Land Use Study Commission

1996 Annual Report

January 14, 1997

I. Introduction

A. Progress to date

The Growth Management Act was originally passed by the Legislature in 1990. Prior to that, cities and counties could adopt comprehensive plans, but were not required to do so. Zoning decisions made by local governments were not required to be consistent with the plans that were adopted. The Growth Management Act (GMA) changed this practice for the more populous and faster growing counties and cities in the state.

Over 155 cites and counties have now adopted comprehensive plans under the GMA¹. Many of these jurisdictions have seen improved communication among their staff offices, as well as better communication and coordination with neighboring jurisdictions and citizens from the GMA planning process.² Some of these cities and counties are starting to see some of the fiscal and quality of life benefits that the Legislature expected from having adopted GMA plans and regulations.³

Although the GMA may have been successful in some ways, some jurisdictions have had difficulties developing plans and development regulations that are both acceptable to the community and that comply with the GMA, as determined by the Growth Management Hearings Boards (Boards) and the courts.⁴

One can attribute some of these difficulties to growing pains. The GMA is still in its formative stages. As counties and cites have begun implementing the GMA, some shortcomings in the GMA have been identified. Many of those involved in the debates over the GMA in the early 1990s recognize that some important decisions were not made as part of the legislation. As a consequence, the statute included language sufficiently ambiguous that each interest group could find sufficient comfort to agree that the overall process should go forward. This has made it difficult for local governments, the public, and the Boards to understand and come to a common understanding of what the GMA means in some of its key concepts. It has also placed the Boards in a difficult position as they attempt to interpret the statute.

Some local elected officials have concluded that the Boards are substituting their judgments for those of local elected officials. Some local elected officials have also concluded that the GMA should be repealed, although this is not the official position of either the county or city associations. The Commission does not support repealing the GMA. The Commission does believe that focused amendments to the GMA will answer some of the questions that have plagued both local governments and the Boards trying to implement and interpret the statute. By fine- tuning and clarifying certain aspects of the GMA, the Commission believes a number of implementation issues can be resolved without undermining the Legislature's recognition that the GMA "provides the means to effectively combine certainty for development decisions, reasonable environmental protection, long- range planning for cost-effective infrastructure, and orderly growth and development"⁵. This will require an ongoing effort to achieve the full potential of integrating and consolidating the state’s land use and environmental laws.

B. General Recommendations

1. The Commission has concluded that providing greater certainty in the planning process will reduce the need to rely on the Boards for dispute resolution. This will also enable greater deference to decisions made by local authorities that fall within the GMA framework. For the present, the Commission believes that the Boards are a necessary element in the land use process. The Commission is recommending additions to the GMA that will provide more guidance on appropriate types of growth for rural areas and clarify the relationship between urban growth areas and urban governmental services. The Commission recognizes that there is considerable variability in circumstances around the state and that local governments need considerable flexibility to make the best choices for their communities.
   
2. The Commission has concluded that the GMA should be modified to clarify the range of alternatives available to counties and cities for complying with the goals and requirements of the GMA without undermining the purposes of the GMA to encourage coordination among governments, provide for efficient delivery of public services, create certainty about the location and nature of development, and protect the state’s environment.
   
3. The Commission believes there is a need to increase the incentives for building within urban growth areas and reduce the uncertainty about what type of development is appropriate within rural/urban areas. There is also a need to provide benefits and a competitive advantage in accessing scarce state funds to the local governments that have completed their comprehensive plans and development regulations, thereby positioning themselves to move forward towards more efficient and effective management of the population and economic growth coming to Washington.

II. Land Use Study Commission

A. Statutory Charge

The Land Use Study Commission was established by Ch. 347, Laws of 1995 (ESHB 1724). The 14-member Commission was established with the overall mission to “integrat[e] and consolidat[e]” ... the state’s land use and environmental laws into a single manageable statute.” §801, Ch. 347, L.1995. In addition, the Commission was given a number of additional tasks, including:

The legislation creating the Commission was effective June 1 1995. The Governor announced the appointment of the Commission members on September 28, 1995.

The Legislature has asked the Commission to submit a report to the Governor and the Legislature stating its findings, conclusions and recommendations not later than November 1 of each year. The final report is due by November 1, 1997. The Commission is scheduled to go out of existence on June 30, 1998.

B. Governor’s Request for Additional Study

In March, 1996, Governor Lowry requested the Commission to look at two issues in addition to those included in the Commission’s statutory charge. In his partial veto of SSB 6637, the Governor requested the Commission to look at the dispute resolution process established in the GMA and at “how to establish greater certainty in local growth planning and encourage local planning and actions to comply with the requirements and goals of the Growth Management Act.”

C. Membership

The Commission is made up of 14 members, eleven of whom are appointed by the Governor. The membership represents a cross- section of those interested in land use issues, including business, agriculture, labor, environmental and neighborhood activists, local and state governments, the tribes, and the general public. Three additional members are the directors of the Departments of Ecology, Transportation, and Community, Trade, and Economic Development (DCTED), or their designees. The director of DCTED or his designee is the chair of the Commission. Mike Fitzgerald, Director of DCTED, has appointed land use attorney T. Ryan Durkan of the Seattle law firm Hillis, Clark, Martin & Peterson, as his designee.

Members of the panel appointed by the governor include: Kitsap County Commissioner Phil Best, of Bremerton; Spokane neighborhood activist Sheila Collins; Tom Campbell, Assistant Director of Policy & Program for DCTED; Keith Dearborn, a partner with the Seattle law firm Bogle & Gates; Kathy Dietrich, a Vancouver architect; Loren Dunn, an environmental attorney with the Seattle law firm of Graham & James/Riddell, Williams; Everett Mayor Ed Hansen; John Herrick, a labor activist from Bellevue; David Moseley, Ellensburg City Manager; Kimberly Ordon, a policy analyst for the Natural Resources Department of Tulalip Tribes in Marysville; David Roseberry, a wheat farmer and former President of the Washington Association of Wheat Growers.

Skip Burch, Dept. of Transportation, and Terry Husseman, Deputy Director of the Dept. of Ecology, were appointed by their respective directors to represent their agencies.

D. Meetings

The Commission holds meetings on the second Tuesday of each month.⁶ In addition, the Commission has scheduled a number of special meetings. It held meetings on May 1 and May 2, in Ellensburg and Everett respectively, to hear from members of those communities about their concerns with respect to land use and environmental laws. The Commission also held public meetings on October 22, 24, and 29, and on December 4 to take public comment on its draft report and implementing legislation. Those meetings took place in Spokane, Seattle, Mt. Vernon, Wenatchee, Vancouver, and Olympia.

III. Process

A. Advisory Committees

The Commission created four committees to assist it in its duties. Three of these committees have produced reports or studies. The fourth, the Statutory Review Advisory Committee, has only been recently established, but will likely be the focus of a considerable amount of effort during the upcoming year.

1. Finance Advisory Committee

The Finance Advisory Committee was established to develop, review, and make recommendations for methods to fund an integrated planning and environmental review process. The Legislature included $3 million for grants in the 1995-97 biennium, but asked the Commission to recommend a permanent funding solution.

The Committee made three recommendations to the full Commission for its consideration:

2. Professional Certification Advisory Committee

The Professional Certification Advisory Committee was established to look at ways in which local governments and state agencies could make use of available professional expertise in the permit review process. The Committee concluded that the best approach to achieve the objective of improving both the timeliness and quality of permit decisions would be through a state program of technical assistance to local governments on when and how to seek professional assistance.

3. Permit Monitoring Workgroup

The Commission established the Permit Monitoring Workgroup to look at the issues involved in the local government permit process. The Commission has been asked by the Legislature to report on the effects of the 120 day permit timeline included as part of ESHB 1724. The report is due in November, 1997. The Permit Monitoring Workgroup is developing baseline information to use to assess the impacts of the legislation.

4. Legislative Sounding Board

The Commission established the Legislative Sounding Board as a means to keep key legislators informed of the Commission’s work. Each legislative caucus was invited to appoint two members. The Sounding Board in June and September. Members appointed to the Sounding Board were Senators Mary Margaret Haugen, Karen Fraser, and Dan Swecker and Representatives Pat Scott and Carl Scheuerman.

B. Scoping Document and Public Hearings

In February 1996 the Commission developed a list of questions about issues that it believed could be potential topics for review. It invited a number of different individuals, organizations, and agencies to make a presentation to the Commission and comment on those issues which were most important to that individual or interest. The Commission also held two meetings in early May, to hear from a wide range of public interest, neighborhood, business, and agricultural groups. In addition, the Commission has provided a public comment period at each of its meetings.

From the information and comments provided to the Commission during these public meetings, the Commission developed a list of issues that it believed were of most concern to Washington citizens.

The Commission also developed criteria against which it would measure its recommendations.

IV. Achievement of Growth Management Act Goals

A. Summary of GMA Goals

The statute creating the Land Use Study Commission states that, in fulfilling its responsibilities, the Commission shall evaluate the effectiveness of the Growth Management Act and other state land use, planning, environmental, and permitting statutes and achieving their stated goals. This year, the Commission has focused on the GMA. The GMA sets forth 13 planning goals which can be found in RCW 36.70A.020. The goals are intended to guide the development and adoption of comprehensive plans and development regulations of those counties and cities that are required to, or choose to, plan under the GMA. The goals are not listed in order of priority and are to be used exclusively for the purposes of guiding the development of comprehensive plans and development regulations.

It has been six years since the GMA was adopted. In many cases, it is still too early to evaluate how effective the GMA has been in achieving its stated goals. Nevertheless, the Commission heard many different opinions on whether the GMA is achieving the planning goals of the GMA. Each goal is set forth below, followed by a discussion of the GMA’s effectiveness in achieving the goal.

1. Urban Growth.

“Encourage development in urban areas where adequate public facilities and services exist or can be provided in an efficient manner.”

Comprehensive plans established under the GMA have created urban growth areas within which urban growth is encouraged. On paper, most cities have planned for higher densities; however, there is a concern on the part of some that these densities may not be achieved as planned. The reasons for this include: lack of money for local governments to accommodate the densities planned; potential community resistance to high density residential development; consumer demand for single family housing units; and uncertainty as to whether there are sufficient lands to accommodate urban densities. These concerns have led to proposals that counties and cities conduct a "buildable lands" analysis and take actions based on the information they develop. Another issue is that some areas have incorporated as cities in order to have more control over land use issues, and in some cases, in order to remain “rural.” Examples of recent incorporations include Bainbridge Island, Covington, Maple Valley, and Edgewood. Board decisions have required, as a general rule, densities of at least four to six dwelling units per acre in urban growth areas.⁷ Long-term monitoring will be required in order to assess whether the urban growth goal of the GMA has been met. The Commission is recommending a number of changes in the area of urban lands to increase the odds that this goal can be achieved.

2. Reduce Sprawl.

“Reduce the inappropriate conversion of undeveloped land into sprawling, low density development.”

Many local governments have implemented comprehensive plans that “downzone” the rural areas, and allocate population growth to urban areas. These measures should reduce sprawling, low density development. One issue related to this goal is a lack of agreement as to what constitutes sprawl. The Growth Management Hearings Board has adopted a general rule that densities of less than one dwelling unit per five acre in the rural areas would constitute impermissible sprawl. Many rural areas, however, have an existing land supply of preexisting low density lots. In a free market society, it is not possible to dictate that people must live in the urban area. People may choose to live in the rural area for many reasons such as lifestyle, schools, housing cost, traffic, safety and amenities. Unless the urban growth areas are desirable places to live, it will be difficult to achieve the anti-sprawl goals of the GMA. As discussed under the urban lands goals, long-term monitoring will be required to determine whether the GMA achieves a reduction in sprawl.

3. Transportation.

“Encourage efficient multi-model transportation systems that are based on regional priorities and coordinated with County and City Comprehensive Plans.”

Transportation planning under the GMA has taken place at the local level through comprehensive plan development; at the regional level, through regional transportation planning organizations (RTPOs) that were authorized under the GMA; and at the State level by the Department of Transportation. RTPOs are voluntary organizations that cover all counties except San Juan. Their mission is to coordinate among local jurisdictions, and between local jurisdictions and the state. Some issues that have been raised in transportation planning are:

4. Housing.

“Encourage the availability of affordable housing to all economic segments of the population of this State, promote a variety of residential densities and housing types, and encourage preservation of the existing housing stock.”

Throughout the Commission’s public hearing process, many people were concerned that the GMA will actually work at cross purposes to the affordable housing goal. There are many reasons that contribute to the cost of housing, including: the cost of land, population growth rates, the health of the economy, interest rates, income and employment.⁸ There is a concern by some that, by constraining the available supply of buildable land, housing prices and land prices will rise. Many people already believe that housing in our state is not affordable, and that the GMA will exacerbate the trend toward higher housing prices. However, a study conducted by the Washington State University Center for Real Estate Research concluded that “no definitive answers have emerged” about whether the GMA has made housing less affordable.⁹ Nonetheless, housing affordability continues to be an important issue. A recent study concluded that the Seattle/Bellevue/Everett area ranks slightly below the national average for the number of individuals who own homes.¹⁰ On the other hand, Seattle was named by Fortune Magazine as the most livable city in the United States; affordable rental housing in Southeast King County was cited as one of the factors leading to this selection.¹¹ The monitoring of housing affordability should be a high priority. This was one of the recommendations in the report of Center for Real Estate Research. The Commission recommends that the following measures be taken: local government monitoring of the land supply for a variety of uses, including housing; and DCTED annual reporting on affordable housing and urban densities.

5. Economic Development.

“Encourage economic development throughout the State that is consistent with adopted Comprehensive Plans, promote economic opportunity for all citizens of the State, especially for unemployed and for disadvantaged persons, and encourage growth in areas experiencing insufficient economic growth, all within the capacities of the State’s natural resources, public services, and public facilities.”

The State has had some recent economic development success stories, including the siting of Intel in DuPont, Washington and a semi-conductor facility in Clark County. The presence of appropriately zoned land was an important factor, as was the ability to attract a qualified work force. Still, concerns about economic development remain. One concern is that counties are losing their economic tax base because growth must occur in urban growth areas which are to be governed by cities, as interpreted by the Growth Management Hearings Board. Another concern is that border communities, such as those in Whatcom County, depend on tourist dollars; yet, they do not feel they have the flexibility to provide commercial and industrial areas to accommodate tourist dollars because such growth is not justified by the OFM population projections. Another aspect of this goal is the relationship between our tax structure and land use. For example, if industries receive a tax break, some cities may reassess their land use element to convert industrial zoned land to commercially zoned land because it is more lucrative. DCTED should report annually on how well the economic development goal is being achieved, and make recommendations in the event the goal is being achieved by the GMA.

6. Property Rights.

“Private property shall not be taken for public use without just compensation having been made. The property rights of land owners shall be protected from arbitrary and discriminatory actions.”

To the Commission’s knowledge, no court has found a “taking” of property to have occurred due to the GMA. The attorney general issued guidance for local governments to follow to avoid takings. Nevertheless, there is a perception by some, particularly outside of the Central Puget Sound area, that the GMA has diminished their property rights. Others, however, believe that private property rights need to be protected from incompatible development and unmanaged growth. These people believe that the GMA has enhanced their property values. By adding more flexibility to the GMA, local governments could address individual issues of equity and fairness, as recommended elsewhere in this report.

7. Permits.

“Applications for both state and local government permits should be processed in a timely and fair manner to ensure predictability.”

The Land Use Study Commission is still in the process of monitoring local governments’ implementation of the 120-day time limit for issuance of local government permits, which was established by ESHB 1724. That bill also established the Permit Assistance Center within the Department of Ecology which assists in coordinating state permits at the request of an applicant. Initially, some local governments have complained that the timelines established by ESHB 1724 have lengthened the process to issue permits. This is partly due to the additional notice requirements. The Commission is in the process of surveying local governments. Insufficient information exists at this time to report on this issue.

8. Natural Resource Industries.

“Maintain and enhance natural resource-based industries, including productive timber, agricultural, fisheries industries. Encourage the conservation of productive forest lands and productive agricultural lands, and discourage incompatible uses.”

The GMA’s requirements to designate natural resource lands have largely been accomplished. Some individuals feel that local governments did not go far enough in protecting natural resource- based industries; however, others feel that local governments went too far. On balance, the GMA’s designation system seems to be an appropriate method of accomplishing the natural resource industry’s goal. Over time, however, the designations alone may not be sufficient to maintain natural resource-based industries. This report recommends expanding current use taxation and innovative zoning techniques as additional methods to accomplish this goal. An additional measure that may provide assistance is an amendment to the GMA that would permit conservation future easements to be used as an alternative to transfers of development rights in order to allow farm land to be located within incorporated city limits.

9. Open Space and Recreation.

“Encourage the retention of open space and development of recreational opportunities, conserve fish and wildlife habitat, increase access to natural resource lands and water, and develop parks.”

Most local jurisdictions have identified open space and recreational opportunities; however, a recent bond measure in King County that would have preserved open space and stream protection failed. If voters are not willing to bear the cost of additional open space and habitat protection, it is unclear how effective the GMA will be in increasing the amount of open space, recreational, and habitat opportunities.

10. Environment.

“Protect the environment and enhance the State’s high quality of life, including air and water quality, and the availability of water.”

Most local jurisdictions have enacted critical areas ordinances, which in the long run should achieve the State’s goals of protecting the environment. Many people who testified before the Commission felt strongly that environmental protection is a key to protecting the quality of life that residents enjoy and which attracts new business to our State. The Fortune Magazine article cited the City of Seattle’s air quality as one of the factors making it a desirable area to live. Others testifying before the Commission, however, felt that the environmental goal has been given more weight by the Boards than the other goals, thereby precluding local governments from balancing the goals to reflect regional differences. Another concern relates to the availability of water. The Commission received comments that the failure of population forecasts to recognize the availability of water resources was a major failing of the GMA that should be corrected. The Commission recognizes water availability is an important issue, but it concluded this would require a study that is beyond the scope of the Commission’s resources. The Commission has included in its recommendations for clarifying the rural element a provisions to protect surface and groundwater resources.

11. Citizen Participation and Coordination.

“Encourage the involvement of citizens in the planning process and ensure coordination between communities and jurisdictions to reconcile conflicts.”

Views on the success of public participation are divided. Some people believe that the GMA did encourage more citizen involvement in the planning process. Others, however, expressed a variety of frustrations including: a belief that local governments did not always follow the recommendations of citizens; a belief that the Boards overturned plans which many had worked long and hard to develop; and a concern that last minute changes occurred to plans without adequate public participation. The Commission is recommending some amendments to the public participation process to respond to some of these concerns. Overall, the Commission believes that the level of public participation was good and the GMA achieved this goal.

12. Public Facilities and Services.

“Ensure that those public facilities and services necessary to support development shall be adequate to serve the development at the time the development is available for occupancy and use without decreasing current service levels below locally established minimum standards.”

The GMA has directed local governments to give consideration to the availability of services when planning for growth. Transportation concurrency is a primary example. However, the results of concurrency are beginning to show that, in some areas, public facilities and services are not available, and therefore growth cannot go forward. For example, King County has identified certain “red zones” where transportation facilities are not available and development cannot go forward. The majority of the red zones are outside of the UGA’s; however, some portions of the UGA are affected.¹² If concurrency requirements preclude growth in urban areas, the goal of the GMA to locate growth within UGAs could be frustrated. This highlights the significance of infrastructure financing to the overall objectives of the GMA. If this issue is not addressed, GMA will not be successful.

13. Historic Preservation.

“Identify and encourage the preservation of lands, sites, and structures, that have historical or archeological significance.”

The Commission heard very little testimony on the topic of historic preservation. DCTED has reviewed local comprehensive plans, and in most cases, local governments have taken steps to achieve this goal.

B. Use of the Goals

The Commission did hear testimony on the appropriate use of the GMA’s planning goals. The GMA states that the goals are not listed in order of priority and are to be used exclusively for the purpose of “guiding” the development of comprehensive plan and development regulations. RCW 36.70A.020. In some cases, Board decisions have found that certain goals are more germane than others at the county-wide level, including the goals pertaining to natural resource industries, compact urban growth, and reduction of sprawl. Some goals are viewed in Board decisions as “directive” and therefore require a tangible, measurable outcome; other goals are viewed as procedural because they address only how an outcome is to be achieved.¹³

There continues to be debate over the appropriate use of the goals. Some groups feel that the GMA should be strengthened so that all local governments are required “to give effect” to all of the goals. Others believe that local governments have the discretion to balance the goals in order to respond to regional differences.

C. Summary

Although six years have passed since the GMA was passed, there is insufficient information to ascertain whether the GMA is fulfilling all of its stated purposes. Part of this is due to the fact that it has taken many local governments longer than expected to adopt their initial comprehensive plan; therefore, there is insufficient history to evaluate the effects of those plans.

Overall, there are a number of GMA “successes.” Perhaps one of the most fundamental successes is the fact that local governments planning under the GMA have adopted comprehensive plans and consistent zoning regulations. Prior to the GMA, there was no requirement that local governments had to have comprehensive plans; nor, was there any requirement that the plans had to be followed. This procedural aspect of the GMA is important. Even those who have questioned the wisdom and constitutionality of the GMA have generally testified that planning for growth is good.

The State must, however, be vigilant in monitoring the impacts of the GMA. The Commission recommends that on an annual basis the Legislature receive a report on how the GMA is achieving its goals from DCTED. In order to report, DCTED will need the cooperation of local government to monitor impacts in their area.

V. General Themes

The Commission identified four general themes that appeared as concerns in the comments it received during the information gathering phase of its work:

In addition to these general themes, the Commission also considered two additional topics the Governor asked the Commission to address in the partial veto of SSB 6637. The Governor asked the Commission to look at GMA dispute resolution process and the authority of the Boards to invalidate comprehensive plans and development regulations.

A. Creating Certainty in the GMA

The Commission heard frequent comments about the lack of clear guidance in the GMA. This has resulted in some uncertainty about the nature of the state’s interests the GMA is intended to address. It has also led to appeals over actions taken by local governments.

B. Providing For Flexibility And Equity

The Commission heard many variations on the phrase “one size does not fit all” during the course of its public meetings. Counties and cities suggest that there are wide variations of geography, history, culture, and development around the state that the GMA does not recognize. While acknowledging the great diversity in the approaches taken so far in comprehensive plans, they believe additional flexibility is still necessary to allow local communities to meet their individual circumstances. Added flexibility could also help address some of the harsher impacts changes in the land use system have had on individual property owners.

C. Building Momentum

Cities and counties that have adopted GMA comprehensive plans and development regulations have expressed concern about their ability to effectively implement the plans they have adopted to achieve the benefits GMA is intended to provide. One of the major impediments identified by local governments is the lack of adequate financial resources to pay for infrastructure needed to implement comprehensive plans.

D. Improving the Dispute Resolution Process

The original proponents of the GMA have stated that they intended the Boards to be a place for citizens affected by local planning decisions to be heard without the formality and expense required in judicial proceedings. Many commentators question whether the Boards have developed in a fashion that achieves this objective. In addition, the Boards have faced criticism that they are not being sufficiently deferential to the decisions of local elected officials. Others have noted that the Boards, though controversial, are an essential component in creating certainty and in getting timely decisions.

E. Invalidation of Comprehensive Plans and Development Regulations

The 1995 Legislature gave the Boards the authority to invalidate part or all of a comprehensive plan or development regulation a Board determined to be "substantially interfering" with the goals of the GMA. Once a comprehensive plan or development regulation is determined to be invalid, vesting of projects under that plan or regulation is not allowed. The authority to invalidate was given to the Boards to clarify the impact of a decision by a Board that a comprehensive plan or development regulation did not comply with the GMA. Under the legislation, vesting is not affected by a finding that a plan or regulation does not comply with the GMA. Vesting is only affected by a determination of invalidity.

Since the authority to invalidate plans and regulations was given to the Boards, part or all of eleven county comprehensive plans or development regulations have been determined to be invalid. These determinations have led considerable criticism of the Boards by the elected officials whose decisions have been affected as well as from citizens and businesses adversely affected by the decisions. There are many citizens and organizations who believe the Boards have exercised restraint in use of the invalidity authority and that it is an important tool to encourage a local government to come into compliance with the GMA.

In 1996, the Legislature passed SSB 6637 which included provisions revising the authority of the Boards to invalidate comprehensive plans and development regulations. The Governor vetoed two sections in the bill. In his veto message he asked the Commission to look at the invalidity authority and make recommendations for the 1997 legislative session.

VI. Issue Papers

After identifying the issues that were common themes in the comments made to the Commission, the Commission developed a list of eleven topics for further review. The initial list was supplemented by two additional topics. Commission members and volunteers from outside the Commission prepared papers on each of these topics, exploring the issue, describing the concerns, and suggesting alternative courses of action to resolve the issue. From these papers, the Commission has developed its recommendations. The following is a summary of the papers, the options considered under each, and the conclusions reached by the Commission on the options. The Commissions recommendations have been incorporated into proposed legislation which is attached to this report.

A. GMA Requirements

1. Public Participation

The GMA requires local governments to have a public participation program that allows for “early and continuous public participation in the development and amendment of comprehensive land use plans.” There is some discontent with the current public participation process. The Commission heard from many people that the Boards, when they determine comprehensive plans are not consistent with the GMA, are not honoring the community visioning process. The Commission also received comments from members of the public who believe local governments do not always provide for meaningful public participation and fail to follow the visioning process that they have put into place, often leading to appeals. The Commission identified four basic areas of concern with the manner in which public participation has been implemented: process, notice, enforcement, and facilitation.

The Commission concluded that, although public participation has generally worked well, there were some areas of public participation that should be clarified. Methods of providing notice to the public can be improved, particularly as local elected officials consider amendments to both proposed and adopted comprehensive plans and development regulations. The Commission is sensitive to the need to allow elected officials to make decisions and not create an endless cycle of public notice the leads to gridlock.

RECOMMENDATION:

Amend the GMA to require that local governments: (1) take measures reasonably calculated to provide notice of GMA actions to persons affected by those actions or who have expressed an interest, (2) provide an opportunity for public comment before taking action on significant amendments to a comprehensive plan or development regulation, and (3) provide technical assistance to community organizations to assist in developing a comprehensive plan.

2. Urban Lands

The GMA encourages new urban growth to occur within urban growth areas thereby reducing the inappropriate conversion of undeveloped land into sprawling, low-density development. Establishing the UGA is a complex process involving a combination of expected population increases and land available for a variety of purposes, including residential, commercial, and industrial. There is concern among members of the business community that local governments, although they may have identified sufficient land for these purposes in their plans, may not be able to achieve densities necessary to meet their plans. This can lead to rising business costs and may drive development to other places within the state or to other states. There is also concern about the effect limiting land supply may have on the cost of housing.14

There is little information available at this time to answer these questions. Several local governments have implemented monitoring programs in order to make these assessments, but meaningful information is a few years away. There is less certainty about the actions that local governments will take in response to that information.

The options considered by the Commission included a range of information gathering alternatives which test a number of these hypotheses. Other options would provide incentives to encourage higher densities within the urban areas. The Commission appointed a committee in December, 1996 to assess the issue and make a recommendation in January 1997. The Committee agreed to principles for legislation, but was not able in the time it had to agree on specific legislation. The Committee is continuing to work and has set an end of January 1997 deadline to complete its work.

RECOMMENDATION:

The Commission is encouraged by the progress made by the Committee working on this issue and is hopeful that the Committee will be able to come to agreement on specific legislation. However, in order to assure that the issue is included in its legislative package, the Commission has developed a proposal that incorporates the elements of the principles agreed to by the Committee members. The Commission recognizes that there are a number of details that will need to be worked out, but expects that its proposal will provide a framework for the Committee to work within.

The Commission is recommending that some of the more populous and fast growing counties be required to monitor and evaluate their progress in meeting land use components of their comprehensive plans and county-wide planning policies. The evaluation would be required every five years. If the evaluation indicates that substantial progress towards meeting the comprehensive plan objectives is not being met, the county and its cities would be required to implement measures to address the problem areas. If those measures are not successful, the county and its cities would take additional actions, including the possibility of making necessary changes to urban growth area boundaries.

The Commission recognizes that this requirement is a new mandate and that under Initiative 601 the Legislature must provide funds for its implementation. Based on initial estimates, the Commission is recommending a $7 million appropriation from the general fund to meet the Initiative 601 requirement.

3. Rural Lands

Perhaps no issue has been more difficult to address than rural lands.15 The difficulty of the task is apparent in the GMA, which describes rural lands by what they are not: they are not urban and they are not natural resource lands. Little further guidance is offered. The GMA's silence on what should be permitted in rural areas is understandable because the principal focus of the Act is to manage urban growth. This lack of guidance has left the Boards with the task of providing further definitive GMA requirements. For many, no other facet of Board decisions has been more controversial because Board interpretation of the GMA has, for many counties, required significant reduction in permitted density and curtailment of historic patterns of development and existing uses. This has led county elected officials to argue for the need for more flexibility in planning for rural areas as well as for reducing Board authority. Further, much of the "one size does not fit all" argument is rooted in frustration over Board decisions regarding rural areas.

The Commission considered options that ranged from providing more guidance about rural lands and what type of development is appropriate in those areas to giving local governments even greater discretion to establish rural densities and uses. The Commission also considered options that would either provide additional incentives or remove inequitable results from rural zoning decisions. One option would allow property taxes on open space and agricultural lands to be based on current use, regardless of the amount of income from that property. Another option would provide for additional resources to purchase development rights and/or use other techniques to act as incentives for property owners to leave lands in open space.

The Commission has also concluded that there is value in providing more guidance about what types of development are appropriate within the rural area. The Legislature provided some clarification regarding GMA requirements for rural areas in 1995 legislation. However, controversial issues remain unresolved by the 1995 changes. The Commission recognizes the need to balance the variety of circumstances around the state with the desire for greater certainty. At the same time, the Commission believes that local governments need to know that there are limits to their choices and that these limits should be established legislatively rather than through Board decisions.

The Commission is recommending changes to the rural element to provide guidance for the types of development that are appropriate in rural areas.16 The Commission is also recommending modifications to the definitions of urban growth and urban governmental services to clarify the relationship between urban and rural lands. This will clarify the state's interest and inform local officials of the range within which they can make their choices. The Commission recognizes that, if enacted, these recommendations will, in several ways, alter Board interpretations of the GMA.

RECOMMENDATION:

The Commission recommends that the rural element be clarified to provide guidance to both counties and the Boards. The rural element should establish a clear framework from which counties can make their planning decisions. The rural element should emphasize that circumstances vary around the state. It should also require counties to show how they have arrived at their decisions.

4. Agricultural Lands

The GMA requires counties to designate agricultural lands of long term commercial significance. Some in the farming community argue that this definition fails to take into account the fluid nature of the farm economy. They argue that changing market conditions and water availability are two key elements to determining whether certain areas have commercial significance or not. Farmers have also expressed concern that designating agricultural land will prevent any other development or activities on that land and this may ultimately drive farmers out of business. Others suggest that, although the farm economy may be changing, agricultural land of long-term commercial significance will continue to have be commercially significant, even if the crops grown on that land varies over time. There was also a suggestion made that the test of commercial significance should be based on the quality of the soils, not on variations in the economic climate.17

One option considered by the Commission would explicitly allow for flexibility in zoning in agricultural areas. Several other states have authorized local governments to adopt a variety of zoning techniques that allow some limited non-agricultural use of agricultural lands. Another option involved removing some of the tax burdens on agriculture and increased use of purchase of development rights.

RECOMMENDATION:

The Commission recommends that counties be given authority to adopt a variety of innovative zoning techniques in rural areas. The zoning options would permit some limited non-agricultural uses in the agricultural zone. The Commission also recommends that the open space/agricultural tax provisions be expanded to include land that has been designated as open space or agricultural land under a comprehensive plan and that assessments of agricultural land for property tax purposes not be based on neighboring properties that have been sold for development purposes.

5. Flexibility

A number of local elected officials and local citizens believe the GMA imposes a particular planning concept that does not fit with their communities. These concerns have led to a variety of proposals to allow local governments to either remove themselves from the requirements of planning under the GMA or to allow them to modify some or all of the requirements of the GMA. The Commission also considered an option which would allow a county and its cities to negotiate an alternative county-wide framework for complying with the GMA goals and policies. Another option would allow a local government to demonstrate that it was achieving the goals and policies of the GMA, even if it was not in exact compliance with all of its requirements. GMA-flex could also further city-county cooperation, which is an important benefit of the county-wide planning process.

The option received some initial interest, but as it became more specific, lost supporters and gained opponents. The were concerns from county representatives that the provisions were too restrictive and from public interest groups that the provisions would allow agreements that undermined the GMA.

RECOMMENDATION:

The Commission is not recommending GMA-flex at this time. However, the Commission does believe that this option is preferable to proposals that would allow a county to "opt-out" of GMA and should be considered as an alternative to opt-out legislation. It may be possible to develop a proposal which is acceptable to a variety of interests with additional work.

B. Review of Local Government Decisions

1. Standard of Review

It is often stated that the GMA reflects the Legislative determination to have “bottom-up” planning. Unless a plan or development regulation is appealed, it is valid. If there is an appeal, the presumption of validity remains. The Board must determine by a preponderance of the evidence that the plan or regulation does not comply with the GMA. This standard has proven difficult to apply in the context of review of legislative enactments, where evidence supporting a decision of the local elected officials may not always be available.

The Commission reviewed a number of options for changes to the standard of review that applies in an appeal of a GMA plan or regulation. These ranged from minor adjustments that fit the type of proceeding to changes that would grant considerably greater deference to the decisions of local elected officials.

Some Commission members believe the appropriate standard of review should be substantially more deferential to local governments. They point out that most local government legislative acts are reviewed by the courts under the "arbitrary or capricious" standard and believe that this standard should also apply to decisions under the GMA.

Other Commission members believe that the GMA has a substantive component, which makes it different from the majority of statutes local elected officials implement. This justifies the greater scrutiny called for in the GMA. Some of these members believe the current standard should not be changed. Others believe it is appropriate to give additional deference to local decisions, but that the GMA's goals need to be recognized. They point out that the "clearly erroneous" standard of review provides additional deference, but that would measure local decisions against the GMA's goals.

The Commission is recommending the "clearly erroneous" test. During the Commission's discussions, it reached the conclusion that arguments over the standard of review, as well as other procedural issues, were largely misplaced. The debate over the standard of review has occurred because the GMA itself is ambiguous in some fundamental areas, particularly in the rural element. Commission members concluded that a less deferential standard of review ("clearly erroneous") would be appropriate if these ambiguities were removed.

RECOMMENDATION:

The Commission recommends the standard of review that applies to Board review of local governments decisions under the GMA should be changed to the clearly erroneous standard. The Commission also recommends that an intent section should accompany the change in the statute to clearly state the legislative intent that the change is intended to be more deferential to local decisions than the current preponderance of the evidence standard.

2. Invalidity

Since their creation, the Boards have had the authority to determine that plans or regulations do not comply with the GMA. This authority led to concerns about the effect of a decision of non-compliance on permit applications and projects that are dependent upon those plans or regulations. The Legislature sought to clarify this impact in 1995 by providing that a determination of non-compliance did not apply to permits unless the Board made a specific finding that the plan or regulation was invalid. This order only applies to permits filed after the date of the Board’s order. Those projects are subject to the plan or regulations determined by the Board as complying with the GMA. The Boards have issued approximately 10 invalidity orders since the authority was granted to them.

The exercise of this authority has proven to be a potent tool for encouraging compliance with the GMA. However, it has also proven to be a focus for complaints that the Boards are undermining the original purpose of the GMA that local elected officials should make the planning decisions for their communities. The options considered by the Commission to address this authority ranged from eliminating the authority, to allowing projects to be reviewed under the goals and policies of the GMA until a new plan or development regulations are approved, to clarifying the types of permits affected and not affected by the order.

RECOMMENDATION:

The Commission recommends the authority to invalidate comprehensive plans should remain with the Boards. It is recommending changes that clarify that projects that vested prior to the determination are not affected by the order, exempt some types of permits from the effect of a determination of invalidity, and clarify the options available to a local government to have an order lifted.

3. Dispute Resolution

One of the original purposes of the Boards was to provide an alternative forum to the judicial system for the resolution of GMA disputes. There are some concerns that the process has proven to be too formal and that access for members of the public is still difficult. In addition, there is a recognition that in cases where a Board issues a decision, the problems leading to the dispute in the first place may not be addressed.

The Commission considered options which would encourage resolution of disputes outside of the litigation system. These included allowing more time for issuing a decision when the parties are in negotiations and providing financial and technical resources to facilitate dispute resolution. The Commission also considered an option which would remove the authority of the Boards to issue decisions and have them focus on alternative dispute resolution.

RECOMMENDATION:

The Commission recommends that the Boards be allowed to extend the time period for issuing a decision when the parties request additional time for negotiations. The Commission also supports the request in Governor Lowry's budget to provide grants to help state agencies and local governments resolve multi-party public disputes through mediation as an alternative to regulation and litigation.

4. Future Dispute Resolution Procedures

The Commission briefly discussed the appropriate long term approaches for resolving disputes that arise under the GMA. There were some suggestions that as the GMA matures, the need for three separate full-time Boards may be lessened. Others have suggested that a special land use court should be established. There was also a recognition that the Commission's review of a consolidated land use code might suggest ways to better integrate the appeal processes under GMA, the Shoreline Management Act, and other environmental laws. The 1995 Legislature made some beginning steps in the direction by consolidating appeals of planning questions under the Growth Management Hearings Boards. The Commission intends to address this matter in 1997 and include its recommendation in its report to the 1998 Legislature.

RECOMMENDATION:

For now, the Commission is not recommending in this report changes to the structure of the boards that hear environmental appeals. The Commission will examine the issue in greater detail as part of its review of a consolidated land use code, including looking at options to consolidate existing boards or creating a special land use court.

5. Senate Confirmation of Board Members

The members of the Boards are appointed by the Governor for six year terms. They are not subject to Senate confirmation. Because the Boards have been subject to considerable criticism, there were some suggestions that having the members go through the confirmation process would provide additional credibility for the Boards. The Senate confirmation process is seen as providing assurance that the appointees to these Boards have sufficient qualifications and political credibility to survive the confirmation process. The Commission also considered an alternative which would shorten the terms of appointment to four years from the current six years.

RECOMMENDATION:

The Commission is not recommending any changes to the appointment procedures. The Commission does not believe that Senate confirmation would be inappropriate, but it concluded that requiring Senate confirmation was not likely to have a significant benefit. In addition, the Commission was informed by some Senate members that they would not support confirmation, although for different reasons.

C. Incentives

1. Annexations

Over 155 cities and counties have adopted plans under the GMA. As these jurisdictions have moved from adoption of their plans, they have discovered some difficulties in implementation. Infrastructure financing, discussed below, is a key component of implementing capital facilities plans. Local governments need to review those plans based on the type of development that is actually occurring. In addition, addressing infill development, best available science for designating and protecting critical areas, and addressing economic development expectations will require careful attention. The Commission considered a variety of options to provide assistance to local governments in making these next steps. These options included changes to simplify annexations in urban growth areas and to state assistance in identifying and marketing industrial and commercial sites in adopted urban growth areas. Also considered, and discussed below, were infrastructure finance options.

RECOMMENDATION:

The procedure for annexing within urban growth areas should be eased under certain circumstances. The procedure governing annexation should be consistent for all classes of cities. The Boundary Review Boards should consider interlocal agreements and adopted GMA comprehensive plans in their review of proposed annexations.

2. Capital Facilities Financing

The capital facilities element required to be included in GMA comprehensive plans is keystone to making GMA work. The GMA requires local governments to include a six year capital facilities plan as part of their comprehensive plans. The capital facilities plan must also include the means for financing the new infrastructure. State funds for building new roads, schools, and water, sewer, and stormwater systems are scarce. Although local governments may impose impact fees on new development, only a few jurisdictions have chosen this option. Many participants in the Commission’s process have expressed a concern that infrastructure will not be available to meet the demands of growth. This will either result in a deterioration of service, or in some instances, may prohibit development. The Commission has identified several different options to provide infrastructure funding, ranging from using existing state funds, to authorizing the issuance of state bonds, to authorizing cities and counties to generate the funds through the sale of their own bonds.

RECOMMENDATION:

The Commission is recommending that counties and cities planning under the GMA, and who are in compliance with its provisions, be authorized to impose a one-percent sales tax on new construction within their jurisdictions. Any tax paid would be a credit against the state sales tax owed. This would result in a no increase in taxes paid, but would result in a decrease in revenue to the state. The revenue generated by the tax would be required to be used to implement the county's or city's capital facilities element.

3. Financing for Integrated Planning Process (Finance Advisory Committee)

The Commission's finance advisory committee recommended continuation of the current grant program. The Finance Advisory Committee believed that the focus of the grant program should be modified to encourage proposals that incorporate regulatory reform measures as well as encouraging interagency coordination and cooperation.

RECOMMENDATION:

The Commission is recommending that the criteria for issuing grants under the Planning and Environmental Review fund should be modified to include regulatory reform as an objective of the grant projects and to encourage interagency cooperation. The Commission supports the recommendation in Governor Lowry's budget for the 1997-99 biennium for an appropriation of $1.5 million for the Planning and Environmental Review Fund. This includes $1 million from the Public Works Trust Fund and $ .5 million from Growth Management Grants. The Commission also supports the Department of Ecology agreement to provide $ .5 million from the Centennial Clean Water fund for grants related to the purposes of that fund. The Commission also endorses the willingness of the Department of Transportation to participate in the Planning and Environmental Review Fund process with resources that it can provide within the constants of its budget and the Washington State Constitution.

4. Professional Certification Advisory Committee

The Professional Certification Advisory Committee considered ways in which local governments could use of professionals to assist in reviewing project applications. The Committee discovered that county and city governments have implement a variety of programs that do make use of professional expertise. The Committee concluded that providing technical assistance would be the most effective way to share the knowledge these governments with others.

RECOMMENDATION:

The Commission is recommending that the Permit Assistance Center collect and disseminate information on state and local programs that make use of professional expertise to assist in the review of project applications.

_______________________________

1 As of November 6, 1996, 26 counties were planning under GMA and 14 had adopted comprehensive plans. In addition, 182 cities were planning under GMA and 128 had adopted comprehensive plans.

2 Source: Department of Community, Trade, and Economic Development Survey, June 1996. Preliminary results: 76% found increased public participation, 69 % found better coordination with neighboring jurisdictions, 71 % found better knowledge of infrastructure needs, 61 % found more certainty abut permitted land uses, and 55 % found more consistency between capital budgets and comprehensive plans. Final report is due in January 1997.

3 See, e.g., New building code fuels a Kirkland condo boom, Seattle P-I, November 1996, page B3; .

4 As of May 16, 1996, 326 cases had been filed with the Growth Management Hearings Boards. As of that date, 63 plans or development regulations had been remanded for further review and 11 cases were in continuing non-compliance. 48 cases had resulted in findings of compliance and 45 cases were pending. As of November 27, 1996, parts of 11 county comprehensive plans have been found to be invalid. Source: Memo dated May 16, 1996 from Les Eldridge to Harry Reinert; LUSC Issue Paper # 6.

5 Laws of 1995, Ch. 347, Sec. 1

6 Meetings have been held in Seattle, Olympia, Everett, Yakima, Tacoma, and Bellevue.

7 Source: Bremerton, et al., v. Kitsap County, CPSGMHB No. 95-3- 0039 at 174.

8 Sources: “Housing Market Takes Off: Boeing’s surge, bustling economy push prices up,” Puget Sound Business Journal (10-25- 96); “Through the roof again?,” Seattle Times (11-17-96); “Growth Controls: policy analysis for the second generation,” Peter Navarro and Richard Carlson, 24 Policy Sciences 127-152(1991); “Must Growth Restrictions Eliminate Moderate Priced Housing,” Thomas I Miller, 52 Journal of the American Planning Association 319-325(1986); “The Impact of Interest Rates, Income, and Employment upon Regional Housing Prices,” Alan K. Reichert, 3 Journal of Real Estate Finance and Economics 373-391 (1991); “Urban Land Supply: Natural and Contrived Restrictions,” Louis A. Rose, 25 Journal of Urban Economics 325-345 (1989); and “The Effects of Land-Use Constraints on House Prices,” Henry O. Pollakowski and Susan M. Wachter, 66 Land Economics 315-324 (1990).

9 “Growth Management in Washington State: Impact on Affordable Housing,” Washington State University Center for Real Estate Research, p. 91 (1995). “Changes in the [affordability] indices over time cannot be attributed solely to the GMA. Prevailing interest rates may be the single most significant factor affecting the affordability of all housing, including affordable housing. The impact of external economics on interest rates are beyond the reach of any government activity. Also, change in home prices and incomes are related to local market pressures, which may result in price changes which do not allow GMA impacts to be isolated.” (p. 86).

10 Source: “Homing in on Home,” The Seattle Times (10-27-96).

11 Source: Fortune Magazine, November 11, 1996, pp. 133-136. The National Association of Home Builders 2nd Quarter 1996 rank of housing affordability shows Seattle ranked better than either San Francisco or Portland. San Francisco was ranked 181 (least affordable) and Portland-Vancouver was 177th. Of areas over 1 million population, Kansas City, at 11th, and Minneapolis-St. Paul at 22nd were the most affordable.

12 Update 96, Second Quarter (April - June), Transportation Concurrency Management Program, King County Department of Transportation.

13 See, e.g., Bremerton v. Kitsap County, CPSGMHB Case No. 95-3- 0039, at 25, 58; Pilchuck v. Snohomish County, CPSGMHB Case No. 95-3-0047; City of Gig Harbor, et al., v. Pierce County, CPSGMHB Case No. 95-3-0016 (1995); Gutschmidt v. Mercer Island, CPSGPHB Case No. 92-3- 0006 (1993); Ridge v. Yakama Indian Nation, EWGPHB NO. 94-1-0017 (1994); and Save our Butte Save Our Basin Society v. Chelan County, EWGPHB No. 94-1-0001.

14 See discussion of affordable housing issues on page 8.

15 “Webster’s dictionary defines rural as ‘relating to or characteristic of the country.’ Other words such as pastoral or bucolic are often used to describe rural character. The problem lies in the fact that such a simple concept is enormously difficult to define.” Preserving Rural Character, Fred Heyer, American Planning Association, PAS Report No. 429, p. 1 (1991).

16 “The first step in the community planning process is to acknowledge that some development is inevitable.” Preserving Rural Character, p. 1.

17 “In defining categories of agricultural lands of long-term commercial significance for agricultural production, counties and cities should consider using the classification of prime and unique farmland soils as mapped by the Soil Conservation Service.” WAC 365-190-050(2)