### Meeting Overview The Bellingham City Council met on October 20, 2025 for their regular meeting, focusing heavily on budget revenue projections and housing policy updates. The council held two public hearings - one on a proposed 1% property tax increase for 2026 and another on changes to accessory dwelling unit (ADU) regulations to comply with state housing laws. ### Key Terms and Concepts **Property Tax Levy:** The amount of property tax revenue that a local government is authorized to collect, set annually by the city council within state-imposed limits. **Accessory Dwelling Unit (ADU):** A secondary housing unit on a single-family residential lot, such as a converted garage or basement apartment, intended to increase housing options. **Owner Occupancy Requirement:** A rule that required property owners to live on-site when renting out ADUs, which the state now prohibits cities from enforcing. **Inverted Yield Curve:** An economic indicator where short-term bond interest rates exceed long-term rates, historically a predictor of recession. **General Fund:** The city's primary operating account that pays for basic services like police, fire, parks, and administration. **Middle Housing:** Housing types between single-family homes and large apartment buildings, including duplexes, triplexes, and fourplexes. **Condominiiumization:** The process of converting rental units into individually owned condominiums that can be sold separately. **Mitigation Bank:** A conservation program where the city can create wetland credits to sell to developers who need to offset environmental impacts. ### Key People at This Meeting | Name | Role / Affiliation | |---|---| | Hollie Huthman | Council President (Second Ward) | | Hannah Stone | Council Member (First Ward), Public Works Committee Chair | | Kim Lund | Mayor (participated remotely) | | Eric Johnson | Budget & Treasury Manager | | Blake Lyon | Planning & Community Development Director | | Chris Koch | City Planner | | Adam Bellinger | Resident, public speaker | | Brian Gas | Resident, real estate agent, public speaker | ### Background Context Bellingham is navigating significant budget pressures while implementing new state housing laws. The city faces a projected $10 million budget deficit by 2027, with emergency reserves nearly depleted by 2029. This financial strain comes as the city must comply with multiple state mandates requiring more housing density and fewer barriers to construction. The 1% property tax increase, while modest, is part of broader efforts to maintain city services amid economic uncertainty. Meanwhile, housing policy changes reflect Washington State's aggressive push to address the housing crisis by forcing local governments to allow more housing types and remove obstacles like parking requirements and owner-occupancy rules. ### What Happened — The Short Version The council held two public hearings but took no final action on either issue. Finance staff presented revenue projections showing continued economic uncertainty, with declining sales tax revenues and a weakening job market. A proposed 1% property tax increase would generate about $782,000 additional revenue and cost the average homeowner about $22 more annually. Planning staff then presented required changes to ADU rules, removing owner-occupancy requirements and allowing ADUs to be combined with middle housing. Both hearings drew criticism from residents concerned about rising taxes and inadequate parking. The ADU discussion was referred to committee for further review, while the property tax ordinance will return for a vote at the next meeting. ### What to Watch Next - November 3rd council meeting will include three major public hearings: parking requirements, the comprehensive plan, and the full 2026 budget - ADU ordinance discussion continues in committee before final council vote - Property tax levy ordinance must be passed by end of November to take effect in 2026 ---