of materials, whatever goes in there, cost of labor. So that's the biggest driver of cost where projects need to actually build parking. Parking is a significant cost as well, both in terms of land as well as the cost to construct whatever type of facility. And then you have things like site prep and whatnot in the hard cost category. And then the next big category is land and soft cost. Soft costs are all the predevelopment, architectural, engineering, due diligence, those costs. They actually amount to a significant part of the overall development pro forma, but

30:27 certainly a lot less than what we can see on the hard cost side. And then land, which can vary a lot, but land generally is a smaller percentage. And then in the lower corner, you have the remaining cost, financing, fees, profit, and you can see that collectively those account for about 10 percent of overall project cost. So this is trying to take what we see in pro forma as kind of what the developers look at and try and make the numbers work and show that in visual form as kind of these are the different levers that we have to pull. If we then flip those into the next chart, which shows then a rate and a matrix, the bottom axis really is the degree of city control, meaning these are things that we actually have control over, and on the Y axis going up, things that actually have an impact on

31:23 housing production, the area that we're most focused on is in the upper right quadrant of this. These are things that we control and that we think have a significant impact on housing production, so things like land use and we'll talk a little bit later in the presentation on the comp plan, which you know all about, but the comp plan really is the foundation for our efforts to improve housing supply. So land use plays a big role in the value of land and how you can maximize production from land. Direct investment, things like our affordable housing fund and other dollars that we can put directly into projects, that lowers financing costs. Land costs, so when we can put land into a project, we can lower the cost of land for a project. If we remove parking minimums, that removes that.

32:20 Things like multifamily tax exemption, other ways that we reduce the tax burden, that reduces the amount that needs to be financed. And then when we can make material changes in our building code, that reduces the cost of construction, and so we'll talk in a little bit about changes that we've made in terms of six-story wood frame construction requirements and single stairwell. That's really the sweet spot for us in terms of things that we control, and we've color-coded those on the right so that they correspond to the previous chart in terms of those buckets, but most of what we control sits in the orange and gray, the things that are not in the hard cost side of things. What we really don't control are the things you see in the upper left part of the matrix. These are the real drivers of what happens in the housing market, and so unfortunately we are oftentimes not really in control of the broader forces, but you can see interest

33:17 rates, cost of materials, cost of labor, building codes, energy codes that are at the state level or outside of our control market conditions. Those are all things that we don't control, and so we really can't spend much time focusing on those. We try and focus on the things that are within our control. And then the last thing I'll highlight is just I don't want to understate the importance of the work that we do in keeping fees to a minimum or reducing permit times which affect the cost of financing because it shortens project time or ways that we can help with site due diligence if it's sites that we control. Those do have an impact, but as you can see from the previous chart, they really are a small percentage of the overall cost of projects. And so before we get into our actions, we just wanted to highlight some case studies.

34:15 So part of the last two slides are really conceptual, talking about how theoretically you can impact the housing markets. And so we thought we would bring forth some examples, and Chad's already talked a lot about Austin, but Austin and Minneapolis are really, if you go online and search and the literature that we see a lot of, they're the two markets that are called out most frequently in terms of policy leading to positive outcomes in the housing market. And so as Chad mentioned, Austin made a number of significant policy changes mainly on the land use side, so up zoning land, particularly in commercial corridors, reducing parking minimums, but also adding significant density bonuses for affordable housing, and the timing

35:13 of that was perfect in terms of Austin's kind of job growth, and so they attracted a lot of new investment, a lot of new residents, and had explosive growth and significant new housing production. Austin has had the most noticeable drop in rents in the United States, in any big market in the United States. So like the case study that people look at when they say if you build enough supply, you actually can materially impact rents, and you saw from the graph that Chad showed you that their housing production significantly outpaced their population growth, and that's the level of production you need to get to to really have that kind of impact. I do want to say that Austin has this interesting mix of progressive policies, land use policies,

36:06 other development policies, and kind of the Texas land use framework, which provides a lot of open land for development, so those conditions may be unique to a place like Austin. Minneapolis was the other place that shows up a lot, and Minneapolis was one of the first big cities to do the kind of systematic up zoning that we just did with our comp plan, so they were one of the first big cities to up zone all their single family property, allow for multifamily development through much of the city, and then as you can see on the slide, they addressed a number of the other similar things around parking minimums and building heights and up zoning on commercial corridors. So Minneapolis didn't have the same kind of explosive growth that you saw in Austin, but they had a noticeable impact on their housing costs and rents, and statistically relevant

37:06 in this case, they slowed rent growth and slowed the cost of housing compared to other areas in the Midwest, and they've documented a reduction in homelessness. So definitely a place that people look to a lot and say, "This is the impact of policy." I really want to point out, though, the dates are in here for a reason. This took, Minneapolis has played out over a decade, and now they're 15 years into it. Austin's played out over a decade, and then the new example, the last example, New Rochelle, which is a much smaller scale example, so unfortunately, these things do take time, and the massive change in our land use system is early enough that we do have to have some patience in terms of seeing the type of growth that these other markets have experienced. New Rochelle is a different kind of example. It's more of a redevelopment example.

38:05 They were very proactive with very concentrated ownership of land near a very significant transit station that fed into New York City, and they saw significant new development there and slowed rent growth and also attracted a lot of new residents and actually increased the diversity of the city as a result. So a different kind of example, but a toolbox that we also have as well with our redevelopment tools. So you have seen this slide before, and it's always just like to remind everybody that we've been taking a series of actions in recent years to try and address the decline in housing production, and I just want to, as I show this slide, I just want to remind, kind of tie it back to the previous slide, so the actions we've taken, multifamily tax exemption

39:01 directly addresses the tax part of that pro forma, which reduces financing costs, system development charges, impact fees, delaying that, it also directly impacts financing costs, reducing development review times, once again reduces financing costs, and then our work on the single stairwell code, the six story wood frame construction, those are direct changes in our local building code that will produce savings on the construction side. We haven't had projects yet, but we've been told by our development partners that they do see those as producing cost savings. And then lastly, but certainly once again, this is the foundation is the adoption of the comprehensive plan is, in the next slide, Chad, I'll walk you through that, is really the most significant action we have taken in, you know, the past probably decade in

39:58 terms of trying to encourage new housing production. >> Yeah, great segue. So some measures that are related to the comp plan that we've implemented now, the comp plan has, is officially adopted, the comment period ended, the new development code is on the books, it is in effect, as of today, actually. So we, through the comp plan, council removed parking minimums, that's a huge benefit to reducing costs in new development, as you know, we allow more housing as of right, there are no longer density maximums, it's the building height and setbacks that control what the

40:55 density can be on a particular lot. Also up to six units can be developed on a single family lot. So opened up much more land for development opportunity. We're also working on calibrating our infrastructure requirements for middle housing. As you can imagine, adding six units where the system may be contemplated, one unit will have some knock on effects on the system, and so we're working with our public works department to figure out exactly what those infrastructure requirements need to be. Under state law, we can't treat middle housing differently than single family housing. So we're trying to thread a needle there and make sure that the systems can handle the

41:53 housing that will be coming. We're also establishing dedicated permitting and review team for middle housing. That'll be the same team that handles all of these projects. So they're going to gain the expertise in dealing with these unique lots and new types of development to make sure the process goes smoothly. As you know, we're working on changes to our impact fee structure, state laws now requiring us to base impact fees on the number of bedrooms as opposed to just the units, the number of units. And also we're promoting preapproved plans through our master program.

42:46 We're taking a program that has existed for a number of years, which is developers operating in the same subdivision could take the same housing plan and apply it to another lot. They get a reduced permit fee for that, and then they don't have to have the expense of redesigning those home plans. We're taking that program, which has been very successful, and expanding it citywide. So now any permit that is a home permit that's approved or middle housing permit that's approved, that developer, that applicant can take that same housing plan, take it outside of, doesn't have to be in the same subdivision, they can go anywhere in the city, so long as the site

43:39 conditions are similar, they can use that set of plans without having to go through a full permit review. So it expedites the permit process, and it's now able to be used citywide. We had some discussion at the last workshop for the preapproved plans for like ADUs. We did a fair amount of research looking at other jurisdictions, trying to understand the benefits of that type of program. There are risks with that, and so we've decided that we want to try this master same as program. We think there will be much more uptake in the use of that. And I can go into some of the details on the preapproved plans if you want.

44:36 Also we're exploring middle housing home ownership and production strategies. The ability to divide existing lots into much smaller lots that maybe have an ADU on them creates a home ownership opportunity for someone who only wants to live in that smaller unit. So the much more home ownership opportunities through that process. >> Okay, thanks, Chad. So that still leaves us with a stalled pipeline with our affordable housing project. So the market conditions that we're trying to address for market rate development and workforce development have left -- have spilled over into the affordable housing sector with

45:36 rising costs, driving up the cost of projects and then limited state and federal funds to help close those gaps. So we have a pipeline of about eight existing projects with 630 units in this zero to 60% AMI or area median income range that cannot move forward without additional funds. And this is the existing pipeline right now. We expect to have future projects coming into the pipeline. We know developers who are out there, nonprofit developers, other developers, VHA are working on future projects. So the pipeline will continue to grow. And because the projects are stalled, the dollars that we have committed from the affordable housing fund are not going out.

46:32 So we have roughly $16 million of committed but unspent affordable housing fund money that is dedicated to those eight projects and we don't have control over these projects moving forward unless we have additional funds to put in those projects, meaning if the state doesn't award their funds or they don't find other funds to close the gap, we are unable to put our dollars to work. And then that's -- and then there's also the whole separate workforce housing piece of it which needs assistance to move some of those projects forward and that's really some of our other tools that we have but our use of land is also something that can help move those projects forward. And then we're also expecting to have some new projects to provide affordable homeownership

47:30 opportunities particularly in the heights, projects at a scale that we haven't really funded in the past and those will need additional dollars as well. And so when we presented last time, we brought up what's on the screen right now which is some proposed immediate actions mainly with regard to the affordable housing fund that we're bringing back to you and would like to have a discussion about but before I walk through this, I just want to in terms of process, today we're bringing these up and for discussion next week at the workshop time there will be an actual affordable housing fund workshop presentation that will go into each of these proposals in depth. So you'll basically have two opportunities to talk through those. So if you have questions, you can bring them up now and then we'll be able to respond.

48:28 And then depending on your willingness to consider these changes, we would then come back later in the month because there is a certain timeline to this with the actual changes to the affordable housing fund guidelines for you to take action on and then that leads us into September where we -- applications for state funding for next year are due and so we would want to update our awards to those projects if there is support here to increase our award amounts. So that's a process. Just want to give you -- we have multiple opportunities to have the conversation about these items here but the first one which we brought up last time was to establish a pre-development loan fund. We have projects that have a difficult time getting off the ground and they need money for pre-development.

49:25 We have the means to do this through our affordable housing fund with funds that through interest income we have and other undispersed funds that would then be repaid when the projects close so the money would be outstanding for a short period of time so it's not something that would compete with our direct investment in projects. The affordable housing fund guidelines do not allow for that or the administrative plan so we would need council action on that if you're supportive of that. The second one is right now the affordable housing fund plan limits our investment in projects to -- it varies by unit size but basically 75,000 per unit. If it's a studio it's 50, if it's two or three bedrooms it's 100 but on average it's 75,000 per unit.

50:22 That is at zero or 50% AMI. So even if a project needs more money and we have the money available, we're capped at that amount and obviously the logic behind that was to leverage our money as much as possible with money from other sources. That amount hasn't changed since the inception of the fund since in 2016. It's been -- the per unit amount was added but the 75,000 is really a decade old number so we would like to talk about the ability to increase that amount and use it to close some of the gaps we're seeing in these projects. The third change is that we are sitting on unused affordable housing fund money because

51:18 the fact that these projects are stalled is also preventing us from using the rental assistance money that we have in our affordable housing fund. People who are in shelters and are ready to move out and we have rental assistance to help them move into permanent housing, they don't have units to go into. So the lack of new affordable units is not only stalling our investments in those projects but it's also preventing us from dispersing rental assistance funds as well. So there's a backlog in those funds but we have unused money from that bucket that we would like to deploy into these projects. The fourth action is a new request but it's -- we now have our first payments into the fee in lieu fund that was established for the multifamily tax exemption program.

52:13 So if you recall when the multifamily tax exemption program was updated a few years ago we added a fee in lieu for market rate projects and so the first projects that came in under that they now have finished construction and they received their certificate of occupancy so now they have paid into the fund. So our first payment came in earlier this year and we're expecting our second payment this fall. So by the end of the year we should have about $2.9 million in the fee in lieu fund that we would like to use to close these project gaps we're talking about. That request would come to you as part of a specific project authorization. And then the last item on this list is really with respect to how we utilize our land in

53:08 affordable housing transactions we would like to have in many cases it's not just affordable housing projects need to have land significantly discounted, it's the workforce projects need them to pencil as well and so land is one of the more flexible tools that we have to make an investment in a project and to date we've utilized it as a sliding scale based on affordability under a ground lease and we'd like a little bit more flexibility to in some cases just donate the land into the project instead of tying the project with a ground lease payment in perpetuity which makes the project harder to pencil. So once again that would be a proposal we would bring those to you on a deal specific basis as well.

54:02 So I know that I did that's a lot of content there and happy to now go into discussion but I just want to once again say we will come back with a specific presentation next Monday that will provide the details on the changes to the affordable housing fund that we're requesting so that you can look at them in more detail. So with that, happy to take any questions and feedback. >> Councillors, Councillor Perez. >> I am so excited to hear about the pre-approved plans and the exploration of homeownership production strategies, you mentioned risks that there are some risks with those pre-approved plans. Can you talk a little bit about that and then share what strategies are in place to let the public know about these opportunities?

55:02 >> Absolutely. Absolutely. I may have misspoke, I wasn't speaking about risks in regard to the same as plans, I was talking about the pre-approved ADU plans. So quick discussion about the differences, as I was saying, the same as plans, they're plans that the builder has already run through our system, they've gotten approval, as long as the site conditions are similar, there's really no reason to make them go through that review process so they can now use those same plans at a 50% permit fee on any other property

55:57 in the city where the zoning allows it. What we were talking about at April was the pre-approved ADU plans. Some jurisdictions have worked with architects and decided that they would have anywhere from like two to five or six ADU plans that anyone can come and say I want to use that model on my property. But what some of the risks, and this is when I was talking about risks, it was about that program, is the city would in pretty much every case we looked at, the city would buy the plans from the architect and so then there are the city's plans that anyone can use.

56:54 There's a cost to that, upfront cost of anywhere from 50 to 100,000 per home type. But the risk is that if something goes wrong, then they're looking to us as the owner of those plans too instead of looking to the designer. Also every time there's a new code cycle, those plans would have to be updated to comply with the updated building codes. And so there are some potential ongoing costs that the city would have. So that's really what I was talking about. I like the list that you have for proposed immediate actions.

57:47 And I had a question about your comment about possibly donating land, the city donating land. Would that be into community land trusts? It could be. It's really project specific. So like the project here inside of city hall, that land was essentially donated to the project. So they own that piece of property and I think it was a dollar. So it's more that, just so that the project isn't carrying any ongoing costs with land. And it's really thinking about it even beyond 60% AMI projects. But I will say for the heights, just to give you a preview of when we come to you hopefully in the fall with the terms of our proposed homeownership project with Palish, we will

58:43 likely be proposing donating the land and it would be, and I know they're looking at either community land trust structure or shared appreciation structure. So yes, it would be a useful tool for homeownership as well. My last comment, you mentioned $75,000 on average per unit. Is that per unit to close the gap that we currently have right now? So that's our maximum investment amount. So regardless of what the project costs are, so typically like we're seeing projects that cost anywhere of $350,000 to more than $500,000 per unit, but we'll just stop at $500,000 per unit. So what we're saying is we only contribute $75,000 per unit. And we don't invest in every unit. We only invest in the units that qualify at 50% AMI or less. So once again, the project next door is a good example.

59:41 I think we have fewer than half of the units in that building are at 50% AMI. So we put money and fewer than half of the units. The other half of the units are I think 60% AMI, so they're financed through other means. But when a project -- when we set the $75,000 per unit number, housing costs per unit were probably $200,000 per unit or maybe $225,000 or $250,000. So very different cost environment than where we are now. And ideally I would love leverage. I would love as much other money in the project, but it's not only have costs gone up, but we're not seeing any other funding source increase their funding amounts either to close the gap. >> And that's your comment about changing that amount since it was established in 2016, which I am in support of. >> Yeah. Thank you.

1:00:40 >> Thank you. >> Councilor Fox. >> Yeah. Just a few comments. One is I guess comparing our permitting and our development kind of culture in the state of Washington with Texas is kind of hard sell for me given that they don't have anything comparable when it comes to comprehensive land use planning, but I'm listening when you say Arizona, Colorado, okay, and where I sit when my other job have actually worked quite a bit with Colorado recently, so it's been kind of an interesting conversation moving forward. But with that said, I was noticing on slide 8 the fees, you know, the part that is within our control, you know, looks like really only about 10% and then maybe some, you know, little

1:01:36 percentage of the big blue box, and it is interesting, and maybe this isn't really for you to maybe to confirm, but, you know, we only have about 4% in this total cost that we have any control of as a city, and we need some of those fees. We can't just waive them all, otherwise we wouldn't have staff and things like that to actually ensure health, life, safety happens in these buildings. I just kind of want to put that out there as we're trying to tighten our belts even more here, but my question is kind of focusing on that, mentioned that the ADU plans, Commerce, we just finished the permit-ready plan database that has 18 communities in the state of Washington that have contributed their pre-approved plans or permit-ready plans to that database.

1:02:30 Vancouver isn't one of them, but they also have said that there's like offered multiple different ways for cities to implement such a plan, and one of them, several of them are not the city has to own the plan, so I'm just maybe pointing out that staff, I know you've had conversations, that's not my team, I feel like I always have to caveat this, but I'm aware of what the other teams in my unit are doing. I know you guys have been talking to that team, but I guess I'd encourage them. I failed to mention that, so I apologize for that, but yes, the state is working on statewide pre-approved plans, and they've selected seven town home designs that they plan to create permit-ready designs for statewide use, so we can also take advantage of that here in Vancouver, so we're continuing to track it. Okay, yeah, I think it's kind of exciting, actually.

1:03:29 I think that's a pretty neat program, and it seems like more jurisdictions keep expressing interest in it, so another way for us to lower costs, but my question is if you had another slide about the profit level for the affordable housing projects, and you noted that kind of 3%, oh, it's right on the same slide, 3% is kind of the profit margin for affordable housing projects or all housing projects? This is for all housing projects, and kind of a generic pro forma, but you could remove that. As a developer, there's always a developer fee in a project, and then the return level return expectation for a market rate project versus an affordable is different, and so

1:04:27 you would have that savings on affordable projects, so that number could potentially be lower, but it wouldn't be much. There's still a developer fee. I was hoping you were going to say that was just for affordable housing and that there's a higher expectation at market level, so that's an interesting piece of information. I think people think that there's a lot of excess profit in this, but it's a pretty standard formula. I know it wasn't huge, but I thought it was higher, so all right. Thank you. Councilor Paulson? Thank you, Mayor. Councilor Paulson speaking. Thank you, Chad and Patrick, for the update. It's a great ongoing conversation, and I appreciate the updates on our thought direction as well as looking forward to the workshop next week. I want to dive a little bit more into this idea of master same as.

1:05:26 It seems to me, based on the way that you described ownership of plans, that that would really just be the same developer using the plan. It wouldn't be available to any other developer based on the ownership of the plan. Isn't that right? It's beneficial to that developer, but it's not as beneficial as a set of plans that's on the shelf that anybody can take advantage of, which is a little bit more like this concept of an ADU plan library or the state townhome and other plan library that we've also talked about. Yes. Right. The developer would own the plans. They would have to update them with each code cycle. They would it would be in their interest to market those plans. And they could be marketing ADU plans or townhomes. And I just realized I didn't answer your second question, Councilor Perez, but it's related.

1:06:25 We are working on a marketing strategy for the city to promote this program. The master same as program. Yeah, master same as. There's going to be another question that I had as well. I remain interested, and it sounds like based on Councilor Mayor Pro Tem Fox's description that there are ongoing efforts at multiple levels of government to create these libraries that more people can take advantage of. I do think that that's a key piece of the equation going forward where more and more people. And I understand that there could be some upfront cost as well as some potential ongoing cost as building codes change and plans need to be updated. But at the same time, looking at the possible number of times that plan might be used over a period of time between building code updates and amortizing it over those numbers of plans and thinking about the acceleration of production of housing, the ease of the process for a

1:07:22 person who might be intimidated by the process. I do think that that kind of investment is worth considering, especially because we're talking about other kinds of investment, gifts of land, other kinds of things. And so I would encourage you to continue looking at those and not be so quick to rule them out based on the risk that you've outlined so far. And then the only other thing that's on my mind is just thinking about the totality of your presentation. You know, you started off by talking about how do we compare and what's our theory of change and then outline some different action steps. And appreciate the way that we've prioritized the upper right quadrant, you know, bang for your buck types of investments. But looking at some of those other longer term charts, it also occurs to me that although it's low control, low influence, a big part of this downturn is related to economic and

1:08:17 in particular rate environment situation that's going on right now, which ultimately gets to the time value of money. And when talking with folks who do this kind of thing for a living, that's a much bigger deal now than it was a year ago, two years ago, three years ago. And so what that means is that it's incumbent upon us as policymakers to, number one, make sure that the regulatory environment remains as stable as possible so that there's predictability there, but also that we are as vigilant as we can be in shortening timeframes, processes that are within our control because each amount of time that passes by is more interest being charged at a higher interest rate, as well as always looking at the costs of the things that we do. And I'm wondering, and this is a suggestion, you know, we've had one or two instances where

1:09:13 we've looked at and examined and changed the time at which certain fees are charged. And I'm wondering if there are other opportunities like that where we could defer the payment to a later point in the process. I don't know the answer to the question, and it might be no, but it occurs to me, especially at this moment where time value of money is so significant, anything that we can move by any period of time is savings to the developer and would speed up the process and produce more housing. And so I just think that's something that's worth taking a closer look at, and I'd love to hear more about what opportunities might be available there. We do allow for deferral of impact fees now. So for middle housing, some multifamily housing, and SDCs. So those are, rather than being paid at the time of the building permit, they're paid at the time of occupancy.

1:10:08 So that can be 18 months plus of time savings, that they're not paying interest on those loans. Right. And the last thing, just because I think we made it official last week, this whole we're not collecting fees in the Evergreen School District. At our subsequent workshop, I'd love to see if we have preliminary data on whether that's creating a change in production in the Evergreen District of Vancouver versus the Vancouver District of Vancouver. It's an interesting, unintended but interesting experiment in just how much impact fees or lack thereof impact housing production. Yeah. I'd like to sort the words out broadly, but I think once it gets out there in the development community, we'll be tracking to see if there is a bump in activity there. Yeah. Thank you. Councilor Hanson. Thank you, Mayor, just real quick.

1:11:02 We have 680 sitting in the pipeline, and that's from 2026, correct? Those weren't rollovers from 25, because it's usually they're sitting in permitting. No, these are projects that they're not in permitting. These are projects that have applied for affordable housing fund money, have been applied and awarded affordable housing money and have applied for state money already. So they can't get into permitting until they get their financing. So we track the affordable housing pipeline separately. It's not in the development review system yet. I mean, they may be early, may be pre-app or something, but this is the affordable housing fund pipeline is what we're talking about. We produced this list for the mayor, and I forget, but people from the Department of Commerce came to Vancouver a couple of weeks ago when we produced this list for them.

1:12:00 That's what this is. We showed them these are all the projects that have applied to you and you haven't funded, and this is the number. Okay. So how's the pipeline looking? The pipeline itself, the development pipeline is looking better. I think Chad can give you that name. We definitely went down at the third quarter of 2024. It's been sort of a steady rebuild in 2025, but our 2025 numbers were down from, sorry, were up from 2024. We're at the midpoint here of 2026. If we just doubled what we've gotten in for the year, we'd be at about 504 units. You're talking about multifamily only? Yeah. So 2026, 500 some units. As of today, I think you all -- These are received. Okay. But this is a permit.

1:12:56 So permit activity as of today, we have almost 900 units through July, so through seven months. So we're definitely trending above last year and 2024 as well. So this is actual permitted units. Yeah. And then you have the pipeline stuff. The pipeline, yeah. So how many do we have as of right now for '26? Permitted units is 882 units. 882 units. And what did we do last year for 2025? 448. Okay. And it shows why I think you guys, this whole process is desperately needed. I really applaud and appreciate your efforts. It's just good, thank you for letting me know where we're at. So we're doubling and we're just halfway through the year. We'll double as a fraction of what we need. Yeah. Yes. Councilor Stover. Thank you, Mayor.

1:13:54 Councilor Stover, thank you to both of you. Number one, applaud that we're being proactive here. If we're ever going to get out of this, that's the constant state we've got to be in as proactivity. So I really appreciate all this work and all this thought process that you're putting in. I also very much appreciate your talking theories of change and do encourage that that theory is really laid out on paper in a way that we can be clearly measuring the steps we're taking and are those steps achieving so that we can make adaptations as we go along. The thing that stood out to me, Austin kind of went through what Portland did 10, 15 years

1:14:53 ago, became the hot place. And what I saw in the overall was this return to norm. So they're dealing with these underlying structural issues just as we are. So I agree that there is a different development environment, but I also understand they were the it place. And so money was just flowing there. This afternoon, I was on a housing call with Association of Washington Cities. And the conversation we're having tonight is happening in cities throughout the state.

1:15:49 And so we have a lot of compatriots talking about these same exact things. From a statewide standpoint, some asks probably that are going to happen next legislative session is continued investment in the CHIPS program. Don't ask me what the CHIPS program stands for. But it is a housing fund. And then infrastructure. It's a really successful program. It's an important program. So we hope to see more CHIP money. And then is there a potential -- or recognizing that there is this underlying need that markets,

1:16:44 the financial markets come and go, and we need more stability in financing in Washington State. And so is there some kind of ask to the state? I think it's been around for a long time of the state having financing tools that can help in these times when the overall market tightens up, because it is -- in my opinion, it's not just that the rates are higher, but money isn't flowing there, because higher rates should attract money there, but people aren't able to even access money. So the money is getting locked up. So being able -- all these different ideas that you have of how can we help unlock money

1:17:44 to help the market I think is great. So I'm excited to hear more next week and continue these things forward. Thank you. >> Councillor Harliss. >> Yeah. A very quick question, and then some comments on slide nine. Site due diligence. Quickly, what is that definition? >> It's the work you do prior to either site acquisition or development, like geotechnical environmental review, things like that, to just determine if the site, you know, is suitable for development and if you have to address any other issues on site. So if we own a piece of property, the reason why I put it in that quadrant is if we own a piece of property, like the heights, we've done all the due diligence on that. We've done the geotechnical work. We know the environmental condition. We can deliver that to a developer and it's up to them, but they don't have to redo that work and pay for that. >> Thank you for that.

1:18:44 >> Yep. >> Yeah. A couple -- thank you for sharing about the per unit. I was surprised to hear that it's not in some way like CPI, you know, adjusted, definitely interested in taking a look at that so we can fix that. And agree with some of the statements that have already been made, definitely wanting to lean towards more home ownership options, which sounds like you're going to come back with soon, you know, because a lot of this, especially with the affordable housing fund, that is the voters, the taxpayers that have said yes to supporting their neighbors, and it's about, you know, doing our due diligence in a sense, this public monies that is going back to the people and not just profits. And so definitely interested, but also understanding that it's those private public partnerships that need to be had in order to have this housing be built. Definitely interested in those land trust options that have already been talked about

1:19:41 and also agree with Councilor Paulson that I look forward to hearing about additional options about deferring to kind of help with that initial block or barrier that can exist when it comes to having the initial capital, so the more we can defer what we need out of a project, the more it can help with just kick-starting the project to get going. But that's, yeah, that's mostly it. No real additional things that haven't already been brought up, other than to reiterate that, you know, thank you for looking at all the different angles we can go at, and definitely interested in using that 16 million that's been committed, because the more it just sits there, it's not doing anything, and it's not housing anybody. So thank you. All right. That concludes any comments from the Council. Next steps, Patrick or Chad? So next steps are primarily around the Affordable Housing Fund action.

1:20:41 So like I said, you'll have another full workshop on this specific topic next week with a lot of detail on per-unit recommendations, things like that, and then there will be a series of actions that then come through the remainder of the month related to changing the Affordable Housing Fund administrative plan, and then you'll see all the projects that are slated to receive Affordable Housing Fund awards come before you, before they then have to apply to the state in September. So it will be a busy Affordable Housing Fund month. Great. See you next week. Thank you so much. Councillors, we're going into executive session concerning pending or potential litigation RCW 42.30.110, subsection 1, paragraph I, sub paragraph 3. It is 21 after. Let's start at 5.30 please. Thank you. We'll be back for our 6.30 regular Council meeting. Thank you.