Hearings propose small housing for Chelan code, Apple Blossom Center

CHELAN – One of the public hearings held at the July 8 city council meeting addressed amending the Chelan Municipal Code (CMC) to allow smaller cost-efficient housing choices to the code. The second concerned the Apple Blossom Center Development Agreement to add two new multifamily definitions - micro-housing units and cottages.

The CMC action was prompted by a 2023 Washington state law requiring unit lot subdivisions to be included in short plat regulations for all cities, towns, and counties.

 “All cities, towns, and counties shall include in their short plat regulations procedures for unit lot subdivisions, allowing division of a parent lot into separately owned unit lots. Portions of the parent lot not subdivided for individual unit lots shall be owned in common by the owners of the individual unit lots, or by a homeowners’ association comprised of the owners of the individual unit lots.” 

As the Community Development Department (CDC) background summary explains, a unit lot subdivision is defined as a land division where individual unit lots are created within a larger parent lot. The parent lot must still meet zoning dimensional standards. Unit lots are not required to do so. 

The unit lots allow the separate sale and ownership of individual structures. Each unit lot is a legal, sellable lot of record with its own tax parcel number. 

Any portion of the parent lot not included in unit lots – driveways, open space, or shared infrastructure - must be owned in common by unit lot owners. 

A row of townhouses, each owned individually with shared driveways, is an example of a unit lot subdivision.

Community Development Director John Ajax explained that the city planning commission held a public hearing and forwarded a recommendation to the council for more testimony. A staff report will follow for consideration by the council of an ordinance to change the code. 

Resident Lynette Grandy testified that there are about 25 to 30 chapters in the city code with purpose or intent statements. Grandy urged the council to consider adding a purpose statement to the draft.

“Let’s make it easier for Director Ajax and staff to provide direct information about improving housing affordability for locals when they go over the code with property owners,” said Grandy. “A direct purpose statement written in the code attracts the attention of property owners.” 

Apple Blossom additions considered

Ajax explained that in 2000, the Apple Blossom property was zoned for commercial/industrial purposes only. Later amendments recognized an eventual need for future housing. In 2022, a major amendment allowed for multifamily residential to occur. 

“Before you is a proposed second amendment to the development agreement to allow for multifamily in Apple Blossom Center,” Ajax said.

“We currently have a development agreement in play where you can build up to 720 multifamily units there, and cannot have short term rentals,” said Ajax. “This new development agreement would define two new uses within that – micro-housing and cottage development – proposed to count as half a dwelling unit for the purposes of that 24 units per acre and 720-unit cap.”

The CDC overview explained that each micro-unit or cottage would count as one-half of a standard unit toward the agreement’s 720-unit cap.

A 10 percent cap per project limits the change to roughly 80 micro-units on the WA Chelan (Weidner) parcel and 64 micro-units or cottages on the remaining Apple Blossom Center Holdings land. This half-unit accounting yields up to one 144 units without increasing gross density or altering necessary infrastructure. 

For the WA Chelan Apartments, the amendment removes the three-year spacing rule for large projects and allows their project to vest for up to five years under the 2021 building code, enabling phased construction. If WA Chelan includes micro-units, it must deed-restrict five percent of its total units at or below 80 percent of the area median income (AMI) for 50 years. These affordable units are not proposed to be included in the 720-unit limit. 

Other multi-family projects that do not build affordable units may continue to use the existing options: a $3,400-per-unit fee (inflation-indexed) or a five-percent set-aside. The amendment also bans future co-living configurations in the Apple Blossom Center which would otherwise be counted as one-quarter of a unit. 

Key changes proposed: 

New housing types: Adds micro-units less than or equal to (≤) 450 sq. ft. and cottages. 

Half-unit density accounting: Each micro-unit or cottage counts as 0.5 toward the 720-unit cap; capped at 10 percent of each individual project’s total. 

Targeted phasing: WA Chelan Apartments is exempt from the three-year spacing rule; one permit package may vest for up to five years. 

Affordability trigger: If micro-units are built, five percent of WA Chelan’s units are deed-restricted at ≤ 80 percent AMI for 50 years and excluded from the cap. 

Co-living prohibition: Explicitly disallows single-room-occupancy units.

Council member Terry Sanders asked if cottage unit would be available as rent-to-own units. Ajax noted that while short-term rentals are not allowed, cottages ca be owned.

Sanders also asked if the 720 units would be completed in phases rather than all at once. 

Ajax clarified that a two-phase construction agreement would not allow a second of more than 50 units to begin for five years.

Council members Bob Goedde and Jon Higgins expressed concerns about the traffic impacts of the new residential units.

Council member Mark Ericks inquired about effects emergency and hospital traffic in the area.

Ajax said intersection roundabouts near Walmart are being studies as well street vacations, and right-of-way acquisitions.

“Apple Blossom Holdings is very much aware of this,” said Ajax. “They need to start looking at monetary contribution toward traffic improvement because at some point they will be on the hook for providing…for traffic improvements.”

Council member Tim Hollingsworth wondered about occupancy limits on half units, “although presumably it would be difficult to get more than two folks in one of those.”

Ajax said by code there is no occupancy limit, but the issue is under consideration.

Hollingsworth said his ultimate concern was over traffic since every two micro units require one additional parking space or put another way, 72 spaces for 144 micro units.

Weidner Development Director Nick Nowotarski and associate Drew Fulton told the council that the company is ready to begin its first phase of 246 of 400 units in early 2026.

As with the first hearing, Ajax again explained the next step will include a finalized development draft together with a staff report for council to approve or deny the ordinance. 

Mike Maltais: 360-333-8483 or michael@ward.media