Understanding the Growth Management Hearings Board Order and Appeal Outcome

Cities and counties in Washington State are required to adopt a comprehensive plan under the Growth Management Act (GMA). The comprehensive plan is a statement of goals and policies that detail how a county or city will manage and accommodate future growth. The goals and policies of the comprehensive plan are implemented through capital investments, development regulations, and programs. The GMA requires cities and counties to periodically review and update their comprehensive plans on a ten-year cycle. Mercer Island most recently completed a periodic review and update of its Comprehensive Plan in 2024. More information about this project can be found on the previous Comprehensive Plan Periodic Update Let's Talk project page, and the introduction article, Putting the Comprehensive Plan in Context.

The 2024 adoption of the Mercer Island Comprehensive Plan periodic review and update was appealed to the Growth Management Hearings Board (GMHB) on the grounds that the Comprehensive Plan did not adequately plan for and accommodate future affordable housing needs (GMHB case number 25-3-0003). On August 1, 2025, the GMHB issued a Final Decision and Order (GMHB Order) finding that the Housing Element of the Comprehensive Plan was noncompliant with some of the provisions of the GMA and remanded the Comprehensive Plan to the City for revision.

The Comprehensive Plan adopted in 2024 remains in effect during the remand, but the City must complete work to update the plan and comply by the timeline established by the GMHB Order (RCW 36.70A.300(3)(b)). The compliance timeline is one year from when the GMHB issued its decision; work must be completed by July 31, 2026. Failure to comply with the GMHB Order can result in sanctions against the City (RCW 36.70A.340).

The GMHB Order requires the City to address four issues:

Land Capacity Analysis: Identify residential land capacity at each housing affordability level and close any identified gaps.
Adequate Provisions: Adopt incentives, mandatory provisions, and planned actions (“aka adequate provisions”) that will increase the supply of affordable housing.
Station Area Subarea Plan: Adopt a subarea plan for the area around the transit station.
Anti-Displacement Measures: Adopt anti-displacement measures to address the potential displacement that can occur with changes in zoning.

Each of these items are discussed in greater detail in the following sections. Addressing these four issues is expected to constitute a substantial revision of the Comprehensive Plan, including the Land Use, Housing, Capital Facilities, Utilities, and Transportation Elements. In addition to amending the elements of the Comprehensive Plan, compliance with the GMHB Order will also require amendments to the City’s development code and may include revisions to the zoning map.

GMHB ORDER - ISSUE #1: Land Capacity Analysis

Cities are required to complete a land capacity analysis as part of the Periodic Update to the Comprehensive Plan. A land capacity analysis calculates how many housing units and how much commercial space can be accommodated under a comprehensive plan when considering existing development; vacant and redevelopable land; development regulations such as critical areas, shoreline development standards, and maximum densities; and, market factors. The land capacity analysis must demonstrate the City is able to meet its growth target and housing affordability levels as assigned by King County.

Under the GMA, counties and cities are required to plan for adequate housing to accommodate the projected housing needs for each income segment (RCW 36.70A.070(2)(a)-(d)). The GMA establishes housing affordability levels based on income segments as a percentage of the Area Median Income (AMI). The housing affordability levels are categorized as follows:

Extremely Low Income (less than 30% of the AMI)
Very Low Income (between 30 and 50% of the AMI)
Low Income (50 to 80% of the AMI)
Moderate Income (80 to 120% of the AMI)
High Income (greater than 120% of the AMI)

Table 1. Mercer Island Housing Needs by Housing Affordability Level.

Source: King County Ordinance 19660 approved 8/22/2023.

Notes:

PSH = Permanent Supportive Housing
Emergency Housing is its own metric and not part of the housing need or housing growth target.

The City’s total allocated housing growth is 1,239 units expected over the 20-year planning period of the Comprehensive Plan, which are further broken down by the housing affordability level as summarized in Table 1 above. The GMA now also requires cities to evaluate land capacity for each housing affordability level per RCW 36.70A.070(2)(a), which requires a Housing Element that:

“(a) Includes an inventory and analysis of existing and projected housing needs that identifies the number of housing units necessary to manage projected growth, as provided by the department of commerce, including:

(i) Units for moderate, low, very low, and extremely low-income households; and

(ii) Emergency housing, emergency shelters, and permanent supportive housing;”

Revisiting the Land Capacity Analysis in 2023 and 2024

During the Comprehensive Plan periodic review completed in 2024, and as a result of the changes set forth by HB 1220 in 2021, the City prepared a Land Capacity Analysis Supplement (AB 6385) that was presented to the City Council on January 2, 2024. The City followed Commerce guidance for this analysis and considered multifamily development capacity as the appropriate capacity to accommodate housing needs for households with low income levels (earning less than 80 percent AMI). An analysis of the aggregated land capacity in the Land Capacity Analysis Supplement indicated that the City had a housing deficit of 143 units of multifamily development capacity. To address this deficit, the City increased the maximum building height in some areas of the Town Center and expanded the affordable housing requirement for development in the Town Center, which formed the final policy recommendations adopted by the City Council.

August 2025 GMHB Order: Remands Land Capacity Analysis Back to City

The GMHB Order found that the City’s approach to calculating the land capacity was not adequate to determine capacity for each housing affordability level, and that when relying on voluntary incentives zoning, the City needed to examine how many affordable units had been created in the past and at what income levels. The GMHB Order directed the City to reevaluate land capacity to estimate expected production of housing units in each affordable housing level and demonstrate that the City is accommodating its housing needs at each housing affordability level, particularly by accommodating affordable housing for households earning low income, very low income, and extremely low income.

GMHB ORDER - ISSUE #2: Adequate Provisions

“Adequate provisions” was introduced as a new planning requirement as part of the suite of policy directives that encompassed HB 1220 in 2021. “Adequate provisions” are a combination of mandatory provisions, policies, incentives, subsidies, and planned City actions that, when taken together with development capacity, allow conditions for the City to meet its housing needs at each housing affordability level over the 20-year planning horizon. For example, the City code currently provides a height bonus in the Town Center to incentivize the construction of affordable housing units. The maximum building height in Town Center is two stories, but buildings that provide affordable housing units at an established ratio may construct additional floors. This is an example of an existing policy that falls under the umbrella of “adequate provisions.”

2024 Comprehensive Plan Adequate Provisions in the Housing Element

The Housing Element of the 2024 Comprehensive Plan identified the following policies to be developed and implemented upon adopted of the Comprehensive Plan to meet the “adequate provisions” requirements of HB 1220:

Height bonus
Multifamily Tax Exemption (MFTE)
Reduced design review process
Reduction or waiver of permit fees
Reduction or waiver of parking requirements
Fee-in-lieu
Establish a housing fund
Inclusionary zoning
Leverage ARCH membership to achieve more affordable units

Presentations and discussions with the City Council assumed that these policies would be developed and implemented over the next five years in alignment with the state five-year implementation progress report, which requires the City to demonstrate progress towards implementation of the development regulations, zoning, land use changes or other legislative or administrative action necessary to implement the Comprehensive Plan (RCW 36.70A.130(9)).

August 2025 GMHB Order: Remands Adequate Provisions Requirements Back to City

The GMHB Order determined that the City was required to have implemented the “adequate provisions” policies and programs at the time of adoption of the Comprehensive Plan. The GMHB order also directed the City to perform additional analysis to ensure the “adequate provisions” will result in the City meeting its housing needs at all housing affordability levels over the 20-year planning horizon.

GMHB ORDER - ISSUE #3: Station Area Subarea Plan

The Mercer Island Comprehensive Plan must be consistent with VISION 2050, which is the planning document for the Puget Sound Regional Council. VISION 2050 establishes multicounty planning policies (MPPs) that coordinate growth between cities in the Puget Sound region. One MPP, MPP-DP-Action-8, requires cities to adopt subarea plans for light rail transit stations as follows:

“Center Plans and Station Area Plans: Each city or county with a designated regional center and/or light rail transit station area will develop a subarea plan for the designated regional growth center, station area(s), and/or manufacturing/industrial center. Cities and counties will plan for other forms of high-capacity transit stations, such as bus rapid transit and commuter rail, and countywide and local centers, through local comprehensive plans, subarea plans, neighborhood plans, or other planning tools. Jurisdictions may consider grouping station areas that are located in close proximity.”

August 2025 GMHB Order: Remands Subarea Plan to City for Completion

The GMHB Order found that the deadline for adopting a subarea plan for the area around the new light rail station was at the time of adoption of the Comprehensive Plan.

GMHB Order - ISSUE #4: Anti-Displacement Measures

HB 1220 requires jurisdictions to identify displacement risk and include policies and actions in the housing element of the Comprehensive Plan to mitigate displacement associated with growth and redevelopment, particularly for low-income and vulnerable populations. Specifically, the Comprehensive Plan Housing Element must establish anti-displacement measures per RCW 36.70A.070(2)(h), which states:

“[The Comprehensive Plan must include a housing element that] Establishes anti-displacement policies, with consideration given to the preservation of historical and cultural communities as well as investments in low, very low, extremely low, and moderate-income housing; [ … ]”

2024 Comprehensive Plan Anti-Displacement Measures

The Adopted 2024 Comprehensive Plan identified the following policies to be developed and implemented to meet the new anti-displacement policy requirements:

Seeking partnerships to inventory naturally occurring affordable housing (NOAH)
Requiring advance notice of rent increases
Landlord provided relocation assistance
Right of first refusal or tenant opportunity to purchase requirements when an apartment building is converted to a condominium
Requiring a displacement risk analysis for any proposed zoning changes affecting a zone where multifamily or mixed-use development is allowed

August 2025 GMHB Order: Remands Anti-Displacement Policies Back to City

Similar to the requirements for “adequate provisions,” the GMHB Order found that the anti-displacement policies were required to be adopted at the time of adoption of the Comprehensive Plan.

August 2025 GMHB Order - Compliance Deadline

The GMHB requires the City to adopt the amendments to the comprehensive plan and take other necessary steps to comply with the GMHB Order by the following deadlines:

January 28, 2026 – First progress report due
February 27, 2026 – Second progress report due
July 31, 2026 – Compliance due
August 14, 2026 – Compliance report and record due
September 15, 2026 – Compliance hearing