Chapter 13.74
CONNECTING HOUSING TO INFRASTRUCTURE PROGRAM (CHIP)

Sections:

13.74.010    Purpose, intent, and authorization.

13.74.020    Waivers available under CHIP.

13.74.030    Eligibility for CHIP – General provisions.

13.74.010 Purpose, intent, and authorization.

RCW 35.92.380 allows cities to waive utility connection fees for affordable and/or low-income housing units (as defined in RCW 35.92.385). The purpose of this chapter is to waive up to 100 percent of the city’s general facilities charges (GFCs) under certain conditions and to enable the city of Sequim to apply for and receive grants from the Washington State Department of Commerce’s “Connecting Housing to Infrastructure Program” or “CHIP.”

CHIP grants are intended to be used by local governments to defray the costs of development of affordable and/or low-income housing by providing the city with the opportunity to reduce a developer’s fees to connect to public infrastructure by up to 100 percent.

CHIP grants are available to cities that implement the affordable housing sales and use tax enacted in RCW 82.14.540 (HB 1406). Sequim adopted that tax in 2020 (see Chapter 3.34 SMC). (Ord. 2023-019 § 1 (Exh. A))

13.74.020 Waivers available under CHIP.

Developers of eligible housing units may receive a partial or complete waiver from payment of water and sewer GFCs to those units. The total waiver may be up to 100 percent of the sewer and water GFCs imposed under this title and as set forth in Chapter 3.68 SMC. Waivers are subject to the city’s successful application for and receipt of a CHIP grant reimbursing it for the waived portion of the connection fees. (Ord. 2023-019 § 1 (Exh. A))

13.74.030 Eligibility for CHIP – General provisions.

A. Eligibility for GFC waivers under CHIP is determined by the Department of Commerce criteria in place at the time of application. Generally, the proposed development benefiting from the waiver must consist of new housing that meets CHIP’s definition of low-income and/or affordable housing as defined at the time of grant application.

B. The city’s decision to pursue a CHIP grant, and the waiver amount to be offered to a developer, is in the city’s sole discretion and will be based on the following:

1. Public benefit of the specific project;

2. The extent to which the developer has sought other funding sources;

3. The financial hardship to the project of paying the connection fees;

4. The impacts of the project on public facilities and services; and

5. The consistency of the project with adopted city plans and policies relating to affordable and/or low-income housing.

C. A waiver granted under this chapter is conditioned upon the developer recording a covenant approved by the director of community development and city attorney that prohibits using the property for any purpose other than for affordable and/or low-income housing as defined in the CHIP grant. The covenant must run with the land and be binding upon the owner(s) and all successors, heirs, and assigns. At a minimum, the covenant must address price restrictions and household income limits for the affordable and/or low-income housing, and the reporting and monitoring requirements needed to ensure compliance with the grant. The covenant must also require that, if the property is converted to a use other than for affordable and/or low-income housing as defined in the covenant, the property owner must pay the applicable GFCs in effect at the time of the conversion. Covenants required by this subsection must be recorded with the Clallam County auditor.

D. A bond or other form of surety acceptable to the city equal to the amount of the waived GFCs may be required to ensure that the affordable and/or low-income housing is constructed and successfully implemented.

E. CHIP grant availability and eligibility criteria is determined by the state of Washington. The city of Sequim makes no independent guarantee of continued availability or consistency of criteria from year to year.

F. The city may, at its sole discretion, establish a monitoring fee for the affordable and/or low-income units to cover the city’s costs to review and process documents to maintain compliance with affordable and/or low-income covenant restrictions. (Ord. 2023-019 § 1 (Exh. A))