A half-acre concrete lot in Spokane. A 655-acre expanse of cropland in Pasco. Sixty acres off the side of Interstate 90 in Benton County.
Washington’s Department of Natural Resources owns more than 7,000 acres of “transition land” scattered across the state. Most of this property is surrounded by development, leaving it unsuitable for timber sales – the department’s largest source of revenue from the roughly 5.6 million acres it manages.
As the state tries to figure out what to do with these oddball parcels, some see an opportunity to build more housing at a time when it’s badly needed.
In the last few months, the Department of Natural Resources has worked with local governments in Kitsap, Pierce and other counties to transfer property surrounded by development to them to use for affordable housing or other development.
And the department has a budget request pending for the upcoming legislative session that would help move along another deal, one that could serve as a template for future projects.
It’s all part of a broader vision from the Department of Natural Resources to make better use of public lands where it would be difficult for the state to make any money from logging.
Commissioner of Public Lands Hilary Franz, who is running for governor in 2024, wants the state to look for more ways to use its land for housing.
“It makes sense that we would be part of solving our greatest social and economic crisis,” Franz told the Standard in an interview.
‘Not very efficient’
Many of the smaller parcels the state owns are from land the federal government gave to Washington when it became a state in 1889, DNR communications manager Kenny Ocker said.
But, over a century later, much of this fragmented land is hemmed in by surrounding property owned by cities, counties or private owners.
“Spread-out lands are not very efficient for us to manage,” Ocker said.
The state has been working to transfer these parcels to local governments, but that isn’t always simple.
DNR has to sell the land at market value, meaning local governments or others need enough money to buy it. And the land needs to be zoned for whatever future use may be in store.
Generally, when a parcel is transferred, the department uses the money it receives to purchase other land that it can use to generate revenue. That income flows from the state to schools and counties, Ocker explained.
‘We don’t have enough of the infrastructure’
There are different paths to putting state land to new use.
The department itself could act as a developer, building housing on property it owns as long as the land is zoned for residential use. In this scenario, the department has looked to develop homes for state employees who can’t find affordable housing in the areas where they work.
In other cases, like in Kitsap County or Pierce County, the department looks to transfer the land to local governments who can use it for homes, businesses or community sites.
Another possibility is for the department to lease land zoned residential to developers who could use it to build housing. But this approach can take more legwork from the state.
This option is often best for affordable housing. The requirement to sell state land at market rates means it can be pricey, and only attractive to developers of higher-end homes.
In an attempt to keep certain property affordable, the department wants Gov. Jay Inslee and the Legislature to approve $3 million over the next two years for a pilot project to convert some of their land into developer-ready lots that can be used for affordable housing.
That money would go toward building infrastructure, such as roads and sewer, power and water connections, to make the lots more attractive and less expensive to develop. According to a budget request to the governor, the department is not eligible to apply for grants or financing that could help pay for these projects. Instead, it must rely on state funds to help prepare its land.
“We keep running into the same thing where we don’t have enough of the infrastructure built out on DNR land parcels, and this makes it difficult to keep the cost low,” Franz said.
Template for future projects
The pilot project would start with a 7-acre plot at the corner of Meridian Avenue South and 228th Street Southwest in Bothell where a developer has already expressed interest.
The land is currently zoned for homes and neighborhood businesses, and could be used to build up to 50 affordable housing units in “an area that greatly needs new middle-income housing,” according to the request. The site could also include retail and a park.
Connecting the parcel to utilities and roads is seen as key to making that kind of development feasible.
The Bothell tract that the department is looking to build infrastructure on is near a larger piece of DNR-owned property that is forested and used for outdoor recreation by area residents. That 30-acre plot is zoned as forest land and locals want to keep it preserved that way, rather than rezoning it for development.
Concerns like this add another layer of complexity as DNR looks for new ways to use its land.
“All of these parcels are ones we know that are weird, and so each time something comes up, it’s going to be a unique situation,” Ocker said.
Franz said the department does not want to build on the larger Bothell plot and follows local zoning laws for all of its properties.
“We work to keep our working forest lands and our farmlands and our critical areas protected,” Franz said.
With a recent transaction in Kitsap County, where the state sold its land to the county, the community was mostly supportive, according to the department. That deal involves plans to build affordable housing. However, a potential sale of the same property to a private company in 2019 sparked pushback from residents.
If the Bothell pilot is successful, the department has identified seven other sites as targets for similar projects, including in Battleground, Fircrest, Lacey and Spokane. Combined, the parcels at these locations are more than 750 acres.
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